NSW Commercial Lease - Too Late to Get Personal Guarantee from Director?

[Bob]

If you have a corporate tenant defaulting on a commercial lease which was entered into several years ago, is it too late to get a personal guarantee from the directors or other person to guarantee and/or indemnify the current rental arrears? Or would the guarantee need to be signed contemporaneously with the lease agreement to cover those rental obligations before the debt was incurred?

 

[Rod]

The directors/other person will not have any legal obligation to sign a guarantee. They already have a contract in place and do not need to modify it or sign additional agreements unless it suits them.

The directors will have responsibilities as company directors that may come into play if their company defaults on a contract/lease. They may wish to avoid being placed into liquidation.

 

[Bob]

As I understand it, the lease is with the company, so the directors do not have personal obligations to pay the debts of the company. Anyway, it's someone else that I want to get a guarantee from, not necessarily the directors, so is it too late to obtain a deed of guarantee and indemnity?

 

[Rod]

Probably is too late. Unless representations were made at the time of entering into the lease it is unlikely this party has any obligations. If this was the case, the fact that you have not bothered to follow up until default weakens your case but not necessarily fatally.

Was anything discussed and agreed to at the time of entering the lease? If yes, is it in writing?

Is there any advantage to this third party in giving a guarantee now? Is there anything you can provide in return for the guarantee?

I'm struggling to see why a third party would now sign a guarantee with no obligation to do so.