[RPPTL Leasing Committee] Limited/Rolling PG

Thu May 23 09:16:17 PDT 2024

Hi Cary – I don’t typically use an entirely different form for such guaranty limitations.   Here is something I’ve plugged in to modify the overall guarantor obligations on a rolling basis:

“Notwithstanding anything contained in this Guaranty to the contrary, and notwithstanding the unconditional nature of this Guaranty and the absence of limiting language on Guarantor's obligations elsewhere herein, Guarantor’s total obligation to Landlord pursuant to this Guaranty shall not exceed an amount equal to Tenant’s Rent obligations accruing for the one (1) year period commencing on the date of Tenant’s default and ending on the date of the first anniversary of Tenant’s default, provided that any election by Landlord to accelerate the rent owed under the Lease shall not be deemed an accrual of such Rent during the one year period in question for purposes of calculating such cap.”

This captures any rent escalators a year out but could also just be framed as an equation (12 x the monthly rent in effect at the time of default) so that it isn’t tied to a period in the future, i.e. just a basic calculated cap regardless of when the rent will be or was owed.

If you are representing the landlord, consider also still allowing for any guarantor pursuit/litigation expenses on top of the cap.

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GREGORY R. HANEY
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From: landten-bounces at lists.flabarrpptl.org <landten-bounces at lists.flabarrpptl.org> On Behalf Of csabol sabollaw.com
Sent: Thursday, May 23, 2024 11:54 AM
To: 'landten at lists.flabarrpptl.org' <landten at lists.flabarrpptl.org>; 'Landtencl' <landtencl at lists.flabarrpptl.org>
Subject: [RPPTL Leasing Committee] Limited/Rolling PG

[.]
Hi All,

I'm working on a PG for a Commercial Lease.  I have a standard form, but it's a full guaranty and they want it rolling for just 1 year.  Any chance anyone has any language or a form you could help me out with?

Cary Sabol
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From: landten-bounces at lists.flabarrpptl.org<mailto:landten-bounces at lists.flabarrpptl.org> <landten-bounces at lists.flabarrpptl.org<mailto:landten-bounces at lists.flabarrpptl.org>> on behalf of RPPTL Real Estate Leasing Committee <landten at lists.flabarrpptl.org<mailto:landten at lists.flabarrpptl.org>>
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Subject: Re: [RPPTL Leasing Committee] Windstorm Lease Issue

Les, is this a multi or single tenant building scenario?

If multi-tenant, I assume the Landlord is insuring the building and there really isn’t much direct risk for the Landlord if the Tenant doesn’t have windstorm coverage on its FF&E.  if the Tenant is credit worthy why not let them self-insure?  I could send you some self-insurance clauses.  Frankly, I think the Landlord could make a business decision to waive the coverage without requiring self-insurance.

If this is a single tenant property, why not have the landlord insure the building including obtaining the windstorm coverage?  Tenant will reimburse the Landlord for the cost of the insurance as additional rent.  Frankly, this is the way insurance should be handled for a single tenant building.

Arthur J. Menor
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From: landten-bounces at lists.flabarrpptl.org<mailto:landten-bounces at lists.flabarrpptl.org> <landten-bounces at lists.flabarrpptl.org<mailto:landten-bounces at lists.flabarrpptl.org>> On Behalf Of RPPTL Real Estate Leasing Committee
Sent: Thursday, September 21, 2023 8:40 AM
To: 'Landtencl' <landtencl at lists.flabarrpptl.org<mailto:landtencl at lists.flabarrpptl.org>>; 'Landten' <landten at lists.flabarrpptl.org<mailto:landten at lists.flabarrpptl.org>>
Subject: [RPPTL Leasing Committee] Windstorm Lease Issue

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As there are 2 listservs, and I think my first posting went to the residential as opposed to the commercial, I am re-posting the below question.

Need some creative input.

Have a commercial Landlord whose leases require windstorm insurance.

Tenant (multiple locations with Landlord) is trying to self-insure for windstorm due to the high premiums; however, the Leases do not provide the Tenant the right to self-insure. The Leases state that if Tenant fails to obtain insurance, Landlord has the right to place the insurance and charge back Tenant, or declare a default.

The Landlord and Tenant have had a long relationship and wanted to get creative in alternative ways to meeting the insurance requirement (i.e. Standby Letter of Credit); however, I wanted to know if anyone else is running into this issue and what ways they see of solving.

As a side fact, the Guarantor of the Lease is financially significant (if that provides an alternative). Each of the LLC Tenants are separate and distinct entities under the umbrella of the Guarantor.

Thanx for any input.

Les H. Stevens, Esquire

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