Security in Commercial Leases - Comparing Guarantees & Rent Deposits
Security for payment of rent by a tenant underpins not only the landlord’s return on its investment, but also the valuation of the asset.
Guarantees, whether from a parent company or a director and shareholder, have come to appear increasingly vulnerable in the light of legal developments over recent years. The benefit of a guarantee can be lost through successive assignments of the lease, or by variation of the lease. In addition, guarantees may be set aside for undue influence.
Insolvency procedures have been used to restructure lease commitments, and effectively relieve parent companies of the burden of guarantees at precisely the point where the landlord expected to be able to call on them.
This does not mean that guarantees are no longer required, but landlords will increasingly be interested in other available forms of security, principally rent deposits. But a rent deposit raises its own set of issues surrounding financial compliance requirements, effective registration, the impact of insolvency, and procedures upon assignment.
This live broadcast session will review the different types of available security.
What You Will Learn
This live and interactive session will cover the following:
- What measures can be put in place upon taking the benefit of a guarantee to limit the risk of losing it in future?
- How, and to what extent, can the benefit of a guarantee can be retained upon an assignment of the lease?
- How insolvency procedures can be used to attack guarantees and what to expect
- The differences between the various ways in which rent deposits can be structured and their practical implications
- The scope of the ability to require additional security upon an assignment of the lease
Recording of live sessions: Soon after the Learn Live session has taken place you will be able to go back and access the recording - should you wish to revisit the material discussed.