Personal Guarantee on a Commercial Lease: Do You Have to Sign One in NYC?
On a first office lease in New York, you will usually be asked to sign a personal guarantee. Landlords ask a founder for one when the tenant is a young company with no operating history, and often do not when the tenant is established and its financials are strong. What you sign matters more than whether you sign. A full personal guarantee keeps you liable for the whole term. A good guy guarantee, the market norm here, ends your personal liability after a proper exit: notice given, the space emptied, keys back and rent settled to the day of departure. Extra security can sometimes replace a guarantee altogether.
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Send floors for 12 peopleUpdated 2026-10-03 · Nomad Group
What a founder personally risks: full guarantee against good guy
Under a full personal guarantee, your own assets stand behind every month left on the lease, even after the company has left the space. As an illustration, say the company takes 2,100 square feet, the planning figure for 12 people, on a five-year lease and closes in year two: three years of rent can follow you home.
Under a good guy guarantee the exposure is the rent for any months the company stays without paying, plus the notice period. Leave properly and it stops. One worst case is counted in years and the other in months, which is why the form is the first thing to negotiate.
Three routes around a full guarantee, in the order to try them
- Ask for the good guy form. It is the New York norm, so the request is ordinary. The work is in its details: a short notice period, and a scope held to rent.
- Limit what remains. A cap on the amount, a burn-off after a run of on-time payments, and one named signer, not every founder.
- Offer security in its place. A larger deposit or letter of credit gives the landlord something to draw on without pursuing a person. It ties up cash, so price it against the risk it removes.
None of these is owed to you. A landlord grants them when it wants the tenant and believes the credit, so make the request in the proposal, while other floors are still in play. Lease red flags shows what a padded guarantee looks like in a draft.
How a guarantor gets released later
The good guy form lets you out through a proper surrender: the notice the lease requires, the space vacated, the keys returned and rent paid to the day of departure. Keep a paper trail for each step and ask the landlord to confirm the release in writing.
A sublease changes nothing. The company is still the tenant, and the guarantee stays in force while a subtenant occupies the space. An assignment does not free the guarantor automatically either. The release has to be negotiated as part of the landlord's consent, once a creditworthy company has taken over. Any other release has to be bargained for, and the usual price is additional security. The early exit guide covers what the company itself still owes after each route.
The floors a first team of about 12 would be signing for
The size of the guarantee follows the size of the lease. The floors listed on this page are sized for roughly 12 people; the rentable area and asking rent appear beside each. Multiply a floor's monthly rent by the months of notice in the landlord's draft: that is the rent you would be guaranteeing between deciding to leave and being released. Office space for 10 people shows the next size down.
Floors that fit a team of 12
Live from our listings · 6 of the 7, smallest firstA team of 12 plans on about 2,100 square feet at 175 a person. 7 floors on our book sit in the range that fits, 2,100 to 3,780 square feet, asking $44 to $95 per square foot per year.
- Floors
- 7
- Sizes
- 2,500-3,750 sq ft
- Asking rent
- $44-$95 / sq ft
- 29 West 17th Street, Partial 7th Floor 2,500 sq ft $60/sq ft Union Square about 14 people
- 45 Broadway, Partial 12th Floor 2,624 sq ft $60/sq ft FiDi about 15 people
- 153 West 27th Street, Partial 11th Floor 2,937 sq ft $60/sq ft Chelsea about 17 people
- 153 W 27th Street, Partial 3rd Floor 2,978 sq ft $44/sq ft Chelsea about 17 people
- 115 West 30th Street, Partial 4th Floor 3,500 sq ft $55/sq ft Chelsea about 20 people
- 110 Greene Street, Partial 5th Floor 3,750 sq ft $95/sq ft SoHo about 21 people
The full guide
This page is the short answer. The long one, with the numbers worked through, is here:
Related topics
- Commercial Lease Guarantor: Who Signs an NYC Office Lease and What They Owe
- Option to Renew in an Office Lease: What the Clause Should Say Before You Sign
- Exercising a Lease Renewal Option in NYC: The Deadline and a Missed Date
- Right of First Refusal in an Office Lease, Compared With a Right of First Offer
Will a landlord lease to a startup with no guarantee at all?
Sometimes, and it turns on credit. A company with years of financials often signs without one. A young company can sometimes replace the guarantee with a larger letter of credit. No landlord is obliged to agree, so ask early and have the financial package ready.
What else can stand in for a personal guarantee?
Besides more security, a landlord may accept a guarantee from a parent or affiliated company in place of a person, rent paid in advance for a set number of months, or a shorter lease so that less is at stake. Each has a cost, usually cash that sits with the landlord, so weigh it against the personal risk it takes off you.
Does a good guy guarantee mean we can leave whenever we like?
No. It releases the person, not the company. After a clean exit the company still owes rent for the remaining term, and the landlord can pursue it. Good guy guarantee sets out the conditions.
Who reviews the guarantee before I sign?
Your lease attorney. The broker negotiates the business points, such as the notice period, the cap and what the deposit counts toward, and the attorney confirms that the wording does what was agreed. Nothing on this page is legal advice.
Talk to a broker
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