Mayor Bill de Blasio just signeda bill that is aimed atprotecting lease guarantors from personal liability after theirbusinesses were shut down because of the standing governmentalorders. With eviction proceeding shutdown until well into the summer, the legislation's goal isto make sure a landlord, since it can't bring an evictionproceeding right now, doesn't decide to sue an individual under theguaranty.
One attorney has identified a problem with the measure however:Namely that the bill references a "provision in a commercial leaseor other rental agreement." The hitch is this, attorney MaxwellBreed, a real estate and litigation partner at New York law firmWarshaw Burstein, tells GlobeSt.com: guaranties generally areseparate instruments and not "provisions" of leases, or otheragreements.
"Most of the time a guaranty is not a provision of a leaseagreement but rather an independent instrument," he says. "Thatraises a question in my mind as to whether this bill will evenaccomplish the goal set out in the bill."
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
