The Guarantor On Lease Agreement is a crucial document in Philippine real estate transactions where additional security is required beyond the tenant's own covenant. This document is commonly used when a tenant's financial standing alone does not meet the landlord's requirements, or in high-value commercial leases where extra security is standard practice. The agreement must comply with Philippine civil law requirements, particularly the provisions of the Civil Code relating to guarantees and lease contracts. It typically includes detailed provisions about the scope of guaranteed obligations, enforcement mechanisms, and the guarantor's liability limits. This document is essential in situations involving new businesses, foreign companies entering the Philippine market, or when dealing with high-value lease commitments where landlords seek additional financial security.
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1. Parties: Identifies and provides full details of the Landlord, Tenant, and Guarantor
2. Background: Explains the context of the guarantee, referring to the main lease agreement and the reason for requiring a guarantor
3. Definitions: Defines key terms used throughout the agreement, including references to the main lease agreement
4. Scope of Guarantee: Clearly defines what obligations of the tenant are being guaranteed and the extent of the guarantor's liability
5. Guarantor's Obligations: Details the specific obligations the guarantor is undertaking, including payment obligations and performance guarantees
6. Duration of Guarantee: Specifies how long the guarantee will remain in effect and any conditions for termination
7. Enforcement: Explains when and how the landlord can enforce the guarantee against the guarantor
8. Guarantor's Representations and Warranties: Statements about the guarantor's capacity and authority to enter into the agreement
9. Landlord's Rights and Remedies: Outlines the specific rights of the landlord in case of default or breach
10. Notices: Specifies how formal communications between parties should be made and delivered
11. Governing Law and Jurisdiction: Confirms Philippine law as governing law and specifies jurisdiction for disputes
12. Execution: Signature blocks and execution formalities
1. Guarantee Limit: Include when there is a cap on the guarantor's liability
2. Multiple Guarantors: Include when there is more than one guarantor to specify joint and several liability
3. Security: Include when the guarantor is providing additional security such as a deposit or charge over assets
4. Assignment and Transfer: Include when either party may need to transfer their rights under the guarantee
5. Step-In Rights: Include when the guarantor has the right to take over the lease in case of tenant default
6. Guarantor Financial Reporting: Include when regular financial updates from the guarantor are required
1. Schedule 1 - Main Lease Agreement: Copy or summary of the main lease agreement being guaranteed
2. Schedule 2 - Guaranteed Obligations: Detailed list of the specific obligations being guaranteed
3. Schedule 3 - Guarantor Information: Detailed information about the guarantor including financial status and contact details
4. Schedule 4 - Form of Demand: Template for making formal demands under the guarantee
5. Appendix A - Required Notices Format: Templates for various notices required under the agreement
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