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Provide security for performance of tenant’s covenants

Understanding how to provide security for performance of tenant’s covenants is essential for landlords and legal practitioners managing lease agreements. This guidance note covers critical forms of tenant security and key legal considerations that impact risk management in commercial leasing. It highlights practical implications to prepare for before commencement.

Topics Covered

  • When is security required?
  • Bank guarantees
  • Guarantees — personal and company
  • Security deposits

Essential Insights

  • Assess the strategic use of bank guarantees versus security deposits amid changing regulatory frameworks.
  • Consider critical legal nuances in enforceability and assignment of personal and company guarantees.
  • Understand the implications of expiry dates and notice provisions on bank guarantees for landlord security.
  • Evaluate jurisdictional differences affecting how security deposits must be held and administered.
  • Recognise practice tips that mitigate risks of fraud, loss, or invalid guarantees in lease security.

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