TenantLandlordMain
Fall 2025 Issue

The Legal Implications of a Continuing Lease Guaranty

By: Noble F. Allen

Jurisdictions differ in how they interpret enforceability of this provision.

A guaranty secures the faithful and timely performance of a tenant’s obligations under a lease and ensures that the landlord can legally pursue the guarantor in the event of a tenant’s default.

A lease guaranty can come in a variety of forms: unconditional; limited or restricted; and “good guy”/“good gal” guaranties. Furthermore, a guaranty can also be deemed a “continuing guaranty,” which essentially means the guarantor’s obligation to the landlord is intended to cover future transactions such as lease renewals and extensions. This article will primarily focus on the legal effect of continuing guaranties.

Regarding a continuing guaranty, what happens when the landlord and tenant decide to make subsequent changes to the lease without the guarantor’s consent or input? Would the original guaranty still be deemed valid or invalid? Does a continuing guaranty need to include specific language stating that the guarantor must agree to waive any notice regarding future extensions or amendments to the lease for the guarantor to be held liable when the tenant breaches the lease?

The answers to these questions vary slightly based on the jurisdiction in which the dispute will be resolved or litigated. In some jurisdictions, even if the guaranty contains a continuing guaranty provision — which is often unlimited in time and does not require notice to or consent of the guarantor — a landlord may still be left unprotected. In other jurisdictions, a landlord may or may not be able to hold the guarantor liable if the lease was later amended without some sort of endorsement or consent from the guarantor. In a few jurisdictions, a material change to the underlying lease will vitiate any of the guarantor’s future liability.

Variations in Enforceability

The following offers a sampling of how courts in various jurisdictions might address these issues:

In Rhode Island, so long as the language is clear and unambiguous, the provisions of a continuing guaranty will be held valid and enforceable, particularly when it contains an express provision waiving the guarantor’s right to receive notice of any changes to the underlying lease.

Similarly, in Massachusetts, courts will enforce the provisions of a continuing guaranty when the express terms waive the guarantor’s right to notice of and assent to subsequent changes or modifications to the lease.

New Hampshire does not have a substantial amount of case law on the specific issue of continuing guaranties. However, under state law, a guaranty will be governed by contract law and the extent of the guarantor’s liability will be directly tied to the specific terms of the guaranty. If a fair reading of the guaranty, “taken as a whole,” is clear and explicit and demonstrates the guarantor’s intent to assume the tenant’s debt upon default, then a continuing guaranty will be fully enforceable.

In Connecticut, courts will evaluate the enforceability of a continuing guaranty based on the intentions of the contracting parties. Even when a continuing guaranty is intended to be unlimited in time or contains a notice waiver, Connecticut courts will generally limit a guarantor’s liability to a period that is reasonable considering the circumstances of that case. However, if multiple renewals of a lease were expressly anticipated and acknowledged by the guarantor at the time the guaranty was executed, the guarantor’s liability will be fully enforceable.

In New York, a guaranty is construed in the strictest manner and the guarantor will be held to the express provisions of that guaranty. A guarantor’s obligations will not be extended beyond the express terms of the guaranty, and the guarantor will most likely be released from liability if the underlying lease is modified in any manner without the guarantor’s prior consent. Conversely, a continuing guaranty containing a guarantor’s waiver of notice regarding future lease modifications will be subject to the same strict standard and enforced by New York courts.

In Illinois, a continuing guaranty that does not contain a specific time frame will not extend the guarantor’s liability beyond a “reasonable” time under the circumstances of that case. Furthermore, notwithstanding a waiver of notice provision, if the court deems the modification to the underlying lease to be a “material” or “essential” change, such that the guarantor is exposed to an increased risk that it did not originally anticipate, then the guarantor might be able to establish sufficient grounds to be released from liability.

Under Florida law, a continuing guaranty is enforceable if it expressly states the guarantor will be liable for future extensions and renewals. Florida also recognizes the rule that a continuing guaranty remains in effect until revoked by the guarantor.

Takeaways for Landlords and Guarantors

Given this divergence in how certain jurisdictions interpret the enforceability of a continuing guaranty, there are two main takeaways:

  1. Whenever possible or feasible, the landlord should have the guarantor sign a reaffirmation of the guaranty anytime a material change is made to the underlying lease. This is a full-proof mechanism to ensure that the guaranty will be fully enforceable, no matter the jurisdiction.
  2. In drafting the guaranty, the expectations of both the landlord and the guarantor must be unambiguous and crystal clear regarding the waiver of notice and the scope and duration of the guarantor’s future liability. Specifically, the guaranty should contain clear, specific language concerning whether the guarantor must be notified (or not) of any future changes to the underlying lease terms. In addition, it should contain clear language regarding the scope and duration of the guarantor’s liability (e.g., whether it is limited to the term of the underlying lease, or any expectation that it will include future modifications, extensions or renewals). 

Noble F. Allen is a partner in the real estate group of Hinckley Allen, where he practices in the area of litigation, including commercial landlord/tenant law.

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