When a landlord leases to a U.S. company affiliated with a foreign company, whether a parent company or sister company, the landlord's being able to collect on a lease guaranty from the foreign company can be tricky. Before deciding about the guaranty, consider:
- Obtaining detailed financial and corporate information on the guarantor
- Determining who at the foreign company is authorized to execute the guaranty and have the signature authenticated from the guarantor's foreign country
- Whether the guarantor has any assets in the U.S.
- If the foreign company's principal(s) will also guaranty the lease
- Requiring the guarantor submit to the landlord's venue, U.S. laws and jurisdiction
- How notice and service of a lawsuit will occur upon any default
- How the landlord will collect the judgment, including whether the judgment will be recognized in the guarantor's foreign jurisdiction
- Requiring the guarantor provide collateral here in the U.S. (e.g. letter of credit)
Above all else, keep forefront in the documentation of the guaranty how to enforce the landlord's rights.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
