Whilst directors, members and the like are often hesitant to
sign suretyship agreements, in the case of commercial lease agreements, ticking
this box is even more important that in the case of residential lease agreements.
The reason for this is that the quantum when it comes to commercial lease
agreements is generally far higher than in the case of residential lease
agreements, thereby exposing the Landlord to significantly more risk. Should a
company be unable to pay its debts for any reason and liquidation proceedings
commence, then the Landlord stands to lose a significant amount of money. Given
the current economic climate, this actually tends to occur more often than one
would think. Where suretyship agreements are in place, the Landlord may then
immediately claim the full outstanding amount from the sureties in their
individual capacity or from a founding company or franchisor in the event that
a juristic entity signs as a surety. This issue is covered further in clause 47
of the Lease.