Independent Legal Advice for a Commercial Lease Personal Guarantee

What is a commercial lease personal guarantee?

When a business takes on a commercial lease (a shop, office, unit or restaurant), the landlord often wants extra security in case the company stops paying. A personal guarantee is the usual answer: one or more directors or owners promise, as individuals, to cover the rent and the tenant's other obligations if the company cannot. It sits alongside the lease, so the company is the tenant but you personally stand behind it. Some guarantees are capped at a few months' rent or backed by a rent deposit; many are open-ended and run for the life of the lease.

Why does the landlord require independent legal advice?

A lease guarantee can be a long and expensive commitment, and you usually get no personal benefit from it, since the lease belongs to the company. Because of that, the landlord's solicitors often require you to take independent legal advice (ILA) first, from an adviser who is not acting for the landlord or the company. This protects you, by making sure you understand the commitment, and it protects the landlord, because a signed certificate makes the guarantee much harder to challenge later. Our certificates are prepared to satisfy standard requirements, and if the landlord's solicitor has its own form we complete that instead. Just email info@ilahub.com.

The main risks, in plain English

Your adviser will go through your specific guarantee in the appointment, but the recurring themes are:

• Rent is only the start. A guarantee usually covers service charge, insurance, business rates, repairs and dilapidations (the cost of putting the property back into condition at the end), not just the headline rent.
• It can run for the whole term. Unless the guarantee is capped or time-limited, you may be on the hook for the full length of the lease, often several years.
• Assigning the lease may not release you. If the company passes the lease to someone else, landlords frequently require an Authorised Guarantee Agreement (AGA), so you keep guaranteeing the next tenant.
• Your personal assets are exposed. If the company fails, the landlord can pursue you personally for arrears and costs, including your savings and potentially your home.
• Break clauses have conditions. A break option often only works if the rent is fully paid and other conditions are met, so it may not let you exit as easily as it appears.

Who typically needs this advice?

Most often it is the director or directors of a limited company taking new business premises, but it also applies to partners, majority shareholders and anyone else the landlord asks to stand behind the lease. Where more than one person is guaranteeing, each needs their own advice and their own certificate, and our fixed fee is per person. If your guarantee relates to business borrowing rather than a lease, see our main personal guarantee page instead.

How ILA Hub's process works

Everything is done remotely, UK-wide, with nothing to print or post. You book online, verify your ID beforehand and upload the lease and guarantee, then meet a legal adviser by secure video call, Monday to Friday, 9am to 7pm. The adviser explains the guarantee in plain English, answers your questions and confirms you understand it. Your signed certificate is emailed the same working day as your appointment. Fees are fixed per person: Standard £150 (appointment within 2–3 working days), Fast Track £250 (from the next working day) or Priority Same-Day £350 (earliest available, including same day). See our pricing for details, then book your appointment.