Benefits to the Landlord

·         Gives peace of mind as to ongoing rental payments.

·         Landlord does not have to make a judgment regarding financial substance of tenant.

·         Ensures that a failure of the tenant does not cause the Landlord to default on any financing obligations to its Lenders.

·         In the event of a tenant default, gives the Landlord time to find a replacement tenant without being under any mounting pressure of continuing unpaid rentals.

·         Enhances the capital value of the property of the Landlord.

Benefits to the Tenant.

·         In the event of long term leases being assigned, personal guarantees often stay in place with the assignment, with potentially high exposure. The indemnity given in respect of a Rental Guarantee Bond, limits such exposure to a ‘capped’ maximum.

·         In the event of future shareholder or partner changes, avoids any difficulties in obtaining releases from long term guarantees from the Landlord.

·        Enables the tenant to rent a property from a Landlord that might otherwise refuse to rent the property without a personal guarantee.