The “Good Guy Guaranty”

Understanding the ‘Good Guy Guaranty’ Case and Its Impact on Commercial Leasing (2023) Introduction The “Good Guy Guaranty” (GGG) has become a common clause in New York commercial leases, but a recent case in the New York Court of Appeals could reshape its interpretation. As businesses emerge from the pandemic, this case could have a wide-reaching impact on commercial real estate practices across the state. Case Overview In 2023, the New York Court of Appeals agreed to review a dispute over the interpretation of the Good Guy Guaranty. The case involves a tenant who vacated their leased space but continued to face liability under the GGG clause for unpaid rent. The landlord argued that the tenants remained liable for the rent, even after leaving the property. The Court’s review will clarify how far GGG clauses extend and whether landlords can enforce rental guarantees post-vacation. This decision will be crucial for small businesses and landlords alike, particularly in Manhattan, where these clauses are prevalent in commercial leases. Key Implications for Commercial Tenants • Potential for Extended Liability: If the Court sides with the landlord, tenants could be on the hook for rent long after they vacate a property. • Commercial Lease Negotiations: Businesses should carefully negotiate GGG clauses in their leases to limit potential liability.