If I want to start an auto repair business and lease a building but the business fails, will I have to pay the remainder of the lease?
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If I want to start an auto repair business and lease a building but the business fails, will I have to pay the remainder of the lease?
Asked on February 28, 2015 under Real Estate Law, Rhode Island
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
Whomever signed the lease (or co-signed or guaranteed it) will be expected to pay the remainder of the lease: the failure of your business does not negate your contractual obligation to pay. If the business is an LLC or a corporation and you sign the lease for the LLC or corporation (e.g. as manager, etc.) and not in your own name, you would not be personally liable on the lease, unless you also signed a personal guaranty. In this case, if there was no personal guaranty, the landlord could only look to get the money from the business, not you personally.
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