How do you write a guarantee agreement?

To write a guarantee agreement, you need to detail all the responsibilities of the Guarantor, when the agreement begins, and when it can be terminated. Depending on the type of guarantee agreement you’re writing, you may want to include specifics regarding property, rent payments, or debt collection. To make things easier, you can use the PandaDoc Guarantee Agreement to get started.

What is a guarantee agreement?

A guarantee agreement is a deed signed by a third party, the Guarantor, to ensure an original agreement between a Lender and a Borrower remains in place. The Guarantor will be held responsible for fees and payments outlined in the agreement, should the Borrower cannot do so.

Why do you need a guarantee agreement?

You might need a guarantee agreement when renting a property or leasing a car. The agreement is signed by a Guarantor, who is usually a close relative or parent of the original Borrower. The agreement is in place to ensure that the Lender still receives their payments if the Borrower triggers a default event where they cannot pay themselves. Guarantee agreements can be ideal for those with bad credit to secure a property, car, or loan.

What is the purpose of a guarantee agreement?

The purpose of a guarantee agreement is to ensure the Lender never misses out on payment. It serves as an assurance if a Borrower misses a payment or breaches their agreement with the Lender. The Lender can still regain any fees or arrears they are owed through the guarantor.

What are the three types of guarantees?

There are three common types of guarantees used between a Lender and a third-party Guarantor. A Retrospective Guarantee is an agreement in which the Guarantor will become responsible for a debt that is already outstanding. A Prospective Guarantee is the most common guarantee and refers to future debts or transactions (for example, renting a property or leasing a car). Lastly, there’s a Specific Guarantee which is a simple agreement regarding a single debt transaction.

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Guarantee Agreement

Prepared for:

[Guarantor.FirstName][Guarantor.LastName]

[Guarantor.StreetAddress]

[Guarantor.City], [Guarantor.PostalCode]

Created by:

[Landlord.FirstName][Landlord.LastName] / [Landlord.Company]

[Landlord.StreetAddress]

[Landlord.City], [Landlord.PostalCode]

This guarantee agreement has been created on [Document.CreatedDate] between the following parties:

[Landlord.FirstName][Landlord.LastName] / [Landlord.Company]

[Landlord.StreetAddress]

[Landlord.City], [Landlord.PostalCode]

Hereby known as 'the Landlord' / 'the Lender'

[Tenant.FirstName][Tenant.LastName]

[Tenant.StreetAddress]

[Tenant.City], [Tenant.PostalCode]

Hereby known as 'the Tenant' / 'the Borrower,' and

[Guarantor.FirstName][Guarantor.LastName]

[Guarantor.StreetAddress]

[Guarantor.City], [Guarantor.PostalCode]

Hereby known as 'the Guarantor.'

1. The Guarantor will guarantee the Tenant/Borrower in line with the terms and conditions outlined in the Tenancy/Lease Agreement (see attached).

2. The Guarantor ensures the Tenant/Borrower remains compliant under the obligations of their Tenancy/Lease Agreement with the Landlord/Lender. This includes funding any compensation to be paid to the Landlord/Lender for loss, damage, or renting arrears should the Tenant/Borrower be in breach of their Agreement.

3. This agreement will continue to be in place during the initial Tenancy/Lease Agreement, as well as any renewals or extensions to the fixed term agreed between the Tenant/Borrower and Landlord/Lender.

4. Both the Guarantor and the Tenant/Borrower will be responsible for complying with the terms of conditions of the Tenancy/Lease Agreement. Should the Landlord/Lender seek compensation for loss or damages, this can be against either the Tenant/Borrower, Guarantor, or both parties together.

5. This deed between the Guarantor and the Landlord/Lender will not be cleared or waived for any reason and will remain in place during the whole period of the agreed Tenancy/Lease. The Guarantor will not be released from their liabilities unless the Landlord/Lender provides written notification.

6. This Guarantee Agreement is binding. It shall continue beyond the Guarantor's death or bankruptcy so long as the Tenancy/Lease Agreement is in place.

7. The Guarantor will remain liable for the property/vehicle and obligations stated in the Tenancy/Lease Agreement should the Tenant/Borrower surrender any part of the property/vehicle with written consent from the Landlord/Lender.

8. Should the Landlord/Lender incur any fees and expenses while enforcing this guarantee, the Guarantor will be liable for these costs, regardless of whether court proceedings take place.

9. For multiple Tenants/Borrowers, should one Tenant/Borrower surrender their interest in the property/vehicle, the Guarantee will remain in place as long as at least one Tenant/Borrower remains bound by their original Agreement.

Signed as a deed and delivered by or on behalf of the Landlord/Lender:

Signed as a deed and delivered by:

Signature

MM / DD / YYYY

Signature

MM / DD / YYYY

[Landlord.FirstName][Landlord.LastName]

[Guarantor.FirstName][Guarantor.LastName]

In the presence of:

Signature

MM / DD / YYYY

Signature

MM / DD / YYYY

[Witness.FirstName][Witness.LastName]

[Tenant.FirstName][Tenant.LastName]

Guarantee Agreement

Guarantee Agreement

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