Bankruptcy,
Real Estate/Development
Apr. 17, 2023
Minimizing risk of a tenant bankruptcy in lease negotiations
From a time and money perspective, a letter of credit or guaranty is preferable to a security deposit if a tenant files bankruptcy.
As we head into uncertain economic times, landlords should be thinking more intentionally about what lease security they seek from their tenants. Negotiating lease security can hedge a landlord's risk in the event their tenant files bankruptcy. This article discusses pros and cons of and best practices around negotiating letters of credit, parent guarantees or security deposits and the impact, if any, that a tenant bankruptcy has on each of these types of lease secu...
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