Say you’re opening a restaurant in Coral Springs. The landlord hands you a five-year lease for your LLC to sign, plus a two-page personal guaranty. Your attorney tells you that guaranty makes you personally liable for roughly $300,000 in rent over the life of the lease, plus operating expenses, plus attorney’s fees if things go south. You close the restaurant after 18 months. The LLC has no assets. The landlord sues you personally for the remaining 42 months of rent.
That’s how personal guaranties work in Florida. The LLC shield does nothing. The guaranty is a separate contract that creates direct personal liability. Most tenants sign these forms as boilerplate and only discover the exposure when they’re already in default.
Florida law gives commercial tenants almost no statutory protection. Courts enforce lease and guaranty language as written. The best time to limit your exposure is before you sign. Once the guaranty is executed, your options narrow fast.
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What a Personal Guaranty Actually Does
A personal guaranty is a contractual promise by an individual to satisfy the tenant’s obligations if the business can’t pay. In a commercial lease, that usually means you’re on the hook for base rent, CAM charges, taxes, insurance, repairs after default, and attorney’s fees.
The guaranty is separate from the lease itself. That matters because dissolving your LLC, selling the business, or even filing bankruptcy for the tenant entity does not automatically terminate your personal obligation. Florida Statute § 725.01 requires both the lease (if longer than one year) and the guaranty to be in writing and signed. Courts won’t let you out of a signed guaranty just because you didn’t understand what you were signing.
Florida’s LLC statute, § 605.0304, gives members limited liability for business debts. A personal guaranty bypasses that protection entirely. You don’t need to pierce the corporate veil when the guarantor already agreed to be personally liable. The only realistic protection is limiting what you guarantee up front and structuring your personal assets to take advantage of Florida’s exemptions.
What You’re Liable For Under a Typical Florida Guaranty
Most commercial lease guaranties in South Florida cover everything: base rent for the full remaining term, additional rent that includes common area maintenance, property taxes, insurance, and utilities, default damages that can include accelerated rent, costs to re-let the space including repairs, marketing, and broker commissions, and attorney’s fees and court costs if the lease contains a fee-shifting provision, which almost all of them do.
Here’s what catches tenants off guard: closing your business does not close that exposure. The landlord doesn’t have to sue the LLC first, exhaust remedies, or give you extra chances. Unless the guaranty itself says otherwise, the landlord can sue you directly and simultaneously with the tenant entity. A judgment against you allows the landlord to pursue non-exempt personal assets—bank accounts, investment properties, vehicles, and brokerage accounts.
The guaranty usually survives lease amendments, renewals, and assignments unless you negotiate an express written release. Say you sell your business two years into a five-year lease. The buyer takes over the lease. You assume you’re off the hook. You’re not. Florida law does not automatically release the original tenant or its guarantor when a lease is assigned. You need a written release from the landlord, and landlords rarely give those without something in return.
Florida’s Asset Protection Rules and What Landlords Can Actually Take
Florida is harsh on guarantors but generous on exempt assets. That creates a planning opportunity if you understand what’s protected.
Your homestead is protected under Article X, Section 4 of the Florida Constitution. A landlord with a personal guaranty judgment cannot force the sale of your primary residence, subject to acreage limits. That protection is nearly absolute for most judgment creditors.
Qualified retirement accounts are exempt under Florida Statute § 222.21. IRAs, 401(k)s, and pension plans are protected. Life insurance cash value and annuities are protected under § 222.14. If you’re head of household, your wages are largely protected from garnishment under § 222.11.
If you’re married, assets held as tenants by the entirety are generally immune from a creditor of only one spouse. That means jointly titled bank accounts, investment accounts, and real property held by the entirety can’t be reached by a judgment against you alone.
What landlords can reach: bank accounts in your name only, non-homestead real estate such as second homes, investment properties, and vacant land, non-exempt vehicles and personal property, and interests in entities and non-exempt investments.
The takeaway is this: if you structure your assets properly before trouble starts, a personal guaranty judgment might not reach much. But you can’t do that restructuring after the lawsuit is filed. Florida’s fraudulent transfer laws, particularly the Uniform Fraudulent Transfer Act codified in Florida Statutes Chapter 726, allow creditors to unwind transfers made with intent to hinder collection. Courts look closely at asset transfers made right before or during litigation.
Good Guy Guaranties and Other Limited Forms
Not all guaranties are unlimited. You can negotiate limits. Many tenants don’t try because they assume the landlord’s form is non-negotiable. It usually isn’t.
An unlimited guaranty obligates you for the full amount owed—rent, fees, costs, and interest—until the lease ends or is fully paid. That’s the default form most Florida landlords push.
A limited guaranty caps your exposure. You can negotiate a dollar cap, such as 12 months of rent instead of the entire remaining term. You can negotiate a time cap, where your liability only covers defaults in the first two or three years of the lease. After that, the guaranty burns off. In Estate of Basile v. Famest, Inc., a Florida appellate court enforced a guaranty that was expressly limited to defaults occurring during the first two years of the original lease or the first three years of an approved sublease. Courts enforce clearly drafted time limits.
A good guy guaranty is a limited guaranty that caps your personal liability at the date you properly surrender the space, provided you give the required advance written notice, stay current on rent through the surrender date, and return the space vacant and broom-clean. It does not terminate the lease or release the tenant entity. The LLC remains liable for rent over the balance of the term. But your personal exposure ends at surrender.
For small retail and restaurant tenants in Broward County, negotiating a good guy guaranty can be the difference between losing the business and losing everything you own. Say your restaurant fails 18 months into a five-year lease. With a standard guaranty, you’re personally liable for 42 months of rent. With a good guy guaranty, you give notice, stay current through your last day, and walk away with capped personal exposure. The landlord still has a claim against the LLC and can pursue a new tenant or mitigation damages, but you’re out.
How to Limit Exposure Before You Sign
The negotiation phase is where exposure is limited. Litigation is where poorly drafted guaranties become expensive.
Start by refusing the guaranty. Try first for no personal guaranty, especially if the tenant is well-capitalized, has strong financials, or you’re leasing in a multi-tenant professional building where landlords compete for tenants. Many tenants never ask. They assume the guaranty is required. It’s not always.
If the landlord insists on a guaranty, negotiate a good guy guaranty instead of full-term liability. If the landlord won’t accept a good guy, negotiate time limitations—guaranty only covers the first two or three years. Negotiate dollar caps—limit the guaranty to a fixed amount, not accelerated rent for the entire term. Narrow the guaranty to rent only, excluding CAM, build-out costs, and other contingent liabilities.
Build in burn-off provisions. A burn-off clause releases you after a set period of on-time payments or after the tenant’s financial metrics reach a threshold. Make sure the guaranty states the exact date or conditions for release and that it does not automatically extend to renewals or expansions unless you consent in writing.
Limit extensions and modifications. Many guaranties state they automatically cover lease extensions, renewals, amendments, and expansions. Negotiate language that the guaranty does not apply to any renewal term unless you consent again in writing, or that it does not apply to rent increases beyond a specified cap. Require the landlord to negotiate a new guaranty if lease terms materially change.
Protect assignment and sale scenarios. Make the landlord’s release of the guarantor a condition of any approved sale or assignment. Include a clause providing for automatic release of the guarantor after assignment and a defined period of the new tenant’s performance—say, 12 months of on-time payments. Default rules in Florida do not release you when the lease is assigned. You have to negotiate that release up front or you’ll be chasing the landlord for a release letter later, and landlords have no incentive to cooperate once you’ve already sold.
If multiple principals are guaranteeing, avoid joint and several liability. Drafting often makes multiple guarantors jointly and severally liable, meaning the landlord can collect 100% from any one guarantor. Negotiate several liability capped per guarantor—each guarantees a defined percentage or a fixed amount.
Clarify default triggers and notice requirements. Narrow what constitutes default for guaranty purposes. Guarantee only monetary defaults, not technical or minor non-monetary breaches like signage violations or hours-of-operation issues. Include a requirement that the landlord give written notice and an opportunity to cure before invoking the guaranty.
What If You Already Signed
Your options are more limited after execution, but they still exist.
Landlords sometimes agree to release a guarantor in exchange for additional security deposit, a letter of credit, a replacement guarantor, for example the buyer of your business, or demonstrated financial strength after years of perfect payment history. The release must be in writing. Absent a written release, the guaranty remains enforceable even if the landlord verbally told you not to worry about it.
If you have a good guy clause, use it properly. Satisfy its conditions exactly. Provide timely written notice as specified in the guaranty. Stay current on rent and all charges up to the surrender date. Deliver the premises vacant and broom-clean. Doing so cuts off your personal liability as of the surrender date. Miss any one of those requirements and the landlord will argue the good guy clause doesn’t apply.
If you don’t have a good guy guaranty and the business is failing, negotiate a lease termination agreement with the landlord that includes a release of the guarantor and a negotiated lump-sum settlement. Landlords often prefer a known settlement over the uncertainty and cost of litigation and re-leasing. You might pay three or six months of rent to walk away clean. That’s better than 42 months of personal liability.
Avoid informal abandonment. Florida law is strict. Holding over after written demand can trigger double rent for nonresidential tenancies. Simply closing your business and leaving without a formal agreement leads to acceleration and large personal judgments. Courts in Broward Circuit Court enforce written guaranty terms and award accelerated rent, late fees, and attorney’s fees routinely. Informal working it out with the landlord rarely works out.
Bankruptcy Does Not Erase Guaranty Liability
Filing bankruptcy for the tenant entity stays collection against the entity but does not automatically stay or discharge your separate obligation as guarantor. The landlord can continue to pursue you personally unless you also file bankruptcy or the bankruptcy court enters an injunction affecting third-party collection.
If you file personal bankruptcy, the guaranty may be discharged subject to federal bankruptcy rules. Landlords can object or negotiate reaffirmation. Bankruptcy is not a magic eraser. It has serious long-term consequences for your credit and asset protection planning. The better approach is limiting the guaranty and protecting exempt assets before trouble starts.
Whether you are buying a home, dealing with a landlord dispute, or recovering from an injury, Eric Goldman can help. Serving clients throughout Florida.
Why Fort Lauderdale Tenants Should Get Counsel Early
Florida law treats nonresidential tenancies differently than residential, with far fewer statutory protections for commercial tenants. Courts generally enforce commercial lease and guaranty language as written, especially where parties are sophisticated or represented. Combined with Florida’s enforcement of written anti-assignment and anti-waiver clauses, you should not expect courts to fix poorly negotiated guaranties.
Small retail and restaurant tenants on long-term center leases in Broward County routinely face this situation. The business fails in the first few years. The guarantor faces years of rent exposure because no burn-off was negotiated. Landlords sue guarantors directly in Broward Circuit Court seeking accelerated rent and attorney’s fees. Local courts enforce those terms.
The best time to address this is before you sign. Have a Fort Lauderdale real estate attorney review the lease and guaranty. Negotiate limits. Structure your personal assets to maximize Florida exemptions. Once you’re in default, your leverage disappears.
If you’re already in trouble on a commercial lease guaranty, don’t wait. Landlords move quickly. Once a judgment is entered, they can garnish accounts and place liens on non-exempt property. Early negotiation—whether for a release, a settlement, or a proper good guy exit—almost always produces better results than waiting for the lawsuit.
