Early lease termination for LLC; is owner responsible?

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Early lease termination for LLC; is owner responsible?
I’m starting a new LLC and am reviewing the landlord’s lease agreement. It is a three year lease, and states that I am responsible for the monthly lease, even if the LLC goes out of business. Who can the landlord go after, only the LLC and its assests, or also the personal assets of the LLC founder/owner. The lease payments for these 3 years is over $100,000. Any ideas for negotiating a fair lease for my LLC and the landlord?

2 thoughts on “Early lease termination for LLC; is owner responsible?”

  1. Re: Early lease termination for LLC; is owner responsible?
    Mark Reiter’s advice is sound and right on the money. It does sound like you have a personal guarantee, and that would obligate you outside the LLC. Don’t feel like the loan ranger here, lots of corporations, even big ones, wind up giving personal guarantees on things like leases. It is common practice for companies that are not “big enough” for certain banks and other lenders.

    I would urge you to follow Mark’s advice and get a legal opinion before moving forward with the lease.

    Anthony DeWitt
    Bartimus, Frickleton Robertson & Gorny, PC
    715 Swifts Highway
    Jefferson City, MO 65109

  2. Re: Early lease termination for LLC; is owner responsible?
    The lease will determine who is liable. Based on your comments, it sounds like the lease contains a personal guarantee. If so, then you would probably be personally liable for any damages in the event the LLC is not be able to pay the rent.

    If you are concerned about protecting your personal assets as you consider taking on a $100,000 lease liability I would highly suggest you contact an attorney to assist and advise you. You, your business, and your family would be best served by spending the money for some sound legal advice now to address and avoid such problems in the future. Frankly, it doesn’t make sense to throw good money after bad if things turn south a couple years down the road.

    If I can be of assistance, feel free to call or email. Best of luck.

    Mark Reiter
    Law Office of Mark A. Reiter, LLC
    7422 N Manchester Avenue
    Kansas City, MO 64158

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