Lease Agreements

Generic Surety Bonds: Lease Agreements

General Overview
The surety bond is requested from the tenant (lessee) as a substitute guarantee for the security deposit concerning the obligations assumed upon the signing of the lease agreement. The guaranteed maximum amount is typically equivalent to three months' rent. However, the parties involved have the freedom to negotiate a different amount based on their preferences.

This type of surety bond is usually provided for lease agreements involving non-residential properties, ensuring the good preservation of the leased assets, while explicitly excluding the payment of rent.

Insurance Conditions
The guarantee is provided on a basis of "definitive loss", meaning that it covers the total amount owed in case of default by the tenant.
Prior to issuing the bond, it is required that the tenant subscribe to insurance policies covering risks such as fire and liability for the management of the premises.
Duration and Termination of Guarantee
The duration of the guarantee must align with the initial term of the lease agreement. This term varies according to the type of contract established between the parties (e.g., free rent contract, regulated rent contract, etc.).
If the lease contract is renewed, a new guarantee will need to be issued.

Key Points to Remember
Maximum Guarantee: Generally three months' rent, adjustable based on negotiation.
Type of Properties: Primarily for non-residential leases.
Exclusions: Does not cover unpaid rent.
Renewal: A new guarantee is required for renewed contracts.
This structure allows for flexibility and protection for landlords, ensuring compliance from tenants while maintaining the integrity of the leasing arrangement.