Special legal and financial factors should be considered for healthcare lease guaranties

A lease is only as strong as the guarantor's financial condition

September 15, 2015

Special legal and financial factors should be considered for healthcare lease guaranties because a lease is only as strong as the guarantor’s financial condition, according to an article on the FacilitiesNet website.

The issue of the guaranty is usually dependent on the perceived financial strength of the tenant, whether there is other security and the trust between the landlord and tenant. 

With a healthcare lease additional care must be taken to confirm compliance with applicable laws and regulations and consistent with the general market and fair market value.

The U.S. Department of Health and Human Services defines “fair market value” as the value in an arm’s length transaction, consistent with the general market value, including charging physician tenants for all of the space that they use, including their portion of all common areas, the article said. 

Read the article.


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