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The Lease Guaranty Agreement is a critical risk management tool in Indian real estate transactions, commonly used when a landlord requires additional security beyond the tenant's own covenant. This document becomes particularly relevant when dealing with new businesses, students, or tenants with limited credit history. The agreement, governed by Indian contract and property laws, establishes a three-way relationship between the landlord, tenant, and guarantor. A well-drafted Lease Guaranty Agreement should clearly define the guaranteed obligations, duration of the guarantee, conditions for enforcement, and the extent of the guarantor's liability. It serves as a crucial document in both commercial and residential leasing, providing landlords with additional security while enabling tenants to secure properties they might otherwise be unable to lease. The agreement must comply with the Indian Contract Act, 1872, Transfer of Property Act, 1882, and relevant state-specific regulations.

1. Parties: Identifies and provides full details of all parties: the Landlord (beneficiary of the guarantee), the Tenant (principal debtor), and the Guarantor

2. Background: Recitals explaining the context of the lease agreement and the requirement for a guarantee

3. Definitions: Defines key terms used throughout the agreement, including 'Guaranteed Obligations', 'Lease Agreement', 'Property', etc.

4. Guarantee and Indemnity: Core section establishing the guarantee, its scope, and the guarantor's commitment to indemnify the landlord

5. Extent of Guarantee: Details the specific obligations covered by the guarantee, including rent, service charges, damages, and other tenant obligations

6. Duration of Guarantee: Specifies how long the guarantee remains in effect and any conditions for termination

7. Guarantor's Obligations: Comprehensive list of the guarantor's responsibilities and commitments

8. Preservation of Guarantee: Circumstances under which the guarantee remains valid despite changes to the lease or parties

9. Landlord's Rights and Remedies: Details the landlord's rights to enforce the guarantee and available remedies

10. Payment Provisions: Specifics about when and how payments must be made under the guarantee

11. Representations and Warranties: Guarantor's confirmations about their capacity and authority to provide the guarantee

12. Notices: Requirements for how formal communications between parties should be made

13. Governing Law and Jurisdiction: Specifies Indian law as governing law and establishes jurisdiction for disputes