August 2012: Landlords – Check Your Suretyships!

If your tenant is a corporate in financial distress and you find yourself calling up the director’s suretyship, you could be in for a nasty shock if the suretyship isn’t absolutely clear on exactly what the surety is liable for.

The reason – our law interprets all suretyships “strictly”, which means that they “may not be extended beyond what was expressed or was at least covered by the intention and sense of the words of the suretyship”.  Put another way, our courts will not likely hold a surety to be bound beyond the express wording of the suretyship, whether in regard to premises or the period of the lease.