A personal guaranty is a separate contract from the lease it sits behind, and that is the whole problem. The business signs the lease. The owner signs the guaranty. When the business closes, the lease obligation does not close with it. Any commercial lease attorney San Antonio business owners consult will start in the same place, and it is not the rent number. It is the paragraph naming who pays when the tenant cannot.
Texas law treats that paragraph seriously. Under Business and Commerce Code Section 26.01, a promise to answer for the debt of another is unenforceable unless it is in writing and signed by the person to be charged. Subsection (b)(2) is the guaranty provision. Subsection (b)(5) covers the lease itself when the term runs longer than a year. The flip side of the rule is that a signed guaranty is enforceable on its own terms, and courts do not soften it because the business failed for reasons nobody controlled.
What a Commercial Lease Attorney in San Antonio Reads First
Texas courts look for three things. Material Partnerships, Inc. v. Ventura came out of the Houston Fourteenth Court of Appeals in 2003. An enforceable guaranty, the court said, shows the parties involved, a manifestation of intent to guaranty, and a description of the obligation guaranteed. That is a low bar. The document at issue said, in substance, that the signer personally guaranteed all outstandings and liabilities. The court enforced it and entered judgment for more than $960,000.
Short guaranties are not weak guaranties. One sentence at the end of a forty-page lease can satisfy all three elements.
Strict Construction Is Real, but Narrower Than People Think
McKnight v. Virginia Mirror Co. reached the Texas Supreme Court in 1971. A guarantor is entitled to have the agreement strictly construed, the court held, and it may not be extended by construction or implication beyond the precise terms of the contract. Guarantors cite this rule constantly.
It is not a tiebreaker for deciding what the words mean. Strict construction applies once the terms are ascertained. Where a guaranty plainly covers renewals and expansions, a court reads it that way. The rule earns its keep at the edges. A guaranty of an original five-year term does not automatically follow the tenant into a renegotiated ten-year deal the guarantor never saw.
Payment or Collection: The Distinction That Decides Who Gets Sued
A guaranty of payment obligates the signer to pay the debt when due if the tenant does not, and it requires no condition precedent. A guaranty of collection obligates the signer only if the debt cannot be collected from the tenant through reasonable diligence. Texas courts have drawn that line for decades. The default matters: absent language pointing the other way, a guaranty is read as a guaranty of payment.
One consequence surprises people. The landlord need not sue the business first. It does not have to wait out a bankruptcy, chase receivables, or prove that it tried. It can name the guarantor in the original petition.
Why an LLC Does Not Protect a Commercial Lease Guarantor in San Antonio
Business Organizations Code Section 21.223(a) shields owners from contractual obligations of the entity, including on an alter-ego theory and for failure to observe formalities. Subsection (b) opens that shield in one situation only. The obligee must show the person caused the entity to be used to perpetrate an actual fraud on that obligee, primarily for the person’s own direct personal benefit. Section 101.002 carries the same protection over to limited liability companies.
None of it reaches a guaranty. Veil-piercing is an argument about whether the law should disregard the entity. A guaranty avoids the argument, because the owner already agreed to be liable personally. That is exactly why landlords ask for one, and Arizona landlords use the same instrument, as our guide to the Arizona commercial lease personal guaranty describes.
What the Signature Reaches at Home
Texas marital-property rules do more work here than most guarantors expect. Under Family Code Section 3.202, one spouse’s separate property is not subject to the other spouse’s liabilities unless both are liable under some other rule of law. Subsection (b) shields community property under the non-signing spouse’s sole management. That shield covers the other spouse’s nontortious liabilities incurred during marriage. Subsection (c) exposes community property subject to the signing spouse’s sole or joint management.
A lease guaranty is a contractual obligation rather than a tort. So the signing spouse’s sole-management community property and the couple’s jointly managed community property are reachable, while the non-signing spouse’s separate property and sole-management community property generally are not. Section 3.203 then lets the judge decide, as is just and equitable, the order in which particular property is sold to satisfy a judgment.
The Landlord Still Has to Mitigate
Property Code Section 91.006(a) imposes a duty to mitigate damages when a tenant abandons the premises in violation of the lease. Subsection (b) makes any lease provision waiving that duty void. The Texas Supreme Court confirmed the commercial application in Austin Hill Country Realty, Inc. v. Palisades Plaza, Inc., decided in 1997.
Mitigation is a guarantor’s most useful argument. A commercial lease attorney San Antonio guarantors retain will press it early, because it goes to the size of the damages rather than to liability. No Texas statute caps guarantor exposure at fair market value. The fair-market-value offset in Property Code Section 51.003 applies to a deficiency left after a foreclosure sale under Section 51.002. A lease guaranty involves no such sale, so that offset has nothing to say about it.
What a Commercial Lease Attorney in San Antonio Checks in Chapter 93
Chapter 93 of the Property Code governs commercial tenancies. Section 93.002 bars interrupting utilities and removing doors or locks outside narrow exceptions. Subsection (f) requires a landlord who changes the locks of a rent-delinquent tenant to post written notice on the front door naming where a new key can be obtained. Subsection (g) gives an excluded tenant recovery of possession or termination of the lease. It adds actual damages, one month’s rent or $500 — whichever is greater — attorney’s fees, and court costs.
Then comes subsection (h). A lease supersedes this section to the extent of any conflict. Unlike the residential chapter, these commercial protections are waivable, and landlord-drafted leases routinely waive them. Section 93.012 supplies a separate check: a landlord may not assess a charge other than rent or physical damage unless the amount, or the method of computing it, appears in the lease. Section 54.021 gives a nonresidential landlord a preference lien on the tenant’s property in the building for rent due and rent coming due during the current twelve-month period.
Deadlines, and Where a San Antonio Commercial Lease Attorney Files
Suit on a guaranty is suit on a debt, and Civil Practice and Remedies Code Section 16.004(a)(3) sets four years from the day the claim accrues. Bexar County has fourteen civil district courts that hear these disputes. The Texas Business Court’s Fourth Division sits in San Antonio. Under Government Code Section 25A.004, its governance and internal-affairs jurisdiction starts at $5 million in controversy. A $10 million threshold applies to qualified transactions and certain contracts. Most lease disputes never approach either figure.
The Bottom Line
The guaranty is often the least negotiated page in the file and the one with the longest reach. Texas enforces it as written, does not make the landlord exhaust the business first, and supplies no statutory ceiling on what a guarantor owes. What is negotiable is the text. A cap stated in months, a burn-off after a stretch of on-time payments, a release on assignment, a limit to the original term — each of those gets written in before signing or not at all. Chapter 93 will not supply them later, and neither will a court.
Frequently asked questions
No. Absent language pointing the other way, Texas reads a guaranty as a guaranty of payment, which requires no condition precedent. The landlord may name the guarantor in the original petition.
No. Business Organizations Code Section 21.223 shields owners from the entity’s contractual obligations, but a guaranty is the owner’s own promise, so veil-piercing never enters the analysis.
Generally not. Family Code Section 3.202 keeps a non-signing spouse’s separate property and sole-management community property out of reach for the other spouse’s nontortious liabilities. The signing spouse’s sole-management and jointly managed community property remain exposed.
No. Section 93.002(h) provides that a lease supersedes the section to the extent of any conflict, so the commercial lockout and utility protections can be waived by the lease itself.
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This article is for general informational purposes only and does not constitute legal advice. Guaranty liability depends on the exact wording of the lease and the guaranty, and Chapter 93 protections can be modified by the lease itself. Anyone facing a commercial lease or guaranty dispute should consult a licensed Texas attorney.
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