Security Deposit & Guaranty When Assuming a Lease
Taking over a lease can mean the landlord wants a fresh deposit and your personal guaranty — and the old deposit may not simply transfer.
Last reviewed: May 26, 2026 by the BizLeaseCheck Editorial Team
General information, not legal advice.
Overview
The security deposit and any guaranty are easy to overlook when assuming a lease, but they affect both your upfront cost and your personal exposure. The landlord often uses the consent process to reset both.
Confirm exactly what deposit the landlord holds, whether it transfers, and what new security the landlord will demand.
Topics to check
Confirm in the estoppel how much deposit the landlord actually holds — it can differ from the lease (drawn down after a default, or never fully funded). On an assignment, the deposit does not automatically become yours; the parties must agree whether the seller’s deposit is credited to you (with you reimbursing the seller) or returned to the seller while you post a new one.
Pin down the deposit amount, who funds it at closing, and that the landlord acknowledges it.
Landlord-tenant law (Cornell LII Wex)Landlords frequently condition consent on additional security — a larger deposit or a personal guaranty from the new tenant’s owners — especially if your business is newer or less creditworthy than the assignor. A personal guaranty turns a corporate lease obligation into personal exposure, so treat any guaranty demand as a major term, not a formality.
Negotiate the scope: a capped or "good guy" guaranty (limited to amounts accruing until you properly surrender the space) is far better than an unlimited, full-term guaranty.
If the original tenant’s obligations were personally guaranteed, confirm whether that guaranty is being released (the guarantor will want that) and whether the landlord requires a replacement. Make sure you are not unknowingly assuming someone else’s guaranty, and that any guaranty you give is documented and limited.
Coordinate the deposit and guaranty terms with the landlord consent so there are no surprises at closing.
Key takeaways
- Confirm the actual deposit the landlord holds (it can differ from the lease).
- The deposit does not automatically transfer — agree who funds it at closing.
- Landlords often condition consent on a larger deposit or a personal guaranty.
- A personal guaranty creates personal exposure; prefer a capped or "good guy" guaranty.
- Clarify release of any existing guaranty and document any new one.
Official resources
Legal-review notes
Guide confidence marker: Medium confidence.
- Deposit transfer and guaranty terms are negotiated and depend on the lease and consent; confirm with counsel.
- Guaranty scope and enforceability vary by state; have an attorney review any guaranty before signing.
Frequently asked questions
Does the security deposit transfer when I take over a lease?
Not automatically. Confirm in the estoppel how much the landlord actually holds, then agree whether the seller’s deposit is credited to you (with reimbursement to the seller) or returned while you post a new one. Document who funds the deposit at closing and get the landlord’s acknowledgment.
Can the landlord require a personal guaranty to approve the assignment?
Often yes, especially if your business is newer or less creditworthy than the assignor. A personal guaranty creates personal exposure, so negotiate its scope — a capped or "good guy" guaranty limited to amounts until you properly surrender is far better than an unlimited full-term one.
What is a "good guy" guaranty?
A limited personal guaranty common in commercial leasing that caps the guarantor’s exposure to obligations accruing until the tenant vacates and surrenders the premises properly, rather than for the entire remaining term. It is much less risky than an unlimited guaranty.