In my last post, “Real Estate Alphabet Soup: F is for Foreclosure” I continued my primer on the “alphabet soup” of real estate. This post continues to stir the “alphabet soup” with the letter “G.”
G is for “guaranty.” A guaranty is a promise or agreement to answer for, that is, to be responsible for, the debt or default of another. The “guarantor” is the person who makes the promise or “guaranty” for the benefit of the “guarantee” or beneficiary. The guarantor promises and agrees to perform the acts or pay the costs promised to be done or paid by another person if that person fails to fulfill those obligations. Guaranty agreements are frequently used in real estate transactions. Lenders often require a personal guaranty of an individual assuming a debt in the name of a business entity, so that if the business fails to pay the debt, the lender can seek repayment of the debt from the individual who made the promise or guaranty on behalf of the business entity.
G is also for “ground rent”, which is rent paid under a “ground lease” for the lease of certain lands. It is a real property interest in the right to rent collected through the lease of certain lands, and is separate from the interest of the owner of the land.
And of course, G is for “ground”, the soil, land and earth upon which we live, and which forms the base and basis for everything that makes up the world of real estate.
In my next post, I will move on to the letter “H”, the next letter in this real estate “alphabet soup.”
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