Bank Guarantees are one of the most common features of retail and commercial leases. For good reason, as they provide landlords with effective security against the tenant defaulting under the lease. There is a tendency amongst landlords to regard physical possession as the end of the story and to file away the Bank Guarantee until it is required because of a breach or it is returned to the tenant at the expiration of the lease. This will ensure that if the tenant breaches the lease, such as failing to redecorate/reinstate the premises following the expiry or simply disappears, you will still have a valid Bank Guarantee to enforce against this breach.
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