Am I released from my personal guarantee when I sell my business?

A personal guarantee is the piece of a sale sellers most often assume disappears the moment they sign the purchase agreement, and it is one of the more likely items to still be attached to them a year later, quietly, if nobody addressed it at closing.

The guarantee outlives the sale unless someone ends it

A guarantee is a contract with the landlord, entirely separate from the purchase agreement between the buyer and seller. Selling the shares or the assets of the business does not touch that separate contract at all, because the landlord was never a party to the sale and has no obligation to release anyone simply because ownership changed hands.

Ask for release as part of the assignment, not as an afterthought

The moment a landlord is negotiating consent to the assignment — often the same conversation where they ask the buyer for a fresh guarantee — is the point of maximum leverage to also secure the seller’s own release, since the landlord wants the deal to close too. Waiting until after closing to raise it removes that leverage entirely.

If the landlord won’t release you, negotiate an indemnity instead

Where a landlord insists on keeping the outgoing owner’s guarantee as extra security, common with a newer or less established buyer, a seller can still get contractual protection through the purchase agreement itself: an indemnity requiring the buyer to reimburse the seller for anything the landlord collects under the guarantee later. That protection is only as good as the buyer’s solvency when a claim eventually arises.

A landlord’s leverage cuts both ways

A landlord facing a strong, well-qualified buyer has less reason to insist on keeping the outgoing guarantee than one facing a marginal one, which makes a seller’s negotiating position for release strongest with the most creditworthy buyer, not necessarily the highest offer.