What is my personal liability if I was a member of a non-profit 501(c)(3) and signed a lease?
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What is my personal liability if I was a member of a non-profit 501(c)(3) and signed a lease?
I signed a lease for a building along with another individual. The lease says, “Both Person 1 (me) and Person 2 (the other guy) are personally liable for any debts incurred during the time of this lease for X. If their relationship is severed, the remaining operator will incur the total obligation.” The contract was signed by two Lessees and the landlord. Unfortunately, Person 2 became difficult to work with and made financial decisions that caused the bank account to be overdrawn and resisted fixing the problem. I decided to leave the ministry. Am I still liable for the lease? The landlord doesn’t think so, but the other member of this christian organization is suing me. He claims that I still owe.
Asked on June 16, 2014 under Real Estate Law, Idaho
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
You write that you signed a lease stating that you would be personally liable for any debts incurred during the lease. Having signed a guaranty like that (an agreement guarantying that you'd pay any obligations), you would typically be held liable for any amounts due under the lease, even though you were a member of an organization when you signed.
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