Personal guaranty
Am I still on the hook after I sell the hotel?
Favours the drafting party
What it does
Puts an individual's own assets behind the entity's obligations under the agreement — including, in most forms, the liquidated damages figure.
Why it matters
Guaranties are presented as non-negotiable more often than they are. The provision that matters most is not whether you sign one but whether it ever ends: a guaranty that survives the sale of the hotel leaves a former owner exposed to a business they no longer control.
What to watch for
- No release on a permitted transfer, or release only by express written instrument the brand need not give
- Coverage extending to obligations arising after you have sold
- Joint and several liability across multiple principals
- No cap, so it inherits whatever the damages formula produces
- Spousal signature requirements
What to ask for
- Automatic release on a brand-approved transfer, for obligations arising after closing
- A monetary cap independent of the damages formula
- A burn-off that reduces the exposure as the hotel performs or as the term runs
- Several rather than joint liability, proportionate to ownership
How common is it
Documents filed with the SEC containing the exact phrase “personal guaranty”.
View as a table
| Year | Documents |
|---|---|
| 2019 | 391 |
| 2020 | 497 |
| 2021 | 476 |
| 2022 | 537 |
| 2023 | 735 |
| 2024 | 952 |
| 2025 | 1,246 |
Real filings using it
- Morgan Stanley Capital I Inc. (CIK 0001547361) — ABS-15G, 2025-05-09
- J.P. Morgan Acceptance Corp II (CIK 0001142786) — ABS-15G, 2025-06-13
- Morgan Stanley Capital I Inc. (CIK 0001547361) — ABS-15G, 2025-06-06
Source: SEC EDGAR full-text search (efts.sec.gov). Retrieved 2026-08-30. Counts are filed documents matching an exact phrase, not deals, and EDGAR indexes public-company filings — read these as public-company practice, not as evidence of what private mid-market agreements contain.
What usually gets agreed
Release on approved transfer for post-closing obligations is frequently obtainable and is the single most valuable ask. A cap is harder; a burn-off tied to performance is sometimes offered as the compromise.
Related
- Liquidated damages — A formula fixing what the franchisor is owed if the agreement ends before its term runs.
- Transfer and consent — The brand's right to approve a sale, and everything it can require in exchange.