The New York Court of Appeals Reverses Long Standing Case Law on the Meaning of “Surrender” Under a “Good Guy” Guaranty

On October 21, 2025, the New York Court of Appeals issued a significant decision in 1995 CAM LLC v. West Side Advisors, LLC, clarifying the scope of liability under a “good guy” guaranty in commercial leases.  Lower courts have consistently held that if a lease states that Landlord’s written consent is required in order for a surrender to be valid, and the “good guy guaranty” incorporates the entire lease into the guaranty, then the guarantor’s liability ends upon both vacatur and Landlord’s written acceptance thereof.  However, the Court held in this case that a guarantor’s liability under a “good guy” guaranty ends when the tenant vacates the premises and provides the required notice (if any is required), even if the landlord does not formally accept the surrender as the lease requires.  The Court reasoned that if landlord’s acceptance is required, then “all of the conditional language in the guaranty would be superfluous”.

This ruling shifts the balance towards tenants and guarantors and prudent landlords should consider updating their standard form of guaranty to reflect the implications of this ruling.

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Written by: Allison R. Lissner, Partner, Commercial Leasing Practice.