Document background
The Lease Performance Bond serves as a risk mitigation tool in commercial lease arrangements within the United States. It is typically required when a landlord seeks additional security beyond a standard security deposit, especially for high-value commercial leases or when dealing with tenants who have limited credit history or financial standing. The bond amount is usually calculated based on a percentage of the annual lease value or specific risk factors. This document outlines the surety's obligation to compensate the landlord up to the bond amount if the tenant defaults on rent payments or other lease obligations. The Lease Performance Bond includes specific provisions for claims procedures, notice requirements, and the surety's rights of subrogation, all governed by applicable state and federal regulations. It's particularly important in commercial real estate transactions where significant financial exposure exists.
