Rental Guarantee Bonds

CBL Insurance is able to provide commercial and industrial landlords’ with peace of mind, by issuing rental guarantee bonds. Should the tenant default financially, these bonds will pay the ongoing lease rentals on a specified property, to the landlord.

The loss of a tenant can cause significant loss to a landlord. A loss in terms of the time it takes to pursue the defaulting tenant and find a replacement tenant; loss of rental in the interim period; outgoings which still need to be covered; loss in investment value while still vacant; legal costs.

A rental guarantee bond issued by CBL Insurance can help solve these issues and will not only protect the rental income of the property by decreasing the rental capitalisation rate but also protects the capital value of the property.

An additional benefit of the product is that it effectively removes the landlords need for personal guarantees which are often problematic. In some instances a potentially good tenant walks away from a rental due to the insistence on this type of guarantee, which can result in significant personal exposure.