337. Old tenancies: guarantors and sureties.

The liability of a person who guarantees the performance of the tenant's obligations under the lease only arises if the original debtor defaults, but that liability may be extended by the terms of the guarantee. The guarantor will have a continuing liability even though the lease has been disclaimed and the tenant's obligations terminated1. The benefit of a tenant's surety's covenant passes automatically to a buyer of the reversion2, as does the benefit of a surety's covenant to accept a lease to replace one disclaimed on the tenant's insolvency3.