Questions & Answers
Responsibility for a rental loan of the company after issuing a cheque from the personal checkbook
I am named a defendant in a RERA rental case for a commercial case. The tenancy is in the name of and signed by the local partner. The premise is used by the company in which I am one of the partners.
At the time of leaving the premise, there were arrears on rent for which I issued PDCs from my personal checkbook. They bounced as I had difficulty in keeping up with the payments. Am I liable in this RERA case as one of the defendants when I am not the signatory on the tenancy nor the responsible manager of the company?
Under Article 599 (2) of Federal Law No. (18) of 1993 Issuing the Commercial Transactions Law:
"Whoever draws a cheque in person, or through a person receiving an order to draw it for his account, shall deposit sufficient consideration for its payment. Nevertheless, the drawer for the account of others is personally liable towards the endorsers and the bearer, to the exclusion of all others, to provide the required consideration for payment."
Therefore, even if the tenancy is not in your name or you are not a partner, manager, or signatory of the company, you are still obligated by law to honor the cheques. In short, the landlord can legally proceed against you through civil and criminal recourse. Hope it clarifies.
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