Authorised guarantee agreements (Procedural steps for the assignment of a lease)- FS Flashcards
(10 cards)
What is an Authorized Guarantee Agreement (AGA)?
A contractual agreement where the outgoing tenant guarantees the performance of lease obligations by the incoming tenant following a lease assignment.
What liabilities can an AGA cover?
Rent, repairs, and all lease covenants—the outgoing tenant remains liable if the assignee fails to comply.
What was the position before the 1995 Act?
Outgoing tenants remained automatically liable for the lease even after assignment, unless expressly released by the landlord.
When is an AGA required under the Landlord and Tenant (Covenants) Act 1995?
Only if the lease was granted on or after 1 January 1996, and the landlord expressly requires it.
What is the default position under the 1995 Act regarding outgoing tenants’ liability after assignment?
The outgoing tenant is automatically released from future lease obligations, unless an AGA is signed.
Who Can Be Held Liable Under an AGA?
- Only the outgoing tenant who signed an AGA for the specific assignment
- Not earlier tenants without a continuing AGA
- Liability does not pass indefinitely through all prior tenants
In a chain of lease assignments, when is an outgoing tenant not liable?
When no AGA was required or signed at the point of assignment to the next tenant.
In the SRA sample scenario, why is the chemist liable but not the clothing retailer?
The chemist signed an AGA, but the clothing retailer did not, creating a break in the liability chain.
How does a landlord ensure privity of contract with the assignee when consenting to a lease assignment?
By requiring the assignee to enter into a direct covenant within the licence to assign, agreeing to observe and perform all tenant covenants under the lease.
from oup
Can a licence to assign include a direct covenant from the assignee to the landlord?
Yes. Even under a post-1996 lease, the landlord may require it to ensure direct liability for lease covenants.
OUP
