Authorised guarantee agreements
Authorised guarantee agreements

The following Property guidance note provides comprehensive and up to date legal information covering:

  • Authorised guarantee agreements
  • What is an authorised guarantee agreement (AGA)?
  • The contents of an AGA
  • Can an outgoing tenant’s guarantor be forced to give an AGA in place of the outgoing tenant?
  • Unauthorised assignments and AGAs

What is an authorised guarantee agreement (AGA)?

Under an AGA an outgoing tenant guarantees some or all of the obligations of an incoming tenant under a lease. It was introduced to appease landlords whose strength had been substantially reduced by the abolition of original tenant liability and it only applies in relation to new leases (ie those granted on or after 1 January 1996, excluding those granted after 31 December 1995 but under an agreement for lease, option or court order made before that date).

An AGA may be a separate document or included in a licence to assign. In either case it must be in writing and signed by the guarantor to be enforceable.

An AGA must:

  1. be an agreement where the tenant guarantees the performance by the assignee of the covenants from which the tenant has been released. Where a tenant assigns in breach of covenant or by operation of law, the tenant has not been released (see Unauthorised assignments and AGAs), and

  2. be entered into where the lease contains a covenant against assignment without the landlord’s consent and consent will only be given on the condition (which must be lawfully imposed) that the outgoing tenant guarantees the performance of the tenant covenants by the assignee. This condition is lawfully imposed if set out in the lease

  3. conform with