Q&As

If a lease provides an obligation on the tenant to provide an authorised guarantee agreement (AGA) on assignment and there is no reasonable element, are there any circumstances in which the tenant can argue that an AGA is not needed because it is unreasonable for the landlord to request one?

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Produced in partnership with Helen Galley of XXIV Old Buildings
Published on LexisPSL on 15/11/2018

The following Property Q&A produced in partnership with Helen Galley of XXIV Old Buildings provides comprehensive and up to date legal information covering:

  • If a lease provides an obligation on the tenant to provide an authorised guarantee agreement (AGA) on assignment and there is no reasonable element, are there any circumstances in which the tenant can argue that an AGA is not needed because it is unreasonable for the landlord to request one?

The lease provides that on assignment, the assignor must enter into an authorised guarantee agreement (AGA) with the landlord but there is no qualification of reasonableness to that obligation. Are there circumstances in which the assignor can argue that they do not have to enter into an AGA on the grounds that it is unreasonable for the landlord to require one?

Before the Landlord and Tenant (Covenants) Act 1995 (LT(C)A 1995), the original tenant under a lease would remain bound by the covenants on the part of the tenant contained in a lease notwithstanding the assignment of the lease. This meant that if the landlord could not, or did not want to try to, enforce the covenants against the assignee, they could seek to do so against the assignor. The effect of LT(C)A 1995, s 5 was that, if the tenant assigns the whole of the premises demised to them, they—

  1. are released from the tenant covenants of the tenancy, and

  2. ceases to be entitled to the benefit of the landlord covenants of

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