Q&As

In an authorised guarantee agreement on assignment, can the assignor and its guarantor require the assignee’s personal guarantor to give them an indemnity or would this be contrary to the anti-avoidance provisions of the Landlord and Tenant (Covenants) Act 1995?

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Published on LexisPSL on 02/09/2016

The following Property Disputes Q&A provides comprehensive and up to date legal information covering:

  • In an authorised guarantee agreement on assignment, can the assignor and its guarantor require the assignee’s personal guarantor to give them an indemnity or would this be contrary to the anti-avoidance provisions of the Landlord and Tenant (Covenants) Act 1995?

We assume this Q&A is referring to the assignor and their guarantors requiring an indemnity (as opposed to a guarantee) from the assignee’s guarantors in the event that the assignor has to pay out under the authorised guarantee agreement (AGA), as outlined in clause 7.2 of our Precedent: Deed of assignment of a lease.

See Practice Note: Acting for a tenant—assignment of existing lease—key issues which explains that an indemnity covenant is designed to protect the tenant from obligations which will continue to bind the tenant after completion. Where required:

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