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?

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:

  1. the indemnity covenants should be included in the transfer or deed of assignment—it is best practice to agree the

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