For further advice relating to Authorised Guarantee Agreements, get in touch with Farleys’ Commercial Property Department on 0845 287 0939 or alternatively contact us through the website. Simply put, an AGA’s is a type of legally binding guarantee used to protect a landlord’s interests in cases where the tenant sells or assigns their lease to a new tenant. You may have to! Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. Authorised guarantee agreements (AGA’s) were introduced under the Landlord and Tenant (Covenants) Act 1995 in an attempt to conciliate the potential risk to the landlord if the new tenant proves unreliable and confusion over the outgoing tenant’s liability. Landlords can only legally require a tenant to enter into an AGA if it is an expressed condition of assignment in the lease. Some common examples of provisions an AGA could demand of the assigning tenant include the following: Taking on the role of guarantor puts you at risk of considerable financial costs and time commitments if the assignee proves to be unreliable, particularly if you have no legal commitment from them to meet the lease terms. An agent will advise on the marke... You can trust our specialists at Farleys Solicitors to give you outstanding, straight talking legal services at any of our six offices across the North West - Get in touch with us today! These cookies do not store any personal information. The Coronavirus Job Retention Scheme has been extended until 31 March 2021. 9 When is an AGA void? The approach taken in the Practical Law documents. What is a Guaranty Agreement Contract Form? An AGA cannot impose any further liability on the outgoing tenant than the liability already contained in the lease, otherwise it would be deemed void. and that the execution, delivery and performance of this Guaranty by it have been duly authorized by any necessary corporate or other action. The main purpose of guarantee agreement is it acts as a security for the loan taken by the debtor. After 1 January 1996 when the 1995 Act came into operation, the change in the law introduced what is known as an Authorised Guarantee Agreement, or “AGA” for short. The guarantor will take full responsibility of the remaining balance on behalf of the tenant. Now, and assuming completion of an AGA, the first tenant on assignment only remains liable for the duration of the first assignee’s interest in the tenancy. Always take professional legal advice. Since its launch in 2008, Airbnb has grown to become a name that is recognised all over the world. An Authorised Guarantee Agreement is needed for the assignment of the remainder of the term of a lease of business premises to a new tenant – “the assignee” – if the lease is classed as a new lease under the Landlord and Tenant (Covenants) Act 1995. 3 min read Necessary cookies are absolutely essential for the website to function properly. 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