This document is a draft licence to assign a lease incorporating an authorised guarantee agreement (AGA). Accordingly, it is a licence to assign a lease that is a new tenancy for the purposes of the Landlord and Tenant (Covenants) Act 1995.
For those who prefer to keep the licence to assign and AGA as separate documents, there is a separate form of Property PSL AGA (a free-standing precedent document) and a separate form of Property PSL licence to assign. The separate licence to assign can be used whether the lease that is being assigned is an old lease (i.e. a lease that is not a new tenancy for the purposes of the Landlord and Tenant (Covenants) Act 1995) or a new lease. (Of course, AGAs are only applicable in relation to new leases).
This combined licence to assign/AGA contains:
- fresh guarantee covenants to be entered into by any new guarantor (the “Assignee’s Guarantor) offered to support the assignee's liabilities;
- an AGA, given by the outgoing tenant (the “Tenant”); and
- a guarantee of the AGA by the outgoing tenant’s guarantor (the “Tenant’s Guarantor”). According to obiter comments of the Court of Appeal in K/S Victoria Street (A Danish Partnership) v House of Fraser (Stores Management) Ltd & Ors  EWCA Civ 904 (27 July 2011), this latter guarantee should be valid, and therefore many landlords continue to insist on its inclusion. However, obiter comments are not the same as hard and fast law. There may still be scope for the Supreme Court to think differently.
Before using this precedent document, it is advisable to read the drafting notes that accompany the free-standing licence to assign and AGA documents. In addition, where the assignee's obligations are supported by a guarantee, it is advisable to read the detailed drafting notes relating to the guarantee provisions included in all Property PSL leases (which can be found with the Property PSL lease of whole (office)).