Authorised guarantee agreement (AGA)

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This document is a draft authorised guarantee agreement (AGA). It contain provisions whereby an assigning tenant guarantees the obligations of the incoming tenant. It also includes provisions whereby the assigning tenant's own guarantor guarantees the obligations of the assigning tenant under this AGA. 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 [2011] EWCA Civ 904 (27 July 2011), this form of 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.

The AGA is a free-standing document (i.e. not contained within a licence to assign). However, obviously, it is to be used in conjunction with the Property PSL licence to assign. For those who prefer a combined licence to assign/AGA, see licence to assign (with authorised guarantee).

Before using this precedent document, it is advisable to read the drafting notes accompanying it. If you have any queries or comments about this document or the drafting notes, use the contact tab at the top of the page.

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