Overview

Since the abolition of privity of contracts in leases on 1 January 1996 tenants and their guarantors have been released from liability on a valid assignment of the lease. Tenants are usually required to enter into an authorised guarantee agreement ("AGA") on assigning their lease. The AGA guarantees the assignee's obligations. When the Landlord and Tenant (Covenants) Act 1995 ("the 1995 Act") first became law there was some uncertainty as to whether a landlord could require a tenant's guarantor to guarantee the tenant's obligations under an AGA. As landlords became more comfortable with the 1995 Act, they agreed deals on the assumption that guarantors would remain on the hook.

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