08 ápr Authorised Guarantee Agreement Landlord And Tenant (Covenants) Act 1995
In Good Harvest, the outgoing tenant and his guarantor entered into an AGM agreement to ensure that the assignee complies with the obligations of the lease. Subsequently, the new tenant had fallen behind in the payment of the rent and the landlord initiated proceedings against the guarantor of the outgoing tenant on the basis of the federal contract issued in the guarantee contract. The lessor submitted that a new guarantee for the obligations of the assignee by the guarantor of the outgoing tenant was not contrary to the anti-avoidance provision provided for in section 25 (1) of the Act (which provides that any agreement (except an AGM) is void with respect to a tenancy agreement if it limits the operation of the law, since the surety would assume new obligations and not the obligations that would be released at the time of the assignment. The surety argued that section 16 of the Act (AGM authorization), which constitutes a specific exemption from the exemption of tenants under Section 5 of the Act, is only for tenants and applies only to tenants who have set up an AGM. When a lessor requires a tenant to enter into a contract-compliant guarantee contract (AGM) in the event of a transfer authorized by section 16 of the law, the tenant is liable in the tenancy agreement until the transferee of the leases is legally released. After receiving a notification s17, the surety must pay liability to the owner. At this point, the guarantor is not in possession of the premises (after terminating the lease), but is still required to pay the rent for each subsequent quarter if the assignee does not pay it. After receiving a notification of the s.17 on which he has made a payment, the surety can resolve the case by providing the notification under section 19 of the 1995 Act (a “s.19 communication”) requesting the granting of a “high-predominance lease agreement”. This new tenancy agreement is inserted between the interests of the lessor and the assignee and the agent is transformed into a subtenant. This allows the guarantor to sue the assignee for the rental debt and/or negotiate an assignment of the sublease and/or succumb to the lease agreement (which is now a sublease) which allows the guarantor to reuse or market the premises and resell them a second time. In the context of a business lease, the “Privity of Contract” doctrine means that the first tenant (original) may give up interest in rent (with suspension of the granting of a rental permit), but not its relationship with the lessor.
It was found that the assignee`s surety in the lease agreement of House of Fraser plc (the assignee`s guarantor) was non-aeig. This is totally contrary to the objective of section 24, paragraph 2, of the Act, which is to release the deposit of an outgoing tenant for an assignment to the same extent as the outgoing tenant. Nor can the guarantor of an outgoing tenant guarantee a transferee on a voluntary basis. The Authorized Guarantee Agreements Act is complex and evolving as the cases of the Landlord -Tenant (Covenants) Act 1995 (the “1995 Act”) are ongoing. A second provision saw “… the tenant`s guarantor accepts that his guarantee and other obligations arising from the tenancy agreement remain fully effective and… the obligations he has undertaken and the tenant`s obligations under this licence extend and apply. The lessor may have several persons to whom a notification s.17 can be served and must be aware that each of them can apply for a higher lease.