An Authorised Guarantee Agreement (AGA) is a legally binding document used by landlords to ensure outgoing tenants guarantee the fulfilment of lease obligations by the incoming tenant.
The Commercial Property team at TV Edwards will help you ensure your rights as a landlord are secured with expert advice.
Understanding Authorised Guarantee Agreements
An AGA is an agreement, a written binding document, obliging the outgoing tenant to remedy the breaches of the incoming tenant, should a breach occur, when a lease is assigned. This agreement provides a landlord with a guarantee of fulfilment if the new tenant defaults on rent, property maintenance or other lease obligations.
Under an AGA, the outgoing tenant will be liable for the following:
- Any unpaid rent
- Any unpaid insurance
- Any unpaid service charge
- Any repair work not carried out
- Any other terms of the lease breached by the current tenant including:
- The taking of a new lease (by the outgoing tenant) for the remainder of the duration of the current lease should the current lease be forfeited or
- The marketing costs of the property including the payment of the void period generally not exceeding 6 months or reletting of the property, whichever is sooner
- The legal costs of the landlord in dealing with the above.
Landlords are obligated by law not to unlawfully refuse any request made by a tenant who seeks the landlord’s consent to assign. The lease will, more often than not, allow the landlord to stipulate the above conditions in an agreement allowing the tenant to assign the lease.
Please also see our Licence to Assign page as the Licence to Assign agreement and the AGA are generally complimentary documents. With decades of experience, we here at TV Edwards are here to ensure your rights as landlords are secured.
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Our Approach to Authorised Guarantee Agreements
At TV Edwards, Commercial Property matters are handled by experienced solicitors Omer Kahraman and Mark Curtis, under the leadership of Juanita Francis, Partner and Head of Property and Probate.
The team will take the time to collate all the information on your property and tenancy agreement(s), building an accurate picture of obligations on both sides. We will then advise you on all aspects of the AGA, ensuring you are able to procure the guarantees you need as a landlord. Our Commercial Property Team offer a personal, friendly and professional service, and will work diligently to assist you with your matter.
If you have an inquiry and would like to speak with one of our specialist lawyers, please call us today on 0203 440 8000.
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Frequently Asked Questions Regarding AGA
What is the difference between a guarantor and an AGA?
A guarantor is an individual or entity that agrees they will guarantee to fulfil a commercial lease obligation if the tenant does not. An AGA is a specific type of guarantee signed by the outgoing tenant to guarantee they will fulfil any broken lease obligations by the new tenant.
When can a landlord request an AGA?
An AGA is commonly requested when the tenant wishes to assign a commercial lease. The tenant signing the agreement is usually a condition for the landlord to agree to the assignment in the first place.
How long is an AGA typically in place for?
The AGA will last until the new tenant signs the next agreement, or if the lease term ends. However, this is agreed upon by both parties and is often dependent on the individual circumstances of the lease.
What are the benefits of an Authorised Guarantee Agreement?
An AGA, put simply, is a safety net for landlords to ensure that any breaking of the lease obligations by the new tenant is covered by the outgoing tenant. It protects your interests as the property owner and forms a key component of commercial property law.
