The Court of Appeal confirmed that the outgoing tenant`s deposit can, when awarding a tenancy agreement to a third party, guarantee the debts of the outgoing tenant under an approved guarantee agreement (AGM). In this regard, the surety can indirectly guarantee the obligations of the arriving tenant. This subtle and complex legislation can be important pitfalls, especially for unwary renters and anyone responsible for developing the various transfer and warranty documents. The law did not change the subletting rules, but it did mean that the parties could enter into an agreement with any commercial lease agreement, usually expressly in the lease agreement, indicating the circumstances under which consent to the assignment may be refused or under conditions under which consent may be given. When the tenant and the original assignee entered the administration, the lessor attempted to recover the rent from the co-operative group as part of the above guarantees. It is for the Tribunal to ascertain whether the provisions constituted a valid partial guarantee of an AGe and were therefore enforceable; or whether they were direct guarantees that were invalid and unenforceable under the 1995 Act. In January 2006, K/S Victoria Street agreed to sell and lease a property in Wolverhampton to a House of Fraser Company. In accordance with the agreement, the management of the subsidiary should take over a lease guaranteed by the group`s holding company. The lease also required him to transfer the lease to another company in the group until April 2006, but no transfers ever took place.
In March 2010, the owner filed a lawsuit against the three Fraser House businesses that wanted to impose the assignment. If your lease was granted after 1996, there are more restrictions that the owner can sue in the event of a breach of the lease. In most cases, the lessor asks you for an authorized warranty contract if the lease is awarded, and this is a condition of the assignment, otherwise you will not get your landlord`s license. The advantage of the agreement is that the responsibility to guarantee the obligations of your successor according to DerArt, that your direct successor has received the lease, ends. As a general rule, the lessor`s lawyers provide a standard form of the agreement to transfer the lease. If the agent does not resign, you will remain liable until the lease expires. The issue was how a surety could guarantee the obligations of an outgoing tenant in an approved warranty contract (AGM) without violating the Landlords and Tenants Act (Covenants) Act 1995. The Court of Appeal confirmed that the deposit of an outgoing tenant cannot directly guarantee the debts of the incoming tenant when awarding a tenancy agreement. The High Court found that this is a valid partial guarantee (in accordance with the summary judgment of 2018). The decision could be justified in two ways: this decision will greatly improve the position.
Until now, it had been held that guarantors could not assume any other responsibility after the award of a lease agreement. In general, this problem has been resolved. House of Fraser relied on the Good Harvest decision to argue that the agreement was not applicable. The High Court agreed and decided that the parent company`s guarantee was not valid as an outbound guarantee for the new tenant`s debts under the lease. It also expressed doubts about the effectiveness of partial guarantees, i.e. outgoing surety guarantees on the debts of outgoing tenants under AGAs. The decision made it difficult for landlords and tenants to make it difficult for landlords and tenants to place orders with each other. In the end, in Coop, on the sole basis of a provision of the transfer licence, the AGM was retained in that complaint as an enforceable partial guarantee.