What Is an AGA and When Does It Apply?
An Authorised Guarantee Agreement (AGA) is governed by s.16 Landlord and Tenant (Covenants) Act 1995. Under L&T(C)A 1995, when a new lease (granted on or after 1 January 1996) is assigned, the outgoing tenant is automatically released from all tenant covenants of the lease. The landlord can require the outgoing tenant to give an AGA as a condition of consenting to assignment. An AGA guarantees the immediate assignee's performance of the tenant covenants � but only for the period during which the immediate assignee holds the lease. The AGA expires when the assignee itself assigns the lease. Anti-avoidance (s.16(4)): any agreement requiring the outgoing tenant to guarantee any person other than the immediate assignee is void � a landlord cannot require the AGA to survive a further assignment. Old law leases (pre-1 January 1996) are not subject to L&T(C)A 1995 � original tenants remain liable under privity of contract throughout the term.
Section 17 Notice � Pursuing Former Tenants
Section 17 L&T(C)A 1995 requires a landlord to serve a notice on a former tenant or guarantor before recovering a fixed charge (rent, service charge, or other liquidated sum) under an AGA or privity of contract. The s.17 notice must be served within 6 months of the charge becoming due, in the prescribed form (SI 1995/2964). If the landlord fails to serve a valid s.17 notice within 6 months, the right to recover that fixed charge from the former tenant is permanently lost. Section 19 overriding lease: a former tenant who pays sums demanded under a s.17 notice can require the landlord to grant an overriding lease � a new lease between the landlord's reversion and the current tenancy, enabling the former tenant to forfeit and recover possession from the defaulting current tenant. S.17 applies equally to pre-1996 leases and to AGA providers under new leases.