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Commercial Lease Law

Authorised Guarantee Agreement (AGA) UK — Landlord's Guide

An Authorised Guarantee Agreement (AGA) is a guarantee a commercial landlord can require from an outgoing tenant on assignment of a new lease under s.16 Landlord and Tenant (Covenants) Act 1995. The AGA replaced privity of contract for new leases (granted on or after 1 January 1996): outgoing tenants are released on assignment but can be required to guarantee the immediate assignee's performance. Duration: AGA lasts only while the immediate assignee holds the lease; anti-avoidance (s.16(4)) voids any provision extending AGA liability beyond the immediate assignee. S.17 notice: landlord must serve a s.17 notice in prescribed form within 6 months of a fixed charge becoming due to pursue a former tenant under an AGA or privity of contract in pre-1996 leases. S.19 overriding lease: former tenant who pays under s.17 notice can require the landlord to grant an overriding lease. Old law leases (pre-January 1996): AGA regime does not apply — original tenants remain liable throughout under privity of contract. Scotland: no equivalent AGA regime; different assignation rules under Scots law.

10 min readUpdated 7 June 2026Last reviewed: 17 May 2026authorised-guarantee-agreementagaassignment-commercial-leaseprivity-of-contract

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.

Frequently asked questions

What is an Authorised Guarantee Agreement?+

An AGA is a guarantee given by an outgoing tenant on assignment of a new commercial lease under s.16 Landlord and Tenant (Covenants) Act 1995. The outgoing tenant guarantees the performance of the incoming tenant's covenants for the period during which the incoming tenant holds the lease. The AGA expires automatically when the incoming tenant itself assigns the lease.

How long does an AGA last?+

An AGA lasts only for the period during which the immediate assignee holds the lease. When the assignee itself assigns, the outgoing tenant's AGA obligations end. S.16(4) L&T(C)A 1995 voids any provision attempting to extend AGA liability beyond the immediate assignee's period of tenure.

Does a landlord need to serve a section 17 notice before pursuing a former tenant under an AGA?+

Yes. The landlord must serve a s.17 notice in the prescribed form within 6 months of a fixed charge becoming due. If this notice is not served in time, the landlord loses the right to recover that charge from the former tenant permanently.

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