An authorised guarantee agreement tenant, commonly referred to as an “AGA tenant,” is a term used in UK property law. It refers to a tenant who has entered into an authorised guarantee agreement with their landlord.
What is an authorised guarantee agreement?
An authorised guarantee agreement is a legal contract that is signed by a tenant who is transferring their lease to a new tenant. The agreement essentially guarantees that the new tenant will fulfill all of the obligations and responsibilities of the original lease. If the new tenant fails to do so, the original tenant (the AGA tenant) will be responsible for the breach of contract.
Why would a tenant agree to an authorised guarantee agreement?
There are several reasons why a tenant may choose to enter into an authorised guarantee agreement with their landlord. One reason is that it may be required by the landlord as a condition of transferring the lease to a new tenant. Additionally, an AGA tenant may choose to enter into the agreement in order to preserve their reputation and relationship with the landlord. By agreeing to be responsible for the actions of the new tenant, the AGA tenant is demonstrating their commitment to fulfilling the terms of the lease.
What are the risks of being an authorised guarantee agreement tenant?
Being an AGA tenant carries certain risks and responsibilities. If the new tenant breaches the terms of the lease, the AGA tenant may be held liable for any damages or losses that result. This means that the AGA tenant may be required to pay rent, repair or maintenance costs, or any other expenses associated with the breach of contract.
It is important for tenants to fully understand the terms and implications of an authorised guarantee agreement before agreeing to it. This may involve seeking legal advice or consulting with a property expert.
In conclusion, an authorised guarantee agreement tenant is a tenant who has agreed to be responsible for the actions of a new tenant in a lease transfer. While this can help to preserve the tenant`s reputation and relationship with the landlord, it carries certain risks and responsibilities. Tenants should carefully consider the implications of an AGA before agreeing to it.