The High Court recently decided that the administrative receivers of an insolvent tenant could not be required to personally enter into an authorised guarantee agreement (AGA).
Leases granted after 1996 usually provide that before any assignment the outgoing tenant must provide an AGA guaranteeing the performance of the tenant's covenants by the new tenant. An AGA from a tenant in administrative receivership is of limited benefit to a landlord. It appears that in this case the landlord required an AGA from the insolvent tenant, which it was entitled to do, but was unable to improve its position by insisting upon an AGA from the administrative receivers.
The landlord contended that the AGA should be given by both the tenant and the administrative receivers, because it would not otherwise be effective. The appeal related to whether it was appropriate to strike out the tenant's claim for relief from forfeiture, but the judge commented that an AGA, without a personal guarantee from
