AGAs, The Good Harvest Case - An Update

In our Law-Now of 26 February 2010 (AGAs – Landlords must look forward and not back!) we pointed out the problems created by the decision in the case of Good Harvest Partnership LLP -v- Centaur Services Limited [2010] EWHC 330.  The case was appealed and was to be heard by the Court of Appeal on 29 June 2010.  The case settled before being heard.  Unfortunately this leaves us with the unsatisfactory position that has resulted from the High Court's decision in January 2010.

The case is clear on one point – that because of the provisions of the  Landlord and Tenant (Covenants) Act 1995 only a former tenant can give an AGA.  A guarantor cannot give a guarantee to the AGA and will be released on assignment, regardless of any agreement to the contrary.