When tenants offer landlords guarantees of their lease
liabilities landlords need to take care what assignment rights the
tenant can have and this was demonstrated in last week's Court
of Appeal decision in Tindall Cobham 1 Ltd v Adda
Hotels.
As you may recall, prior to the KS Victoria case
(previously reported
here) it was quite common for guarantors of an outgoing tenant
to also guarantee the obligations of the incoming assignee. The
KS Victoria case held that this arrangement fell foul of
the provisions the 1995 Act as it sought to limit the release of
the liabilities of outgoing tenants and guarantors upon
assignment.
In the Tindall case the tenant sought to take advantage of
the outcome of the KS Victoria case on a lease assignment
to a group company where there was only one pre-condition to the
assignment to a group company - that the tenant's guarantor had
to provide a repeat guarantee of the group company assignee. The
lease was drafted before the KS
