Retailers and casual dining operators in the UK are now being confronted with debt arising in units they divested some time ago. To consent to an assignment, landlords will typically require an AGA, or "Authorised Guarantee Agreement", from the outgoing tenant. This instrument places an obligation on it to guarantee the performance of the new tenant under the lease.
Given the liability, many landlords are reluctant to agree to provide an AGA on assignment. We explore the key considerations for both landlords and tenants.
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