Commercial Lease Authorised Guarantee Agreement

Although there was some confusion with regard to the terms of the licence to assign, the High Court decided that the guarantee in the co-operative Group case functioned as a sub-guarantee and that the guarantor was not exempt from liability. By law, an AGM is void if it attempts to impose on the outgoing tenant an additional liability than that contained in the rental agreement. As described above, depending on the wording of the lease agreement and the buyer`s financial capacity, the tenant may attempt to convince the landlord to waive the requirement for an AGM or impose a time limit on the outgoing tenant`s liability after the AGM. The law does not change the rules on subletting, but it did mean that the parties could enter into an agreement for any commercial lease, usually expressly in the lease agreement, that set out the circumstances in which consent to the assignment could be withheld or all the conditions under which consent could be granted. . . .

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