When Is An Authorised Guarantee Agreement Required

Most AGMs provide that a guarantor`s liability arises automatically if there is liability under the lease and no formal claim from the landlord is required. However, section 17 of the Landlord and Tenant (Covenants) Act 1995 provides that, under an AGM, the guarantor is not liable for rent, service charges or other “fixed costs” that the assignor has not paid, unless the landlord assigns the guarantor within six months of the respective due date following the non-payment of the assignment. This is called the “section 17 notice.” .