If there are doubts about a tenant’s ability to pay rent, its landlord will often require a third party to guarantee the tenant’s liabilities. Before the introduction of Landlord and Tenant (Covenants) Act 1995 (the “1995 Act”), a tenant was liable to its landlord throughout the term of a lease for the defaults of any future tenants, who took an assignment of the lease. The on-going nature of this liability could be very burdensome when commercial leases typically ran for 25 years. There have been examples of hard cases in which a former tenant has had to discharge the arrears of an unknown tenant after many years and numerous assignments of the lease.
The 1995 Act greatly restricted the continuing liability of tenants and imposes a new rule that a tenant and any guarantor will be released from all future liabilities following the assignment of a lease entered into after 1 January 1996. The 1995 Act did however provide for a tenant to enter into an Authorised Guarantee Agreement (“AGA”) to guarantee the performance of an incoming tenant (but not any subsequent tenants). The 1995 Act contains anti-avoidance rules to ensure that tenants and guarantors are released from liability following the assignment of a lease.
If an outgoing tenant’s covenant is weak, a landlord will often call upon the current tenant’s guarantor to guarantee the liabilities of the incoming tenant. This practice was commonplace until 2010, when the High Court decided in the case of Good Harvest Partnership LLP v Centaur Services Ltd that this arrangement breached the anti-avoidance provisions of the 1995 Act. The Good Harvest case also called into question the practice of giving sub-guarantees, in which a guarantor guarantees the tenant’s obligations under an AGA and therefore assumes responsibility for the incoming tenant’s liabilities.
Fortunately, in April 2011, the Court of Appeal confirmed in the case of K/S Victoria Street v House of Fraser (Stores Management) Ltd that a guarantor can guarantee the liabilities of an outgoing tenant under an AGA but cannot guarantee the liabilities of an incoming tenant following the assignment of a lease. This decision is undoubtedly a pragmatic one which facilitates the assignment of unwanted leases but it does raise a new question.
In K/S Victoria Street, the Court of Appeal doubted whether a tenant could assign an unwanted lease to its guarantor. No particular reason was given but such an assignment would appear to be contrary to the workings of the 1995 Act because it preserves the guarantor’s liability to the landlord after an assignment. As landlords find new ways to secure income from their properties in difficult times, it seems certain that new cases will come before the courts as novel arrangements and schemes of assignment are tested. For the time being, the AGA saga rumbles on.
For more information on protecting rental incomes from commercial properties please contact Alex Haddad at Nockolds on ahaddad@nockolds.co.uk
Alex Haddad (profile) 
Wednesday 8th February 2012
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Week 5 - Commencing 30 January
This week made me question the whole concept of spring marathons and their popularity. Spring marathons mean winter training... The start of the week was cold but no change there, however the snow at the end of the week makes training pretty tough. Fortunately I have gym membership and can choose to train on a treadmill, although this is particularly tedious.
Once again this week my long run was scheduled for the Friday. I came down with a stinking cold in the middle of the week and felt very sorry for myself. There is a general rule of thumb for when a cold should stop you running which basically provides if your symptoms are above your neck (i.e. no aches and pains in the body) you should be safe to run. Having prayed to wake up with aches and pains Thursday night, I awoke Friday morning feeling pretty rough but no aches and pains! No excuse I had to do my long run. I had a lemsip, pulled on my new trainers and plenty of layers and set out for my scheduled 10 mile tempo run. Until now my long runs have been 'steady' runs. However this week my schedule dictated that it should be done at a tempo pace. Well I wasn't exactly feeling in a tempo mood but I thought I would see how I got on. After a steady mile 1 I actually felt OK and so picked up the pace a little. I did not have a set route in mind but instead was relying on my fancy running watch, which tells me the distance covered, my pace and the calories burned. I actually ended up covering 11 miles and took off nearly a minute per mile from my recent long run pace. It felt good, especially when I saw that mile 10 was in fact my quickest mile and how many calories I had burned... These were quickly replaced with a couple of toasted tea cakes when I got home! Maybe it was the thought of the tosted tea cakes that made me speed up at the end...
If you would like to sponsor me you can do so by visiting my justgiving page at:
http://www.justgiving.com/Sarah-Miles1
You can also donate using JustTextGiving. To do so send the following text code 'STES51' followed by the amount you wish to donate to 70070. For example, 'STES02 £10' to 70070.
Alternatively please feel free to contact me to sponsor me by any other means at smiles@nockolds.co.uk or on 01279 712584.
Sarah Miles (profile) 
Tuesday 7th February 2012
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Week 4 - Commencing 23 January
I have had a busy training week this week with only one rest day. Out of the six days I ran on 4 and did spinning on one day and swam on the other. Given the dark mornings and dark nights and the fact that there are only about 2 lamp posts in the village I live in, I am running some of my sessions on a treadmill in the gym. Whilst this brings with it shelter and warmth, it is also very boring. I therefore tend to do my interval sessions on the treadmill where I vary the speeds that I am running at. It is still pretty boring though...
For some reason whatever day of the week I choose do to my long run, you can guarantee this is the day that we have a very hard frost. Friday morning saw me heading out to clock up 10 miles whilst what felt like the rest of the school mums returned home to light the fire and have a cup of tea and a biscuit whilst watching Phillip and Holly. I am sure this wasn't really the case but it was the image I had in my head as I set out for my run in freezing temperatures! The first 2 miles of my run were effectively an ice skating rink. I spent the entire time trying to find the least slippery part of the road to run on. I could see the look of amusement on passing driver's faces as they drove past me whilst I did my best not to look like a clumsy over sized ballerina...
If you would like to sponsor me you can do so by visiting my justgiving page at:
http://www.justgiving.com/Sarah-Miles1
You can also donate using JustTextGiving. To do so send the following text code 'STES51' followed by the amount you wish to donate to 70070. For example, 'STES02 £10' to 70070.
Alternatively please feel free to contact me to sponsor me by any other means at smiles@nockolds.co.uk or on 01279 712584.
Sarah Miles (profile) Tuesday 31st January 2012
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Week 3 - Commencing 16 January
I am in full swing now and have somehow worked out how to squeeze in 5 training sessions into my week plus working, running a home and looking after 2 children! My training pattern is fairly standard and sees me doing an interval session, a tempo (fastish) run, a long run and the other 2 sessions usually involve another run and a spinning class or getting out on my bike or going for a swim. I am also doing some weights in the gym.
I had a big boost this week with two visits to St Elizabeth's. The first of which was truly humbling. The facilities are amazing and the care and support the residents and students are given is outstanding. The highlight was seeing a relation of mine, a 15 year old boy that is distantly related to my mum. This gave me a real boost. I had a second visit on Saturday with all the other marathon runners who are raising money for St Elizabeth's too. It was great to meet them and get some training and fundraising tips.
Back to the training... with renewed enthusiasm after my visit I set out for my long run on a very windy and damp morning. As I set out I hadn't really planned where I was going to run. Unfortunately my feet took me on a very hilly route with one hill in particular which is what I shall call challenging! The route is actually very pleasant and takes me round some beautiful countryside. With the rush of endorphins experienced when running it never fails to make me feel grateful for living in such a beautiful place... that is until I pass a field where someone has done the unthinkable. Fly tipping really gets my goat as it is completely unnecessary. Usually upon discovery rubbish that has been dumped on a farmer's land, my feelings of joy are quickly replaced with feelings of outrage. However on this particular occasion, my overwhelming feelings were not of outrage at the abhorrent behaviour but instead... I actually found myself wondering whether I could take a lay down on the dumped mattress in the field... it was halfway up the truly awful hill you see. I resisted and carried on plodding up the hill!
If you would like to sponsor me you can do so by visiting my justgiving page at:
http://www.justgiving.com/Sarah-Miles1
You can also donate using JustTextGiving. To do so send the following text code 'STES51' followed by the amount you wish to donate to 70070. For example, 'STES02 £10' to 70070.
Alternatively please feel free to contact me to sponsor me by any other means at smiles@nockolds.co.uk or on 01279 712584.
Sarah Miles (profile) Tuesday 24th January 2012
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Week 2 - Commencing 9 January
I upped my training this week which saw me fitting in 4 runs, a spinning class, some weights in the gym and a swim. Two of my running sessions were on a treadmill in the gym and therefore in the warmth and comfort of being indoors. The cold spell hit in the second half of the week as I had to take to the roads... The first of these was meant to be a 'tempo' (fast) 5 mile run. However given the state of the country lanes, I was unable to achieve a tempo speed and instead shuffled round watching every footstep I took in a bid to avoid falling over. The following day brought another hard frost but still saw me heading out for a chilly 10 mile run. As I came back into the village I saw one of my neighbours, wrapped up in what looked like ski wear heading to the pub, no doubt for a pint in front of the fire. He took one look at me and just shook his head. I guess he won't be joining me for one of my training runs!
If you would like to sponsor me you can do so by visiting my justgiving page at:
http://www.justgiving.com/Sarah-Miles1
You can also donate using JustTextGiving. To do so send the following text code 'STES51' followed by the amount you wish to donate to 70070. For example, 'STES02 £10' to 70070.
Alternatively please feel free to contact me to sponsor me by any other means at smiles@nockolds.co.uk or on 01279 712584.
Sarah Miles (profile) Tuesday 17th January 2012
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