The court considered whether the 1995 Act operated to prevent a guarantor of a lessee being required to provide a similar guarantor for an assignee. The tenant had created a sub-lease, and the lease required its guarantor to provide a similar guarantee for the sub-tenant. The defendant had given a guarantee and now objected to a claim under it.
Held: The guarantee was not binding. The Act contained extensive anti-avoidance provisions, and was intended to change fundamentally the continuing liability of tenants under leases. Section 25 did operate to bar the claimant’s action. Section 24 of the Act was meant to ensure that any obligations undertaken by a person as guarantor for a tenant should come to an end on the assignment of the lease, and any such guarantee was directed at frustrating the intention of the Act, and ‘ it is abundantly clear that Parliament intended a tenant to be able to give no guarantee other than an AGA.’
Newey J
[2010] EWHC 330 (Ch), [2010] Ch 426
Bailii
Landlord and Tenant (Covenants) Act 1995
England and Wales
Citing:
Cited – Wallis Fashion Group Ltd v CGU Life Insurance ChD 2001
Neuberger J said that the 1995 Act: ‘represents a sea change in the law relating to a tenant’s liability after he assigns the lease’. . .
Cited – London Diocesan Fund and others v Avonridge Property Company Ltd and Phithwa HL 1-Dec-2005
The defendant had taken on a lease of a parade of shops, and sub-let each shop for a full premium at a nominal rent. It sought to limit its own liability to pay the head rent by limiting the covenant in the sub-leases to pay the head rent to the . .
Cited by:
Cited – K/S Victoria Street v House of Fraser (Stores Management) Ltd and Others CA 27-Jul-2011
The agreement provided that the guarantors to the original lease should act also as guarantors on any assignment. The tenant challenged this provision saying that it contravened the requirements of section 25 of the 1995 Act. HoF contended that such . .
Lists of cited by and citing cases may be incomplete.
Landlord and Tenant
Updated: 01 November 2021; Ref: scu.401797
