The AGA full form in law is Authorized Guarantee Agreement. AGA is a formal document that is used, especially in the UK, when leasing commercial property. When a tenant transfers their lease to a new renter, referred to as the assignee, it becomes relevant. In accordance with the conditions of an AGA, the departing tenant warrants that the new tenant will carry out all of the lease’s requirements, including upkeep and rent payment.
Importance of AGA:
By guaranteeing that the landlord can still recoup damages from the original tenant in the event of assignee default, this kind of agreement safeguards the landlord. AGAs are especially crucial for long-term leases since there is a greater chance of tenant default. The Landlord and Tenant Act 1995 governs the use of AGAs, stipulating when and how they can be used, ensuring that they are reasonable and fair to all parties involved.
Important provisions of an AGA:
All of the assignee’s responsibilities under the lease, such as rent payment, maintenance, and other covenants, are normally guaranteed by the AGA. Typically, the AGA continues until the earlier of the first lease term comes to an end and with permission from the landlord, the assignee sub assigns the lease to a different tenant. In some situations, such as when the assignee becomes insolvent or bankrupt, the AGA may contain provisions for an early termination.
- The AGA full form in law is Additional Advocate General