New research shows that 85% of new leases include an authorised guarantee agreement (AGA).
The research, carried out jointly by McKenna, Estates Gazette and BPF, represents the first major research into the new privity of contract legislation which came into effect in January this year.
The Association of British Insurers promoted the idea of AGAs to compensate for the loss of privity of contract. An AGA requires tenants to guarantee that their assignees will honour all lease commitments.
However, the survey finds that there is still considerable confusion in the area of assignment clauses. McKenna is calling on tenant and landlord bodies to provide further guidance in order to develop greater standardisation of leases.
For full details of the report, see the professional pages of Estates Gazette on 12/10/96.
EGi News 10/10/96
