An authorised guarantee agreement (AGA) is a legal contract that binds the outgoing tenant of a commercial or residential property to act as a guarantor for the incoming tenant. The purpose of an AGA is to ensure that the landlord is protected against any default on rent payments or other obligations by the new tenant.

In essence, the outgoing tenant is still held responsible for the lease terms and conditions even after they have vacated the premises. This means that if the new tenant fails to meet their obligations under the lease, the landlord has the right to pursue legal action against the outgoing tenant.

The rationale behind an AGA is quite simple – landlords want to ensure that they are not left with a defaulting tenant and no recourse to take action against them. An AGA gives landlords the peace of mind that they can recover any outstanding rent or other amounts owing, even if the incoming tenant fails to make payment.

From the perspective of the outgoing tenant, an AGA can be a burden as they remain liable for the lease even though they are no longer occupying the premises. However, it is important to understand that an AGA is a standard part of most commercial leases and is designed to protect both the landlord and the incoming tenant.

When considering entering into an AGA, it is crucial for all parties involved to understand their obligations, as well as the potential risks and consequences of defaulting on the lease agreement. This is where legal advice and a thorough understanding of the terms and conditions of the lease come into play.

In conclusion, an authorised guarantee agreement serves an important purpose in commercial leasing, protecting landlords and tenants alike. While it may seem like an unnecessary extra expense or burden for the outgoing tenant, it is a standard part of most commercial leases and should be carefully considered and understood before entering into any lease agreement.