An Authorised Guarantee Agreement (AGA) is a legal document that can apply to a residential lease. It is an agreement that is signed by a former tenant of a leased property and refers to the responsibility of paying the rent if the current tenant fails to do so. In essence, it acts as a guarantor for the new tenant who is occupying the property.
An AGA is often required as a clause in a lease assignment, which is when a tenant transfers their lease to someone else. It is signed by the outgoing tenant and the landlord, effectively binding the outgoing tenant to the lease even though they are no longer living at the property. This means that if the new tenant fails to meet their financial obligations, such as paying rent, the landlord can pursue the outgoing tenant for any unpaid amounts.
For residential leases, an AGA is commonly used when a tenant decides to move out before the end of the lease term, but the landlord wants to keep the new tenant on a similar lease. In this situation, the outgoing tenant will need to sign an AGA to agree to be responsible for the new tenant`s rent payments.
Ultimately, an AGA is designed to provide the landlord with financial security and peace of mind. It ensures that they can recover rent payments if the new tenant defaults, without having to start the eviction process. It also gives the outgoing tenant a level of assurance that they will not be pursued by the landlord for any unpaid rent once they have moved out.
It’s important to note that a poorly written or incomplete AGA can result in disputes between the landlord, outgoing tenant and new tenant. Therefore, it`s essential to work with a legal professional to ensure that the document is comprehensive and clear.
In conclusion, an Authorised Guarantee Agreement is an important legal document for residential lease agreements. It helps landlords and tenants avoid disputes and provides financial security for all parties involved. If you`re a landlord or a tenant and are considering an assignment of a lease, make sure to consult with a legal professional to understand your rights and obligations.