Security for performance - guarantees, AGAs and rent deposits

The attached document sets out key points where dealing with guarantees, AGAs and rent deposit arrangements, including:

Authorised Guarantee Agreements
What is an AGA?
Qualifying conditions.
Position on unlawful assignment.
The effect of disclaimer, common law, variations etc. on the AGA?

Contractual guarantees
The contrast between bank and ordinary guarantees?
Typical contractual guarantee provisions:

• The guarantee and indemnity
• The covenant to take a new lease
• Provisions to preserve liability
• Restrictions on actions against the principal
• Forfeiture on guarantor’s insolvency
• Guarantee substitution provisions
• Dealing with the release of guarantors

The effect of lease variations.
Variations effecting a surrender and re-grant? Friends Provident Life Office v. British Railways Board [1996] 1 All E.R. 336

Disclaimer:

• Effect on tenants and sureties
• Landlord’s options
• Effect on sub-tenants and mortgagees
• Vesting orders
• Requiring a new lease on disclaimer
• Requiring a new lease in other circumstances?

Length and extent of the guarantor's liability.
Holding over under the 1954 Act?
Continuing liability into the AGA?

Rent Deposits
How much?
What happens to the deposit?
Charging the deposit.
What liabilities are covered?
Duration of the arrangement?
Retaining the deposit after lease assignment.