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F E Smith
F E Smith, Solicitor
Category: UK Property Law
Satisfied Customers: 9032
Experience:  30 years General Practice. All aspects of Property Law
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I am selling my pub (lease) and have been told i will still

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I am selling my pub (lease) and have been told i will still be responsible for the lease if things go wrong for the new buyer? is this true?
Submitted: 7 years ago.
Category: UK Property Law
Expert:  Tony Tax replied 7 years ago.
This isn't a tax question so I'm arranging for it to be transferred to the UK property law section.

Edited by Tony on 9/19/2009 at 2:46 PM EST
Customer: replied 7 years ago.

cant see my answer ?

 

Expert:  F E Smith replied 7 years ago.

Good afternoon Jolly

 

I'm afraid that this is correct.

 

Your liability will depend on whether the lease is a "new lease" (one granted after 1 January 1996") or an "old lease" (one granted before 1 January 1996).

If you assign a new lease, you should ensure that your solicitors include a condition of that the tenant enters into an "Authorised Guarantee Agreement" (an AGA). This is effectively a guarantee to the Landlord that the new tenant will pay the rent and perform the covenants in the lease for the remainder of the term and a promise that if it does not

do so, the old tenant will. A properly drafted AGA will limit this guarantee to the period of the new tenant's occupation. Should the new tenant assign the lease to a third party then the your liability comes to an end. If the new tenant does not pay its rent, the landlord can make a claim against you under the AGA.

The original tenant of an old lease is liable to pay the rent and perform all the covenants in the lease for the entirety of the term and, in some cases, any extension to that term.

That is the simple answer and your solicitors will explain it more fully if you require it.

I hope that this answers your question. If so, I would ask you, please to click 'Accept' so that I can be paid. If you require clarification, please don't hesitate to ask.

 

Best wishes.

 

F E

F E Smith, Solicitor
Category: UK Property Law
Satisfied Customers: 9032
Experience: 30 years General Practice. All aspects of Property Law
F E Smith and other UK Property Law Specialists are ready to help you

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