Assured Guarantee Agreements

[LIVERPOOL]

In 2007 we allowed our tenant to re-assign a 15 year commercial lease with 13 years to run. An integral part of the lease was an AGA and the lease also contained a clause stating if the AGA was not returned to the landlord the re-assignment would be void.
Earlier this year the new tenant absconded and we sought future rent from the original tenant.
His solicitor wrote to us claiming his client is not liable because he did not sign the AGA and we cannot rely on the clause since we had accepted rental payments and therefore a landlord/tenant relationship has been created.
It transpires our solicitor sent out an AGA but when it was not returned wrote to us (not received) asking if he should pursue it. As he received no reply he did nothing.
I feel our solicitor has been negligent not following up this matter and has cost us a significant sum. I am also unsure that the clause regarding the return of the AGA can be so easily dismissed as it must have some significance to be part of the lease.
I would be grateful for any advice on this matter

 

[kulture]

I would go back to your solicitor and ask him to sort this out FOC.

I would also start looking for a new tenant to minimise your losses.

 

[jules12345]

In 2007 we allowed our tenant to re-assign a 15 year commercial lease with 13 years to run. An integral part of the lease was an AGA and the lease also contained a clause stating if the AGA was not returned to the landlord the re-assignment would be void.
Earlier this year the new tenant absconded and we sought future rent from the original tenant.
His solicitor wrote to us claiming his client is not liable because he did not sign the AGA and we cannot rely on the clause since we had accepted rental payments and therefore a landlord/tenant relationship has been created.
It transpires our solicitor sent out an AGA but when it was not returned wrote to us (not received) asking if he should pursue it. As he received no reply he did nothing.
I feel our solicitor has been negligent not following up this matter and has cost us a significant sum. I am also unsure that the clause regarding the return of the AGA can be so easily dismissed as it must have some significance to be part of the lease.
I would be grateful for any advice on this matter

Your solicitor says he didnt receive the AGA and asked you for further instructions which were not forthcoming, no liability here. You say he should have kept asking you, why ?

The original tenant did not fulfill the terms of the lease but the new tenants paid you for a certain amount of time and it didnt bother you.

A new tenancy was set up in you receiving and ACCEPTING the rent albeit a periodic tenancy.

You granted permission to him to re-assign but only with an AGA - no AGA = re-assignment permission voided. So why why did you accept rent and for how long...?

Regards
Jules

 

[LIVERPOOL]

Your solicitor says he didnt receive the AGA and asked you for further instructions which were not forthcoming, no liability here. You say he should have kept asking you, why ?

The original tenant did not fulfill the terms of the lease but the new tenants paid you for a certain amount of time and it didnt bother you.

A new tenancy was set up in you receiving and ACCEPTING the rent albeit a periodic tenancy.

You granted permission to him to re-assign but only with an AGA - no AGA = re-assignment permission voided. So why why did you accept rent and for how long...?

Regards
Jules

Our solicitor issued the AGA and did not receive it, however whilst he says he wrote to us that letter was not received and therefore we were ignorant to the fact it had not been received. Would it not be reasonable for him to follow this up in the same way he would if he required documentation from us or indeed his account settling.
We accepted rent because we had no reason to believe the re-assignment had not been completed correctly, i repeat that the AGA formed part of the condition for re-assignment and as he was being paid to complete this he surely has responsibility to ensure its full and correct completion.

 

[JohnKulasek]

Can I ask how the assignee took possession and started paying rent without the AGA being completed? As per the earlier post, consent for the assignment had a precondition of a completed AGA - so no AGA no assignment. The original tenant cannot just disclaim responsibility. Suggest getting your soilicitor to sort this out - if he cannot then you might need to employ another.

 

[jules12345]

a clause stating if the AGA was not returned to the landlord the re-assignment would be void.

You are the LL are you not..? And as such you never received the AGA and yet you accepted rent, having not received it. It is your responsibility to instruct your solicitor, who works for you, and will advise you solely about your legal options etc where there is a breach of law.

In accepting the rent without the AGA in YOUR hands, it is determinate to you accepting the new assignment. You should have followed the terms of the agreement and instructed your solicitor post haste. You can't say you werent aware as you hadn't received the AGA, which was the term in the lease, as you granted permission to assign.

I do believe that AGA is binding obviously, and in assigning without an AGA he is in breach and liable, but only in as much that the new tenant would not have been allowed into the premises. As soon as the tenant paid rent which you accepted a periodic tenancy was set up. I believe it is dependant on the time span that the new tenant paid you rent and which you accepted and for how long. If you hadn't accepted the new tenant in then of course you would have a very straight forward case for rent loss new locks etc if applicable.

In entrusting the matter to the solicitor the solicitor is bound to serve the best interests of his client. He would have had to have been entrusted with that case so to speak, or on your books if you like ie having been paid lets say a contractual sum to oversee your affairs for a period of time. You pay him to write you a contract it doesnt mean your paying him to oversee the running of that contract also, do you understand this. If you paid him an annual sum to guarantee the overseeing of any work you need doing, or to run your legal affairs that is different. Most solicitor contracts are one time deals and each matter is separate upon instruction. In writing you three letters it would cost more than one letter so in financial terms it might be argued that he has overseen your best interests. He does not have to do anything at all, in negligence terms, it would all depend on whether or not he was bound to any agreement.

In terms of the AGA - I would argue that you have received rent for a period of time and done nothing about the fact that no AGA was undertaken. I can only see fallibility in your handling of the situation to be honest, and I can only see legally if you were to be awarded anything it would only be in regards to the time span between the new tenant absconding and any new lease being arranged and new let and perhaps legal costs.

You can always make a complaint to the SRA etc etc, and there are lawyers that deal with negligent lawyers. It is there you would probably wish to prsue any line of enquiry.

If you are in London and are interestd in speaking to a pro sol that deals with Landlord and Tenant commercial litigation then email me and Ill give you his details. Otherwise as previous posts suggest go see a sol.

Regards
Jules

 

[LIVERPOOL]

You are the LL are you not..? And as such you never received the AGA and yet you accepted rent, having not received it. It is your responsibility to instruct your solicitor, who works for you, and will advise you solely about your legal options etc where there is a breach of law.

In accepting the rent without the AGA in YOUR hands, it is determinate to you accepting the new assignment. You should have followed the terms of the agreement and instructed your solicitor post haste. You can't say you werent aware as you hadn't received the AGA, which was the term in the lease, as you granted permission to assign.

I do believe that AGA is binding obviously, and in assigning without an AGA he is in breach and liable, but only in as much that the new tenant would not have been allowed into the premises. As soon as the tenant paid rent which you accepted a periodic tenancy was set up. I believe it is dependant on the time span that the new tenant paid you rent and which you accepted and for how long. If you hadn't accepted the new tenant in then of course you would have a very straight forward case for rent loss new locks etc if applicable.

In entrusting the matter to the solicitor the solicitor is bound to serve the best interests of his client. He would have had to have been entrusted with that case so to speak, or on your books if you like ie having been paid lets say a contractual sum to oversee your affairs for a period of time. You pay him to write you a contract it doesnt mean your paying him to oversee the running of that contract also, do you understand this. If you paid him an annual sum to guarantee the overseeing of any work you need doing, or to run your legal affairs that is different. Most solicitor contracts are one time deals and each matter is separate upon instruction. In writing you three letters it would cost more than one letter so in financial terms it might be argued that he has overseen your best interests. He does not have to do anything at all, in negligence terms, it would all depend on whether or not he was bound to any agreement.

In terms of the AGA - I would argue that you have received rent for a period of time and done nothing about the fact that no AGA was undertaken. I can only see fallibility in your handling of the situation to be honest, and I can only see legally if you were to be awarded anything it would only be in regards to the time span between the new tenant absconding and any new lease being arranged and new let and perhaps legal costs.

You can always make a complaint to the SRA etc etc, and there are lawyers that deal with negligent lawyers. It is there you would probably wish to prsue any line of enquiry.

If you are in London and are interestd in speaking to a pro sol that deals with Landlord and Tenant commercial litigation then email me and Ill give you his details. Otherwise as previous posts suggest go see a sol.

Regards
Jules

Thanks for the replies.
What i find difficult to accept without repeating myself is the AGA was issued by and therefore would have been returned to our solicitor. He would not have informed us of its return and just archived it. Since the License to Assign was conditional upon the completion of an AGA he surely should have nade more effort to communicate this to us.

 

[jules12345]

Then you must go forward and make a complaint and seek legal advice in regards to a negligence claim.

Regards
Jules