Authorised Guarantee Agreements (AGAs) are a specific feature of commercial property leases in England and Wales, introduced by the Landlord and Tenant (Covenants) Act 1995. This legal framework reformed the way in which obligations are passed on when a commercial lease is assigned (transferred) from one tenant to another. Before the 1995 Act, the original tenant (assignor) who assigned their lease to a new tenant (assignee) could be indefinitely liable for the lease obligations if the new tenant failed to fulfil them. Nowadays, an outgoing tenant is only liable if there if there is an AGA.

Purpose of AGAs

The purpose of an AGA is to provide security for landlords when a commercial lease is assigned. It does this by requiring the outgoing tenant (assignor) to guarantee the performance of the lease obligations by the incoming tenant (assignee) to the landlord.

Effectively, the outgoing tenant (assignor) acts as a personal guarantor for the incoming tenant.

When is an AGA Used?

An AGA is used when a commercial lease is assigned (ie transferred).

Most modern commercial leases contain a clause which says that as a condition of giving consent to an assignment, the landlord requires the assignor tenant to enter into an AGA and therefore personally guarantee the liabilities under the lease of the incoming new tenant.

Key Features of AGAs

Key features of an AGA are as follows : -

- Guarantee:

The assignor gives a personal guarantee to the landlord that the new assignee tenant will pay rent and comply with the lease. The assignor will have to pay to make good any breach of the tenant of these obligations.

-New Lease :

An AGA will typically include an obligation on the assignor tenant to enter into a new lease in certain circumstances and if the landlord gave notice requiring it. These circumstances might include if the lease was forfeit by the landlord of if the assignee tenant became insolvent.

- Limited Liability:

The liability of the outgoing tenant under an AGA is limited to the period during which the assignee (the new tenant) holds the lease. If the lease is further assigned, the original tenant's liability under the AGA typically ends.

- Formalities:

For an AGA to be enforceable, it must be in writing and comply with the requirements set out in the legislation.

What are the Potential Liabilities under an AGA ?

If an outgoing tenant signs an AGA then the potential liability would including the following :

(1)   Assignee’s rent arrears;

(2)   Breach by the assignee of any other obligations under the lease including for property repairs;

(3)   Liability for landlord’s costs, losses and legal expenses etc;

(4)   In circumstances, an obligation to take back the property from the landlord under a new lease.

Considerations for Tenants and Landlords

- For Tenants:

Those looking to assign their lease need to be aware of the potential liability under an AGA. They should consider the financial stability and reliability of their assignee, as any failure on the part of the assignee to comply with the lease terms could result in liability for the assignor.

- For Landlords:

Landlords benefit from an additional layer of security through AGAs, as it ensures that there is always someone responsible for the lease obligations if the current tenant defaults. However, landlords must also ensure that any AGA is properly drafted to be enforceable and compliant with the 1995 Act.

Introduction

If you are selling shares in your company, there are several stages of the legal process where we will need your active involvement and input. This guide sets out what to expect and explains your role at each key stage of the transaction. While there is much that we will handle on your behalf, your cooperation and responsiveness are vital to keeping the deal on track and ensuring your interests are properly protected.

This guide focuses on the parts of the share sale process where we will ask for your direct help and attention. It is not a complete list of everything that takes place, but it highlights the most important steps where we will need your input to move the deal forward.

1. Legal Due Diligence: Answering the Buyer's Questions

Once our engagement is confirmed and our ID and anti-money laundering checks have been completed, the buyer’s solicitor will typically issue a legal due diligence questionnaire. This is a detailed document that contains many questions about your company’s legal, operational, and financial position.

What you need to do:

• We will send the questionnaire to you.
• Your responsibility is to work through the list of questions, typing your replies into the document.
• Where documents are requested (e.g. contracts, policies, certificates), you should provide clear scanned copies or identify where documents are unavailable.
• It is important that your replies are accurate, complete, and truthful, as the buyer is relying on this information in making their decision to proceed.

After this, the buyer’s solicitor may send follow-up enquiries. We will review these and forward them to you with suggested responses where appropriate, but we may need your help in providing clarification or supplying further documentation.

2. Reviewing the Draft Share Purchase Agreement

Once the due diligence stage is underway or completed, we will receive the first draft of the Share Purchase Agreement (SPA) from the buyer’s solicitor. This is the main legal contract for the sale of your shares.

What you need to do:

• We will prepare a written legal report highlighting the key terms of the SPA, identifying any concerns or unusual clauses, and pointing out anything we think you need to consider.
• Your role is to read the report carefully and review the SPA itself.
• You should come back to us with any questions, comments, or points you are unsure about.
• We will also highlight particular parts of the SPA that you should ask your accountant to review — for example, any tax covenants or provisions dealing with completion accounts or earn-outs.

3. Agreeing Amendments to the SPA

Once you have had a chance to review our comments and obtain any necessary accountancy advice, we will prepare a draft version of the SPA with proposed amendments and additions that reflect your comments and protect your position.

What you need to do:

• Review our suggested changes and let us know if you have any further comments or questions.
• Once you are happy with our proposed version, we will send it to the buyer’s solicitor and negotiate the final wording on your behalf.

4. The Disclosure Process

A key part of most share sales is the disclosure exercise. This runs alongside the negotiation of the SPA and focuses on matters that could otherwise give rise to a warranty claim by the buyer.

The warranties in the SPA are a series of statements about the company — for example, that it has no disputes, that all contracts are in place, and that all tax has been paid. If any of these statements are not true, you must make a formal disclosure of the relevant facts.

What you need to do:

• We will send you the warranties and ask for your input on any matters which require disclosure.
• We will also ask for your help in compiling supporting documents (called the disclosure bundle) to accompany the disclosures.
• It is very important that the disclosures are accurate, complete, and properly documented. This helps protect you from claims after the sale completes.

5. Taking Accountancy and Financial Advice

There are several points in the process where we will recommend that you take advice from your accountant. While we will deal with the legal side of the transaction, there are tax and financial consequences that fall outside our scope of advice.

What you need to do:

• Speak to your accountant about tax implications of the sale, including any entrepreneurs’ relief/business asset disposal relief, tax indemnities, or earn-out arrangements.
• Ask your accountant to review any financial provisions in the SPA that we identify as needing their input — such as the handling of accounts, tax warranties, or working capital adjustments.
• If we identify any other areas where professional accountancy advice is recommended, please make sure to act on this promptly.

6. Ancillary Documents

In addition to the SPA, there will be other legal documents that need to be signed and agreed to complete the share sale. These are often referred to as ancillary documents and may include:

• Stock transfer forms (to formally transfer the shares to the buyer)
• Director resignation letters (if you are stepping down from the board at completion)
• Board minutes (to approve the share transfer and resignations)
• Indemnities or other standalone agreements
• Resolutions of the company (as required under the company’s articles)

What you need to do:

• We will prepare or review these documents for you.
• You will need to review and sign them — we will explain what each document is for and ensure you are comfortable with their contents.
• We may need your help gathering certain company records or information needed to prepare these documents.

7. Signing the Documents

The final stage of the process is signing all the completion documents. In most cases, we will deal with this using electronic signature software.

What you need to do:

• You will receive an email with links to the documents requiring your signature.
• Your responsibility is to carefully check each document before signing, following any instructions we provide.
• We will let you know if there are any documents that must be signed as deeds (which may require a witness), or if there are any hard copy documents that need to be signed in person.

Once all documents are signed and the buyer has paid the purchase price, the deal will complete — we’ll confirm this to you and let you know if any post-completion steps are needed.

Your Ongoing Role in the Process

A smooth and efficient share sale relies not only on our legal work, but also on your prompt and full co-operation. This includes responding quickly to our requests, providing accurate and complete information, and sending through any necessary documents in a timely manner.

Delays in providing information or documentation can lead to hold-ups in the process, increased costs, or even loss of buyer confidence. To keep things moving and to help ensure the transaction proceeds without unnecessary stress or delay, we ask that you remain proactive and responsive throughout.

Final Note

The sale of your shares is a legal process that requires teamwork. We are here to guide and protect you through the transaction, but your cooperation — especially in relation to due diligence, disclosure, document review, ancillary documentation, and accountant input — is essential.

Please let us know if you have any questions about this guide or any stage of the process. We’re here to help.

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Introduction

If you own a commercial property in England, you have legal responsibilities under the Regulatory Reform (Fire Safety) Order 2005. This guide explains your duties as a commercial property owner or occupier, whether the property is let to tenants, used for your own business, or is vacant but intended for commercial use.

1. Who is the “Responsible Person”?

Under fire safety law, the “responsible person” is legally accountable for fire safety. This may include:

• The owner of the premises
• The landlord
• The tenant (particularly where the tenant has control of part or all of the premises)
• The employer (if the premises are used as a workplace)
• A managing agent or facilities manager who has day-to-day control

In multi-let or shared premises, there is often more than one responsible person. For example:

• The landlord may be responsible for shared/common areas (entrances, stairwells, fire alarm systems)
• The tenant may be responsible for fire safety within their own demised unit

In such cases, all responsible persons must coordinate and cooperate to ensure fire safety measures are effective throughout the premises.

2. Do the Fire Safety Rules Apply to Me?

✅ Yes – fire safety law applies to all non-domestic premises, including:

• Offices, shops, industrial units, and warehouses
• Restaurants, cafes, salons, and workshops
• Mixed-use buildings (commercial + residential parts)
• Common areas of multi-let commercial or residential buildings

There is no exemption based on property size, layout, or number of staff. Even if you have fewer than five employees, or the building is currently unoccupied, the regulations still apply.

3. Key Legal Obligations for Property Owners

🔍 3.1 Fire Risk Assessment

You must ensure a fire risk assessment is carried out and reviewed regularly.

• This identifies fire hazards and assesses the risk to people.
• You must implement suitable safety measures to reduce or eliminate risks.
• If the business has 5 or more employees, or if the Fire Authority requires it, the assessment must be in writing.
• Even if not legally required, written records are strongly recommended for all owners.

You can carry this out yourself if you feel competent to do so, or you can appoint a professional fire risk assessor.

🧯 3.2 Fire Safety Measures

You must ensure that appropriate fire safety measures are in place, including:

• Fire detection and alarm systems
• Fire extinguishers and fire blankets (where required)
• Emergency exits and escape routes (clearly marked and unobstructed)
• Emergency lighting
• Fire doors and compartmentation
• Fire safety signs

👥 3.3 Information and Cooperation with Tenants

• Provide clear information to tenants or occupiers about fire safety arrangements in shared areas.
• Coordinate with other occupiers to ensure fire safety across the whole building.
• In multi-let buildings, agree who is responsible for:
  • Maintaining shared fire alarm systems
  • Arranging regular fire risk assessments
  • Ensuring escape routes are accessible

This is often covered in the lease or a separate building management agreement.

🧪 3.4 Testing and Maintenance

Regularly check and maintain all fire safety systems, including:

• Alarm systems
• Emergency lighting
• Fire extinguishers
• Fire doors

Keep a record of inspections and servicing.

👨‍🏫 3.5 Training and Evacuation

If you employ staff, you must provide:

• Fire safety training
• Information about evacuation procedures
• Periodic fire drills

If you do not employ staff, ensure any occupiers, visitors, or contractors are aware of fire procedures.

4. Inspections and Enforcement

Your local Fire and Rescue Authority may carry out inspections to check compliance. If they find issues, they can:

• Give informal advice
• Issue an enforcement notice (requiring corrective action)
• Issue a prohibition notice (banning use of unsafe premises)
• Prosecute serious breaches, which may result in fines or imprisonment

5. Proof of Compliance

You must be able to produce documentation to demonstrate that:

• A fire risk assessment has been carried out
• Safety measures are in place and maintained
• You are complying with your duties under the Fire Safety Order

Insurers, lenders, or tenants may ask for written evidence of compliance.

6. Special Cases

• If the property is vacant, you still need to consider fire risks (e.g. arson, electrical faults).
• If you are developing or altering the property, fire safety must be built into the design and approved under Building Regulations.
• For buildings with residential elements, different rules may apply to the residential parts under the Fire Safety Act 2021.

7. Summary Checklist

Obligation	Required?
Carry out fire risk assessment	✅ Yes
Keep written record (if 5+ employees or requested)	✅ Yes
Install and maintain fire safety equipment	✅ Yes
Cooperate with tenants/occupiers	✅ Yes
Provide fire safety information	✅ Yes
Allow inspections by fire authority	✅ Yes

When selling a business, whether through an asset sale or share sale, it is important to identify any personal guarantees or indemnities you may have signed and to understand the risks of ongoing liabilities under supplier contracts and other agreements. Without taking the proper steps, you could remain personally or financially exposed even after the sale is completed.

This guide explains the key risks and the actions you should take to protect yourself.

1. Personal Guarantees and Indemnities: What Are They?

A personal guarantee is a legally binding commitment where you, as an individual, agree to be personally responsible for a company’s debt or obligations or in relation to your business.

An indemnity is a contractual promise to cover losses or damages incurred by another party, often used in situations involving financial obligations, supplier contracts, or leases.

You may have signed personal guarantees or indemnities during your time as a business owner or director for purposes such as:

• Bank loans, overdrafts, or credit facilities
• Commercial property leases
• Supplier contracts or trade credit arrangements
• Equipment finance agreements or hire-purchase contracts
• Utility contracts and service agreements

2. Why Are Personal Guarantees and Indemnities a Risk When Selling a Business?

Ongoing Liability After the Sale

Personal guarantees and indemnities do not automatically end when you sell the business or your shares in the company. This means that, unless you obtain a formal release, you could still be held personally liable for the company’s debts or obligations if the buyer or new owner defaults on payments.

Example Scenario:

You provided a personal guarantee for the company’s £20,000 bank loan. After selling the business, the buyer defaults on the loan. Because you signed the personal guarantee, the bank could pursue you personally for repayment, even though you no longer own the business.

3. Risks Associated with Asset Sales and Supplier Contracts

In an asset sale, you are selling specific business assets (e.g., equipment, contracts, intellectual property, goodwill) but the original company remains in existence. Unlike a share sale, where the company itself is sold, this structure can create risks related to supplier and service contracts.

Ongoing Liability Under Supplier Contracts

Unless supplier contracts are terminated, assigned, or novated to the buyer, the original company—and by extension, you—may remain liable for ongoing obligations under these agreements. This could expose you to:

• Claims for unpaid invoices or debts
• Penalties for breaches of contract after the sale
• Liability for product or service issues under pre-existing warranties 

4. Practical Advice to Manage These Risks

To protect yourself from ongoing liabilities under personal guarantees, indemnities, and contracts, we advise the following steps:

Step 1: Identify All Guarantees and Indemnities

• Review company records to identify any guarantees or indemnities you may have signed personally.
• Consider common areas such as bank loans, credit lines, supplier contracts, and property leases.
• If you are unsure whether a personal guarantee or indemnity exists, we advise you to make written enquiries to banks, suppliers, and landlords.

Step 2: Secure a Release from Personal Guarantees

• Contact the relevant lender, supplier, or landlord to request a formal release from the personal guarantee or indemnity.
• If a release is not possible, consider negotiating indemnities or guarantees from the buyer as part of the sale agreement to cover your risk.
• Ensure that any release or indemnity is properly documented in writing.

Step 3: Address Ongoing Supplier and Service Contracts

If you are selling the business through an asset sale, take the following steps to address contracts:

• Terminate contracts: If the buyer does not want to continue a particular contract, you should negotiate the termination of that contract with the supplier or service provider to avoid any ongoing liability.
• Assign or novate contracts: Where the buyer wishes to take over the contracts, you should arrange for either an assignment (where the buyer assumes the benefits of the contract but you may still remain liable for obligations) or a novation (where the buyer takes on full responsibility, and you are released from liability).
• Ensure that any assignment or novation is properly documented and signed by all relevant parties.

Step 4: Negotiate Indemnities from the Buyer

• Where it is not possible to secure a release or novation, consider negotiating a contractual indemnity from the buyer.
• This indemnity should state that the buyer will reimburse you for any claims or liabilities arising under personal guarantees, supplier contracts, or other obligations that remain in your name.

5. Understanding the Risks If You Do Not Act

If you do not act on this advice, you could face serious financial consequences, including:

• Being personally liable for outstanding debts under personal guarantees.
• Ongoing liability for obligations under supplier or service contracts, even if the buyer defaults.
• Legal action from lenders, suppliers, or landlords seeking to enforce guarantees or indemnities.

6. Checklist: Actions to Take Before Completion of the Sale

✅ Identify all personal guarantees and indemnities you have signed.

✅ Make written enquiries to banks, suppliers, landlords, and other organisations to confirm the existence of any guarantees.

✅ Seek formal releases from personal guarantees where possible.

✅ Negotiate assignment or novation of supplier contracts as part of the asset sale process.

✅ Secure indemnities from the buyer where releases or novations are not possible.

✅ Document all agreements related to releases, novations, or indemnities to protect yourself after the sale.

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This year marks the 100th anniversary of the Law of Property Act 1925 – a cornerstone of English law that continues to underpin the law of property in England and Wales to this day.  At our firm, we regularly deal with legal matters where this century-old legislation still plays a central role, from buying and selling commercial property to advising clients on leases, charges, and property rights.

The Origins of the Law of Property Act 1925

Before 1925, English property law had become complex, fragmented, and outdated. The system of land ownership was riddled with overlapping legal and equitable interests, many of which could only be discovered through detailed investigation and specialist knowledge.

The Law of Property Act 1925 was part of a broader package of reforms introduced in the 1920s to modernise and simplify land law in England and Wales. Together with other key Acts passed in the same period – such as the Land Registration Act 1925 and the Trustee Act 1925 – the Law of Property Act 1925 aimed to streamline the system, make conveyancing more efficient, and provide greater certainty for property owners, buyers, and lenders.

Key Features Still in Use Today

While some of its provisions have been amended or repealed over the years, many of the core principles of the Law of Property Act 1925 remain in force and are still applied on a daily basis in legal practice. Some of the key features include:

The creation of legal and equitable interests: The Act clarified that only certain property rights could be legal (such as leases of less than 3 years, mortgages, and easements), while others would be equitable.

The doctrine of overreaching: A vital concept in conveyancing, overreaching allows a buyer to take land free of certain equitable interests, provided the purchase money is paid to at least two trustees or a trust corporation.

Simplified transfer of land: The Act reduced the number of legal estates to just two – the freehold estate and leasehold estate – making it easier to understand and transfer ownership.

Statutory powers for mortgagees and landlords: The Act provides various default powers, such as the power of sale for mortgagees, and implied covenants and conditions for leases.

The right of survivorship in joint tenancies: The Act reaffirms the principle that legal title to property held as joint tenants passes automatically to the survivor on death, which remains a key consideration in both commercial and private property arrangements.

Why It Still Matters in 2025

A hundred years on, the Law of Property Act 1925 remains an essential part of the legal framework governing land and property in England and Wales. It is regularly cited in court decisions and forms the legal basis for many of the rights and responsibilities of property owners, developers, landlords, tenants, and lenders.

At our firm, we continue to rely on its provisions when:

Drafting and reviewing leases

Advising on rights of way or other easements

Registering transfers and charges with HM Land Registry

Handling complex property transactions involving trusts or multiple interests

Advising on enforcement options for mortgage lenders

Looking Ahead

Despite its age, the Law of Property Act 1925 remains remarkably relevant – a testament to the foresight of the legal reformers of the 1920s. While property law has evolved significantly over the past century, especially with the introduction of compulsory land registration, electronic conveyancing, and modern environmental and planning regulations, the Act still provides the foundations.