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New court decision follows the Good Harvest line on lease guarantees
A guarantor of the assignor cannot validly guarantee the assignee, as a High Court case confirms the view taken by the judge in Good Harvest.
Key Points
- A guarantor of one tenant cannot validly give a guarantee for the obligations of a subsequent tenant.
- This applies even if assignor, assignee and guarantor are all in the same group and even if the guarantor is keen to give a fresh guarantee to facilitate consent to an assignment.
Some readers may remember our July eBulletin which reported that the case of Good Harvest Partnership v Centaur Services had settled before the landlord's appeal had been heard by the Court of Appeal. This meant that the High Court's decision in February stood.
Click here to read the full eBulletin.
15 November 2010
Author: Steven Pitchford, 15 November 2010
