Property update — January 2014: landlord and tenant

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The Court of Appeal has agreed with the High Court that a surety was released from all liability because of a 1987 licence to alter, granted by a previous landlord.

Variations to a lease are usually obvious, so the landlord can readily spot the need to join in any current guarantors (including former tenants standing under an authorised guarantee agreement) where required to preserve the guarantee. However, granting a permission to the current tenant, which goes beyond the terms of the lease, can sometimes count as a variation. This may not be so obvious, but it can have the same dramatic consequences — namely the release of the guarantors.

A landlord’s safest course will usually, therefore, be to include any current guarantors as a party to the licence documentation. Alternatively, if it is lawful to do so in all of the circumstances, it might be better simply to refuse the tenant’s request…

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