Julian Sidoli del Ceno considers the future of ongoing guarantees for landlords
The Landlord and Tenant (Covenants) Act 1995 (LT(C)A 1995) set out to limit a tenant’s liabilities to the landlord following assignation. Hitherto, a former tenant might find themselves liable for a subsequent tenant’s default even though they may have parted company from any interest in the property in question many years before and there may have been a number of subsequent assignations over which they themselves would have had no control or even knowledge. The concern over this unjust state of affairs stretches back many decades and was brought to the fore in the law commission’s report Landlord and Tenant Law: Privity of Contract and Estate (Law Com no 174 1988) which paved the way for the subsequent 1995 Act.
Baroness Hale, in a well-known statement said: “The mischief at which the commission’s recommendations were aimed was the continuation of a liability long after the parties had parted with their interests in the property to which it was related.” (Avonridge Property Co Ltd v Mashru [2005] UKHL 70, [2006]
