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Guarantors: Still on the hook
In this current economic climate it is not surprising to find that more and more tenants are entering into liquidation and in many cases a landlord will find that the liquidator disclaims the lease leaving them with very little recourse.
At this point those landlords who have the benefit of a guarantor will look to enforce the guarantee but may ask themselves whether a disclaimer affects a guarantor or an authorised guarantee agreement. In short, no. The Court of Appeal has confirmed that a disclaimer by a liquidator will terminate the liabilities of the tenant but will not release anyone else; the landlord is therefore free to enforce any guarantee that it may have.
It should however be noted by those of you who have the benefit of authorised guarantee agreements, that the Court of Appeal has stated that if the agreement specifically states that the guarantor will also be released on any disclaimer, then this should be sufficient to release its liability.