Recovery from Former Tenants and Guarantors: Section 17 Notices

Under the Landlord and Tenant (Covenants) Act 1995, landlords are potentially able to pursue former tenants or guarantors for fixed charges due under a lease – provided that they follow the strict rules set out in Section 17 Notices.

Below, we explain how Section 17 Notices work and how landlords can use them to recover arrears and/or fixed charges due under a lease.

What is a Section 17 Notice?

A Section 17 Notice is a formal statutory notice served by a landlord on a former tenant or their guarantor demanding payment of arrears and/or other fixed charges such as service charges that arose during their period of liability. The procedure applies to leases granted on or after 1 January 1996.

If served correctly, the notice allows landlords to recover unpaid rent, service charges, insurance contributions and other fixed monetary sums due under the lease.

The strict six‑month deadline

Section 17 Notices must be served within six months of the arrears becoming due. This deadline is absolute. If a landlord misses it, they lose the right to recover those arrears from former tenants or guarantors.

For this reason, landlords should keep accurate records and act promptly when arrears arise.

Former tenants and AGA guarantors

Under modern commercial leases, outgoing tenants often enter into an Authorised Guarantee Agreement (AGA) with the new tenant. This means they guarantee the incoming tenant’s performance of the lease.

If the current tenant defaults, landlords can serve a Section 17 Notice on the former tenant and their guarantor.

What must the notice contain?

A valid Section 17 Notice must be in writing, and must be set out in the prescribed statutory format.  The notice must detail the exact sums owed, contain the full names and addresses of the parties involved, and must provide sufficient details of the lease to which it relates. A clear breakdown of the fixed charges being claimed must be included together with any interest calculations. The notice should relate only to arrears within the former tenant’s period of liability and be served within the strict six‑month time limit.

If the notice is defective, the landlord could lose the right to recover the arrears.

The former tenant’s right to an overriding lease

If a former tenant or guarantor pays the arrears demanded, they can require the landlord to grant them an overriding lease. This gives them control of the premises and allows them to mitigate their losses by re‑letting the property.

Landlords should be aware of this consequence before serving a Section 17 Notice.

Why Section 17 matters

Section 17 Notices can be a powerful tool for landlords, especially when the current tenant is insolvent or has vacated the premises. However, the process is technical and time‑sensitive. Missing the deadline or serving an incorrect notice can permanently remove the landlord’s right to recover arrears.

If you’re a commercial landlord and believe arrears may be recoverable from a former tenant or guarantor, early advice is essential. Contact our Dispute Resolution Team now. Call us on 0330 221 8855 or email us at disputeresolution@attwaters.co.uk.