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Guarantor advise required please?
Leigh Moss
Posted: 08 April 2012 10:28:06(UTC)

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A friend of mine went as guarantor for her daughter when she wanted to rent a flat. Her daughter signed a six month rental agrement. Two years have now passed and her daughter has not been asked to sign another contract. During the period my friend has had to bail out her daughter twice as she failed to pay the rent. Now my friend has retired she can no longer afford to make another payment if her daughter defaults again. She asked the letting agent to be removed as guarantor but they said that as long as the property is rented to her daughter she is still respnsible. As the original contract was for 6 months only, is it true that my friend has to remain guarantor until her daughter moves out please?
Clive B
Posted: 08 April 2012 16:24:14(UTC)

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It's not what the letting agents says that matters, it's the contract your friend signed when acting as guarantor. The contract should state the term and any exit conditions.

Having rented property myself, I find it surprising the daughter has signed nothing beyond the initial contract as that would normally include a termination date (long since passed). If the daughter has signed nothing since, it's hard to understand what contract the letting agency is holding your friend to. But, as I said before, your friend should check the contract she signed.
Leigh Moss
Posted: 08 April 2012 16:40:58(UTC)

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Thanks for your advice. It's much appreciated.
Posted: 08 April 2012 17:02:55(UTC)

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A guarantor may agree to guarantee the rent for a fixed term tenancy, for example, a twelve month assured shorthold tenancy or in the case quoted a six month tenancy agreement. If the fixed term expires and the tenancy continues as a periodic tenancy, or a new fixed term tenancy is agreed without the involvement of the guarantor, the guarantor's responsibility will usually come to an end.

A periodic tenancy is an agreement for an indefinite period, until the landlord or tenant ends it. 'Periodic' refers to the rent period, or intervals at which the tenant pays her/his rent, for example, weekly or monthly. A periodic tenancy could be either a contractual tenancy, created by an agreement between the landlord and tenant, or a statutory tenancy, which arises when a fixed term ends such as the six months under the original tenancy. With a statutory tenancy the landlord must follow set procedures to make changes to the original tenancy agreement.

I hope you can follow the above. It is a bit technical.
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Leigh Moss on 08/04/2012(UTC), D G Stonebanks on 10/04/2012(UTC)
Prof Eman
Posted: 10 April 2012 17:54:19(UTC)

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I have recently come across the situation as follows.
A tenancy Agreement an Assured Shorthold tenancy for 6 months written in plain English.
It has the following statements in it.
The start date (when you can start living in the property is.... and this contract ends on XXX.
Within the agreement under the guarantor provisions it states-
The guarantee will stay in force for as long as the tenants continue to live in the property and until the tenancy has ended. 'Ended' here means either all the keys to the property are returned and the property is empty (you have not allowed anyone else to stay at the property) or the property is repossessed by county court bailiffs.
The six months, has now ended, the tenant continues in the property and the Landlord wishes to claim the rent arrears from the guarantor, and the costs associated with the repossession.
The guarantor disputes this, and has written to the Landlord in the following terms- We hereby give you notice that any obligation we might have as guarantor came to an end on XXX (contract end date as above), which is the same day as this assured short hold tenancy ends.
What is the legal position?
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D G Stonebanks on 10/04/2012(UTC), Leigh Moss on 10/04/2012(UTC)
Graham Walker
Posted: 11 April 2012 03:59:37(UTC)

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XXXX's reply to this is the 'de facto' position. Unless terminated the AST automatically rolls into the Periodic Tenancy mentioned. (Caution here as some agents will try and get a fee again at the end of the AST contractually agreed period which YOU DO NOT HAVE TO PAY) However the Periodic Tenancy is a continuation of the original agreement and as such doesn't release any guarantor from their financial obligation. The specific terms of this would have to be varied by a renegotiation of the terms of the lease if the tenant felt that they had proven 'ability to pay' and the landlord agrees and waives the guarantor obligation. We have just done this with a tenant that had CCJ's due to her ex-husbands endebtedness, she has been in the property two years, never missed a payment, we had to materially vary the lease to accommodate her daughter becoming 18 and waived the guarantor obligation voluntarily. We own and manage 13 rental properties and my wife runs a large rental property portfolio in London so we are confident of this opinion. Hope this helps
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Prof Eman on 11/04/2012(UTC)
Prof Eman
Posted: 11 April 2012 09:40:08(UTC)

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Thank you Graham Walker for your last contribution, it confirms what I have been told by some one previously.
Just to widen the discussion.
The tenant concerned i.e. who is in arrears was released from jail, and ended up back in jail, broke bail conditions, to serve the balance of his term, which was a mere few weeks.
The guarantor picked on a point in the Agreement, which states-
You do not have to pay rent for any period during which you cannot live in the property. We will work out the amount of rent which you do not have to pay for every day you cannot live in the property. This condition does not apply if :
a) you cannot live in the property because you or your guests or family did something (or failed to do something) which meant that our insurance policy for the property is no longer valid; and
b) we have given you notice of the conditions of that policy.
The guarantor has tried to argue that rent is not claimable because he could not live in the property, whilst in jail, and was exempt because of the above clause in the Agreement.
However my advice is that only the courts or the tenant can end the agreement, and as such it continued, and that the above clause covers events when the premises are not liveable in, and does not cover matters like temporary stays in jail, for which rent can be claimed through benefits in any case.
Can anyone comment and confirm?
Graham Walker
Posted: 11 April 2012 10:05:32(UTC)

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Hi Prof Eman,

I am not sure of the sum in question do you mind disclosing it? However, my advice would be, unless it is a lot of money (say £1000+) forget it and move on!

It never ceases to a)amaze us what a mess other peoples lives are, b) what a mess they can make one's own life, and c) that any type of litigation or action against tenants is loaded in their favour....they generally have nothing so they have nothing to lose, they get legal aid you spend hours trying to litigate in person to mitigate costs or even if a CCJ is brought against them they don't pay and if the person has a criminal record well, what more can be said!

We have walked away from as much as £10k worth of damages and unpaid rent because it got too stressful. We are in the lucky position now to interview all our tenants, and don't take any we don't want, we only accept a minimum of two months deposit on the basis if they can't find it now how could they if they became unable to pay the rent if they hit a bump, and one months deposit doesn't go that far in respect of damage or neglect.

There argument is an interesting one and it (again) never ceases to amaze one what get thrown up. However, my feeling is that unless the property was, by reason of any action, or inaction, by yourself then the rent is due and payable, there is an AST in force and it is not an hotel.

In these circumstances a call or email to the charity Shelter might be worthwhile as they are very tenant biased but could well have a view on this.
Prof Eman
Posted: 11 April 2012 10:53:17(UTC)

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Hi Graham Walker
Thank you for such a prompt reply.
The sum involved with costs is likely to be over £2,000(two thousand), which I intend to claim from the guarantor.
The Guarantor happens to be a Probation Charity run by a Local Probation Service, which in turn comes under The Ministry of Justice, no less. I have been dealing with the local Probation Office Manager.
When problems arose they tried to walk away from the Agreement, on the basis that the limit of their responsibility was the one months deposit and one months rent that they paid up front. I pointed out that they had signed as guarantors, whereupon, they have tried different tricks to get out of their responsibilities. The latest is that I have been doing nothing about repossession, which is completely untrue, as who wants an empty property!
They also doctored the Section 21 notice, which made it invalid, delaying matters, and now have the cheek to accuse me of delaying repossession.
Their excuse is that they are handling public's money.
Can I warn all you Landlords out there to take great care when dealing with any part of the Probation Service, unless you want the sort of problem I am dealing with.
Prof Eman
Posted: 13 April 2012 08:19:48(UTC)

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Any one else with a similar experience of dealing with the Probation Service or some other Government Department? and did you manage to resolve your problem?
Graham D-C
Posted: 13 April 2012 08:54:11(UTC)

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The best advise is NEVER act as a guarantor. Do not co-sign a purchase agreement with anyone who has a negative credit rating.
Amelia Brown
Posted: 06 February 2013 12:21:45(UTC)

Joined: 14/12/2012(UTC)
Posts: 12


Your guarantor should agree to pledge the rent for a fixed term rental. If the fixed term expires and the rental continues or a new tenancy term is agreed without the involvement of the guarantor, than definitely the guarantor's responsibility will come to an end. A periodic rental could be either a contractual which arises when a fixed term ends such as the six months under the original rental term.
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