How do I stop being a guarantor?

clutton_2 · 5 November 2011 at 6:03PM

i have to say i have respect for the way you have received some negative feedback about your behaviour... well done.....what age is your son ?

Piltdownman · 5 November 2011 at 6:04PM

Actually, he's not my son, he's my step-son. My wife signed the agreement!! You know the old mother-son thing?! Just glad our house is in my name only! Thanks to you all!

hallowitch · 5 November 2011 at 6:15PM

http://www.propertyinvestmentproject.co.uk/blog/tenant-guarantor-form/

How does a Guarantor stop being a Guarantor?

If the tenancy is for a fixed term (e.g 14th May 2007 – 14th May 2008), then the guarantee applies for the whole of the term and is not revocable during that term.

If the Tenancy Agreement becomes periodic, then the guarantor will STILL be the guarantor. However, when the fixed term is over and becomes periodic, the guarantor can opt out of the deal by writing to the landlord to terminate the agreement.

This is perfectly legal and has been tested in court. The guarantor should give “reasonable” written notice that he/she no longer wishes to be bound by the terms of the deed of guarantee (beyond the fixed term).

A fixed term contract is when two dates are specific in the Tenancy Agreement, in which the tenant has rights to live in the property. The agreement becomes periodic when the agreement expires, but tenant and landlord have agreed to continue the tenancy without signing new contracts. In that case, the previous contract rolls over and becomes periodic.

Note, the guarantee will be automatically canceled if the tenant signs a new tenancy agreement with the tenant, or if the terms of the existing tenancy agreement are changed E.g. if the rent is increased. In this case the landlord will need the guarantor to sign a new guarantee form. The Guarantor can only be held responsible for the tenants liability under the terms of the tenancy agreement the tenant has seen and agreed to. If these terms are changed, they have to approve this before they can be held liable under it.

If the a Guarantor requests to terminate the Guarantor agreement and the landlord agrees, then that can be taken as a valid termination. If this happens, get this from the landlord in writing for clarity.
A Guarantor agreement is also terminated in the sad incidence of a death, either of the tenant or the guarantor.

DVardysShadow · 5 November 2011 at 6:28PM

hallowitch wrote: »

http://www.propertyinvestmentproject.co.uk/blog/tenant-guarantor-form/

How does a Guarantor stop being a Guarantor?

If the tenancy is for a fixed term (e.g 14th May 2007 – 14th May 2008), then the guarantee applies for the whole of the term and is not revocable during that term.

If the Tenancy Agreement becomes periodic, then the guarantor will STILL be the guarantor. However, when the fixed term is over and becomes periodic, the guarantor can opt out of the deal by writing to the landlord to terminate the agreement.

This is perfectly legal and has been tested in court. The guarantor should give “reasonable” written notice that he/she no longer wishes to be bound by the terms of the deed of guarantee (beyond the fixed term).

A fixed term contract is when two dates are specific in the Tenancy Agreement, in which the tenant has rights to live in the property. The agreement becomes periodic when the agreement expires, but tenant and landlord have agreed to continue the tenancy without signing new contracts. In that case, the previous contract rolls over and becomes periodic.

Note, the guarantee will be automatically canceled if the tenant signs a new tenancy agreement with the tenant, or if the terms of the existing tenancy agreement are changed E.g. if the rent is increased. In this case the landlord will need the guarantor to sign a new guarantee form. The Guarantor can only be held responsible for the tenants liability under the terms of the tenancy agreement the tenant has seen and agreed to. If these terms are changed, they have to approve this before they can be held liable under it.

If the a Guarantor requests to terminate the Guarantor agreement and the landlord agrees, then that can be taken as a valid termination. If this happens, get this from the landlord in writing for clarity.
A Guarantor agreement is also terminated in the sad incidence of a death, either of the tenant or the guarantor.

I am just a tad suspicious, there is an american spelling lurking in there.

But the thrust of it looks reasonable - I don't think that it is equitable that a guarantor is bound beyond a fixed term into an open ended commitment with no means of termination - I would actually expect a court would be minded to uphold notice to quit a guarantee provided to LL had ample time to protect his interests [ie outside the assured term and allowing time to serve notice to quit].

So I am interested to see that apparently a court has upheld this. More details are needed!

Piltdownman · 5 November 2011 at 6:30PM

Actually I found this on property investment project site:
How does a Guarantor stop being a Guarantor?

If the tenancy is for a fixed term (e.g 14th May 2007 – 14th May 2008), then the guarantee applies for the whole of the term and is not revocable during that term. If the Tenancy Agreement becomes periodic, then the guarantor will STILL be the guarantor. However, when the fixed term is over and becomes periodic, the guarantor can opt out of the deal by writing to the landlord to terminate the agreement. This is perfectly legal and has been tested in court. The guarantor should give “reasonable” written notice that he/she no longer wishes to be bound by the terms of the deed of guarantee (beyond the fixed term).
A fixed term contract is when two dates are specific in the Tenancy Agreement, in which the tenant has rights to live in the property. The agreement becomes periodic when the agreement expires, but tenant and landlord have agreed to continue the tenancy without signing new contracts. In that case, the previous contract rolls over and becomes periodic.
Note, the guarantee will be automatically canceled if the tenant signs a new tenancy agreement with the tenant, or if the terms of the existing tenancy agreement are changed E.g. if the rent is increased. In this case the landlord will need the guarantor to sign a new guarantee form. The Guarantor can only be held responsible for the tenants liability under the terms of the tenancy agreement the tenant has seen and agreed to. If these terms are changed, they have to approve this before they can be held liable under it.
If the a Guarantor requests to terminate the Guarantor agreement and the landlord agrees, then that can be taken as a valid termination. If this happens, get this from the landlord in writing for clarity.
A Guarantor agreement is also terminated in the sad incidence of a death, either of the tenant or the guarantor.

Which seems to mean that after the tenancy agreement lapses in a year's time I can give the LL notice of my intention to stop being guarantor which seems fair enough to me!
My wife feels very silly about this and is still apologising to me!! Thanks

Piltdownman · 5 November 2011 at 6:51PM

Thanks, he's 20

Hammyman · 5 November 2011 at 7:40PM

The simple solution is to stop being the guarantor. This would have the unfortunate side effect of the tenant being served notice so you'd probably have to put him up.

roger196 · 5 November 2011 at 7:51PM

You need to appreciate that if your wife terminates the guarantee the landlord is likely to evict her son. What will be the impact of this on their relationship? Has this been discussed with son? Is he likely to be able to pay the rent in future ie has he built up a satisfactory history of rental payments on time and in full.

Adequate notice ( say four months) needs to be given to the landlord of termination and wife will be liable for rent up to termination.

For these reasons, I always advise people giving guarantees to limit the time and the amount. Banks don't like this but they are the ones who see the account on a daily basis and can take remedial action before things spin totally out of control.

PasturesNew · 5 November 2011 at 7:59PM

At age 20 the LHA rate payable will be on the "shared" basis. To find out how much that is:

1] Go here and type in the postcode in the 2nd box: https://lha-direct.voa.gov.uk/search.aspx (ignore everything else on the page)
2] Press the orange SUBMIT button.
3] LHA rate he'd get is the one that appears for "Shared Accommodation Rate".

BigAunty · 5 November 2011 at 8:01PM

Piltdownman wrote: »

Thanks, he's 20

Hopefully your step son is in accommodation no dearer than his LHA rate? If not, you risk being caught out for repeated arrears until he finds good employment.

Just to let you know that, if he is single, without disabilities and dependents, then he will be entitled to a LHA rate equivalent to a room in a shared house which is usually substantially less than a 25 year old (soon to be 35 year old) can get.

For those that are older, they are eligible for a LHA rate in a 1 bedroom property.

LHA rates are based on the lowest third of local market rents (known as the 30th percentile, I think).

So they aren't usually very generous and tenants in properties more expensive than their LHA rates will struggle with the shortfall.

He's quite likely to be on £53.40 per week Job Seekers Allowance if he has not yet found work (possibly £67 if he has enough contributions) and it's very tight to live on, even in shared accommodation where bills are split, and virtually impossible in a self contained property.

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How do I stop being a guarantor?

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