Guarantor sued by landlord - will he win?

RabbitMad

over on landlord zone some guys are arguing that most guarantees are defective as there can be no contract between the LL and Guarantor as there is no consideration, therefore the guarantee needs to be executed by way of a deed.

OP Get yourself over there and ask the same question. I have a feeling that you can probably tell the LL to go forth...

tbs624

poppysarah wrote: »

I think there is so much with the UK rental market that guarantors are only one part of the issues....

There should be proper low cost social housing and corrective measures for people unable to act in a proper way in society....

There are some people who will struggle to find accomodation and it is an appalling shame that councils don't have more property available to them.

Agree with you on these points.

poppysarah wrote: »

A larger than normal deposit is also an alternative to guarantors but landlords know that the ones who will abuse a property will do it to extreme.

The max deposit that a LL can take is 2x the monthy rent. The guarantor acts as a back up for the tenant failing to meet * any * of their obligations under the contract. So if you are letting at 400 quid a month, taking a deposit of 800 isn't going to be much help against a possible non-payment of rent plus poss damage of the property over a 6 month period.

The alternative is that a LL asks for 3 or 6 month's rent in advance - I personally don't like that option, not least because it leaves a T exposed to risk. Additionally, if the T needs a guarantor ergo they are not going to be in a financial position to pay a bigger deposit/advance rent.

poppysarah wrote: »

Guarantors are an amazing idea for landlords - but I think it's wrong. I know of one person who was asked to take their own property deeds in order to be guarantor.

A guarantor *should* generally be a home owner but that doesn't mean taking along your property deeds to show the LL. Some are clearly over-zealous - I also don't agree with LAs/LLs demanding sight of T's bank statements in addition to other checks.

poppysarah

Don't local councils run guarantee schemes - I'm sure some do.

But again you've got the problem of the people needing them often being in very poor financial circumstances who would be better off being offered permanent council low cost accomodation.

If they were brutally honest about guarantors they'd ask for a comulsory amount (annual rent sum perhaps) being held in a bank account. That'd spell out the risk properly for people.

dankes

tbs624 wrote: »

I am not sure from your original post, but were you acting as guarantor because this girl's HB was lower than the full rent payments , or just because she was an HB claimant?

I was guarantor because although the LA/LL accepted people on benefits, they wanted a guarantor as well. The problem with the HB - which was the full amount - was that it was paid on 17th of the month and her rent went out on 1st month and despite me suggesting to the Tenant and LA/LL back in Feb that they maybe move the dates to coincide they didn't.

tbs624 wrote: »

(I know you mentioned a £95 shortfall but it wasn't clear to me whether this was simply an amount she chose not to pay to the LL, despite having received the full rent costs via HB or whether her HB was £95 less than the rent and she needed to pay the difference )

I still don't know the answer to this as neither the LL/LA or Tenant told me despite me asking. I just know the April rent was £95 short, which is why he took me to court. Without informing me first.

tbs624 wrote: »

If the HB payments were made direct to her and she hasn't used them for the rent then you may want to consider letting the HB offices know.

Again, I could never find out the truth of this. The tenant said that the LL/LA wouldn't accept HB directly, and when I suggested she set up a DD having the HB paid directly to them, she said that they'd cancelled it. But then on the LL's court form he said that she'd had the HB paid directly to her but they hadn't received it.

tbs624 wrote: »

Someone else has mentioned that you could pursue her through the courts - obviously you would need her current address to do this and if she has no money the most you will achieve is probably a CCJ against her name and payment at a quid a week or not at all.

I know this would cost me a lot of time and money and I'll only do this if the court orders me to pay him any money for the damages. I've been told I can't get any other money off her.

Thanks for the reply, though.

dankes

poppysarah wrote: »

You could argue (not sure how successfully) that the minute they realised they would need to claim off you then should have informed you of the problem.

Not letting you know means you had no chance to resolve the problem to prevent further infringements.

Their failiure to let you know means they've deliberately done so as they intended to play the court card all the time.

It's pretty thin but worth telling the judge your side - that there's been no communication.

This wasn't such a thin argument as it turned out because the judge was pretty unimpressed that they'd not contacted me before going to court. Nor had they tried to get the money off the tenant and that they were claiming £150 per month late payment fees.

poppysarah wrote: »

Also never ever ever ever be guarantor again. I think the process is a disgusting attempt to deflect personal responsibility from people.

Like I said, didn't want to do it but didn't want to see them on the streets. Funnily enough, I'm over that character flaw now. Don't know and don't care where they are.

dankes

RabbitMad wrote: »

over on landlord zone some guys are arguing that most guarantees are defective as there can be no contract between the LL and Guarantor as there is no consideration, therefore the guarantee needs to be executed by way of a deed.

I don't understand what you mean.

RabbitMad wrote: »

OP Get yourself over there and ask the same question. I have a feeling that you can probably tell the LL to go forth...

Will they get nasty over there? I don't want to be savaged by LLs on the other board. I was only trying to help someone out and I got royally screwed for it.

dankes

tbs624 wrote: »

:rolleyes: The problem lies not with the process of using a guarantor, but with people signing up to act as guarantor without fully understanding what it is that they are agreeing to. In the grown-up world all financial transactions that incur a higher than usual risk have to be underwritten by someone.

The tenant still has a personal responsibility to settle their debt, by repaying their guarantor.

Without the use of guarantors many people would not be able to rent a home, get a mortgage (whether commercial or residential), or take out many other forms of loan.

Anyone who is asked to act as a guarantor should always go through the agreement and get proper independent legal advice before they sign up. That bit also comes under the heading of personal responsibility.

I did understand what I was signing up for. The original contract had some ridiculous costs added - plus it had the entire six-month rent on it stating that was the amount to be paid monthly. I refused to sign it and the LA and T kept trying to tell me that it was a standard contract. When I still refused, it was rewritten 'just this one time'.

But, you're right, I should have got additional legal advice. I've been a tenant and I've been a LL and I've never had this problem before, which is why I didn't think I needed additional legal advice.

RabbitMad

no savaging for you, I lurk on LL zone a bit and they are very pro good tenant anti bad landlord, more of the threads are LL sided but they get lots of tenants too.

Basically for a contract to be upheld it needs to have "consideration" i.e. you get something in return for giving something. In the case of a rental guarantee they argue the guarantor gets nothing in return for the promise and hence the guarantee might be worthless.
I don't fully understand the reasoning myself but it soundsa convincing arguement.

Also worth asking but is the deposit for this property protected in a scheme? I can't see if this has been asked before but if it isn't you could encourage the tenant to go for 3x the deposit amount.

dankes

RabbitMad wrote: »

no savaging for you, I lurk on LL zone a bit and they are very pro good tenant anti bad landlord, more of the threads are LL sided but they get lots of tenants too.

Basically for a contract to be upheld it needs to have "consideration" i.e. you get something in return for giving something. In the case of a rental guarantee they argue the guarantor gets nothing in return for the promise and hence the guarantee might be worthless.
I don't fully understand the reasoning myself but it soundsa convincing arguement.

I see what you mean. OK, will try over there as well.

RabbitMad wrote: »

Also worth asking but is the deposit for this property protected in a scheme? I can't see if this has been asked before but if it isn't you could encourage the tenant to go for 3x the deposit amount.

I don't know if the deposit was protected, but on his court form the LL said he'd used it to pay the July rent. But I wasn't sure how that was possible if it was protected.

I'd love to ask her but since this whole thing blew up I've only managed to get her on the phone once and she was so rude it was incredible. Like I'd done something to her. I don't know where she is, either.

My brother told me yesterday, though, that she'd rung the LA asking when she'd get her deposit back. :rotfl: She's cost me thousands but wants her deposit back. As I'm due to have my baby any day now, I'm trying not to get stressed about stuff like this.

But thanks for replying.

poppysarah

dankes wrote: »

This wasn't such a thin argument as it turned out because the judge was pretty unimpressed that they'd not contacted me before going to court. Nor had they tried to get the money off the tenant and that they were claiming £150 per month late payment fees.

Like I said, didn't want to do it but didn't want to see them on the streets. Funnily enough, I'm over that character flaw now. Don't know and don't care where they are.

Yay!
Cool - now put your feet up now and relax!