Tenancy guarantor

M80

Hi to all,

I have signed as guarantor for two people close to me.

They have seperate flats in the same block.

One of them has become very unreliable, owes approx £1k and is likely to be more before this is finished with. The landlord is now demanding payment from me if the tenant doesn't pay. She can't find the money.

I signed into the AST agreements, it is clear and responsibilities are stated. But I have heard about 'deed of guarantee' and this isn't.

Am I still liable?

G_M

You signed a guarantor agreement so that if the tenant failed to pay rent or caused damage and didn't pay for it, you would take on the responsibility.

That seems to be what has happened. So how come you are surprised that you are now responsible, and seeking ways to avoid that responsibility? The landlord clearly had concerns about the tenant, and hence sought extra security in the form of your guarantee. Surely he is entitled to rely on that now that his doubts about the tenant have proved justified.

And signing TWO guarantor agreements seems rash. If the 2nd tenant does the same it will cost you dear.

M80

I thank you for your direct approach.

The tenant is the culprit here, the landlord and I stand to be the victims.

I do appreciate your view, but to clarify, am I legally liable?

As you rightly point out the cost could feasibly be very dear, maybe more than I am able to manage. As retired my revenue is limited. Before attempting to negotiate with the landlord it may be useful to know if I have any strenght to cause the landlord to be considerate.

The AST still has 3 months to run, the debt could escalate wildly.

PasturesNew

Yes, you are legally liable. That is the whole point and purpose of a guarantor.... they guarantee to the landlord that the person is of such reliable nature that should the unthinkable happen and the tenant should default, then the guarantor is more than happy and able to pick up the full tab until such time as the tenant and landlord part company.

Why is your friend not paying their rent? As money comes in, rent is the first thing that needs paying... even if all other possessions are repossessed it's essential to keep a roof over your head.

The AST has 3 months to run .... but if they stay on (without money/references they can't move out), then you will continue to be liable. Then, if they throw a hissy fit and trash the joint as they leave ... you will still be liable to pick up that tab too.

Fire_Fox

M80 wrote: »

I thank you for your direct approach.

The tenant is the culprit here, the landlord and I stand to be the victims.

I do appreciate your view, but to clarify, am I legally liable?

As you rightly point out the cost could feasibly be very dear, maybe more than I am able to manage. As retired my revenue is limited. Before attempting to negotiate with the landlord it may be useful to know if I have any strenght to cause the landlord to be considerate.

The AST still has 3 months to run, the debt could escalate wildly.

Why do you think the landlord stands to be a victim? You are liable if you signed as party to the AST or signed a separate guarantor agreement, on what grounds do you think you are not liable? It's not a case of the landlord being considerate, this is his livelihood. Why is the tenant unable to pay the rent at all - is she not either working or claiming LHA?

Your liability will not end when the fixed term ends, your liability will end when the tenancy ends - either the landlord serves the tenant with notice or the tenant serves the landlord with notice. If you are party to the AST itself then you can give notice to quit on behalf of you both at the end of fixed term.

G_M

Firefox makes a good point. Since you are specifically seeking legal limits to your liability, you need to do what you can to limit that (ongoing) liability. The best way is by ensuring that the tenancy ends in 3 months time. If nothing else happens, and the tenant stays, then the fixed term AST simply becomes a periodic AST.... and your liability continues.

To end the tenancy, there are 2, perhaps 3, options.
1) the tenant gives notice, or simply moves out at the end of the 6 month term (assuming it was 6 months). Seems unlikely.
2) the landlord gives the tenant notice via a S21 Notice served at least 2 months before the end of the fixed term. It MUST be done properly by the LL. Maybe you should discuss this option with the LL, though of course he may be happy for the tenancy to continue knowing that he can get you to pay the ongoing rent!
3) If you are named on the AST, you may be able to give the LL notice as if you were a tenant. This is uncertain and relies on the fact that in law, where there are joint tenants, if one of them gives notice it ends the tenancy for both of them. However it is debatable whether you are a joint tenant. it depends both on the precise wording on the AST, and the facts of the situation. Since you are not living there, and never have done, you may in law not be a tenant irrespective of what the AST says.

Time to speak to the LL, offer some payments to sweeten him, and hope he'll bring the tenancy to an end and thus limit your future liabilities.

best of luck (and fingers crossed with the other tenant!)

10s

Now I feel fear.

It would seem the only way to escape this is if the tenant agrees to leave, in 3 months.

The tenant used to pay me as she recieved HB and I paid to the landlord by cheque.
Because HB was too late for contracted payments the cheques where late also.

The landlord said to the tenant that she could pay direct to his bank account every 2 weeks as she recieved HB. I stopped collecting but the tenant never paid, the money has been spent elsewhere.

With the landlord arranging this with the tenant I assumed this was a variance to the contract thus releasing me.
The landlord says, he only suggested an option to reduce arrears, so no variance took place. Effectively he has said how the payment is made isn't for him to worry about, if she doesn't pay then I should.

The other tenant has been doing some works in her flat, the landlord doesn't know yet. But he recently reminded us that the tenant, and then I guess me, are responsible for the result of decorating. The tenant asked for permission, he said he can't stop her but won't give consent.
This is scary.

Do you think a solicitor can help me here?

benoit

Without sounding rude, may i ask what you thought your role as Guarantor to not one, but two tenants would entail? Were you fully aware of exactly what you were agreeing to?

10s

Well the landlord wasn't trying to disguise anything, and the contract says I sign to say I understand all. But in truth how many realise the risk of doing this, I thought I was doing a good thing for good people.

Surely this situation must have realistic limits or a guarantor signs his life away. Surley I can't owe all I have to this man (feasibly).

cabbage

I don't think seeing a solicitor will help as you signed voluntarily into the agreement as a guarantor.

Is there any mileage in getting the housing benefit paid direct to the landlord. This will limit future rental arrears. The problem here is that the tenant usually requests this and why should s/he when they are getting the money for the rent and spending it. If the rent is under the local housing allowance scheme a third party can sometimes ask for this if its clear the tenant has problems managing money

Fire_Fox

10s wrote: »

Now I feel fear.

It would seem the only way to escape this is if the tenant agrees to leave, in 3 months.

The tenant used to pay me as she recieved HB and I paid to the landlord by cheque.
Because HB was too late for contracted payments the cheques where late also.

The landlord said to the tenant that she could pay direct to his bank account every 2 weeks as she recieved HB. I stopped collecting but the tenant never paid, the money has been spent elsewhere.

With the landlord arranging this with the tenant I assumed this was a variance to the contract thus releasing me.
The landlord says, he only suggested an option to reduce arrears, so no variance took place. Effectively he has said how the payment is made isn't for him to worry about, if she doesn't pay then I should.

The other tenant has been doing some works in her flat, the landlord doesn't know yet. But he recently reminded us that the tenant, and then I guess me, are responsible for the result of decorating. The tenant asked for permission, he said he can't stop her but won't give consent.
This is scary.

Do you think a solicitor can help me here?

Why were you taking the money from the tenant and passing it to the landlord? This is putting you in a very akward position, potentially this can be deemed as income by the powers-that-be.

Why is the tenants LHA late? Once set up LHA is normally paid regularly, unless there is an investigation or the tenant is pulling the wool over your eyes. The landlord can apply to the council to have the rent paid directly to him where there are arrears, you laundering the money may not be doing you any favours.

Are you or are you not named on the AST? How well do you know these people and are they both on benefits with no assets?

10s wrote: »

Well the landlord wasn't trying to disguise anything, and the contract says I sign to say I understand all. But in truth how many realise the risk of doing this, I thought I was doing a good thing for good people.

Surely this situation must have realistic limits or a guarantor signs his life away.

The simply answer is it depends exactly what you have signed. If you are able to scan it in and post (remove personal information) then perhaps someone will be able to give you more specific advice. Your comment about slavery is bordering on offensive and it would be appreciated if you removed it, you had the opportunity to research what you were taking on.