Can I remove myself as guarantor?

jmc160

Hey all, I'm wondering if someone can help answer this for me..

18 months ago I signed up as guarantor for my sister so she could move into her own place. Now, my wife and I have been through our finances and had some long discussions and we've come to the conclusion that unfortunately, we can no longer afford to do this as it's too much of a risk to our livelyhood, should somethig happen and DS is not able to pay the rent for any reason.

I've spoken to the letting agency about this and explained to them that we couldn't do this, and could they tell me what we need to do to remove ourselves from this. The woman I spoke to said to email them to confirm and that would be it.

Then no more than two minutes later she called me back and told me that actually I was not entitled to remove myself, and the only way I could not be guarantor is if she re-applied by herself and was successful (unlikely due to credit history) or moved out.

Now... when we signed up to this, we made it clear to the letting agency that we only wanted to do this for the initial six months of the tenancy, and they said that would be fine (which they're now denying), and we never received any notification of renewal or anything (they renew every six months apparently).

Is what they said correct? Are we really tied in indefinitely unless the above happens?

Do I have any rights here, or do I have to give my sister a cr*ppy ultimatum?

TIA, any advice or replies appreciated

atush

If you were told 6 months, and you have it in writing you have a case. If you wree told, but didn't get it in writing, then you are stuck.

You could of course ask your Sis to re apply, or to give notice and move out and get somewhere else on her own.

but if you weren't prepared to actually be a Guarantor, I can't see why you signed in the first place really.

jmc160

atush wrote: »

If you were told 6 months, and you have it in writing you have a case. If you wree told, but didn't get it in writing, then you are stuck.

You could of course ask your Sis to re apply, or to give notice and move out and get somewhere else on her own.

but if you weren't prepared to actually be a Guarantor, I can't see why you signed in the first place really.

18 months ago when she moved in, I was prepared to be guarantor. Now, our circumstances and finances have changed and we just can't do it anymore, as if something were to happen we can no longer afford to cover the rent for her.

Annisele

What did you actually sign when you agreed to be guarantor? It's something that letting agencies often get wrong, so it's possible that it was never actually binding in the first place and you're not exposed to as much risk as you think you are.

NOT_General_lee_shaff_ted

If after the initial 6 Month AST, the letting agent has sent out a new agreement for a new 6 Month AST Without sending you as guarantor a request for renewal of guarantee. then your obligation is spent. A new contract is in place.
However if it immediately rolled into a periodic tenancy after the AST then I admit I do not know the answer. Have you asked your sister if she has renewed the tenancy?

DVardysShadow

NOT_General_lee_shaff_ted wrote: »

If after the initial 6 Month AST, the letting agent has sent out a new agreement for a new 6 Month AST Without sending you as guarantor a request for renewal of guarantee. then your obligation is spent. A new contract is in place.

However if it immediately rolled into a periodic tenancy after the AST then I admit I do not know the answer. Have you asked your sister if she has renewed the tenancy?

I think the first para is a good point, although the actual wording of the guarantee amy undermine it.

Once rolled onto a periodic tenancy, it is a bit more difficult. It is often argued here that if the guarantee was not executed as a deed, it is invalid. However, as guarantor, you may find yourself trying to argue that in court - and not necessarily on the small claims track.

I think the first thing to do is to check whether the guarantee is limited to the one contract. If it is, then discuss with the sister and see if the sister will initiate a new contract.

If, for whatever reason, this approach does not yield the end of the guarantee, basically you are probably off the roadmap. I would suggest writing to the Agent and the Landlord in formal terms, keeping copies and establishing proof of posting. They should be told that the guarantee will no longer be upheld and that they should choose either to accept that the guarantee is ended or issue a section 21 notice to the sister commencing within 8 weeks and follow through to eviction wit any delay being at the Landlord's risk..

8 weeks is to allow some time for the Landlord and Agent to process the letter and take advice, plus whatever time to the first date a section 21 notice can be effective.

This still leaves OP potentially liable to pay rent to the point of eviction and uncharted territory over whether such notice would be upheld by a court as bringing a guarantee to an end. But in the absence of a laid down procedure, my guess is that a court would uphold a notice in this form.

jmc160

Annisele wrote: »

What did you actually sign when you agreed to be guarantor? It's something that letting agencies often get wrong, so it's possible that it was never actually binding in the first place and you're not exposed to as much risk as you think you are.

We filled in a guarantor application of some sort, I can't remember the details of it entirely but I know I have it all on record somewhere. I just need to find it.

I've had a look at our copy of the rental agreement tonight and it states that it's a fixed term tenancy of six months for a period of specific dates. But then further on in the definitions section, it says the "Term" includes any extension or continuation of any statutory periodic tenancy which may arise following the end of the period of the term.

We've never received any notification of renewal or any other forms to fill in or sign.

G_M

It is impossible to answer your question without knowing what you signed.

You need to find the Guarantee and see what it says! Or remember (I assume you read it before signing.......?).

However most guarantees cover the intial Fixed Term (6 months or whatever) AND any subsequent continuation of the tenancy (ie if as often happens the tenancy then continues on a monthly periodic basis).

Bear in mind that the whole point of the guarantee is give the landlord some security in a situation where a tenant is a high risk (poor credit history, CCJs, low income etc). Without the guarantee, the landlord would (probobly) have refused to grant the tenant a contract. If you, as guarantor, could just walk away from the undertaking you made, then it would be a pretty pointless piece of paper (and landlords would never bother with guarantors).

Other possible factors as have been mentioned:
* was it executed as a 'Deed' and witnessed? If not it may be invalid - though as said that would be for a judge to decide
* did the tenant sign a new Fixed Term after the 1st 6 months? That could invalidate the guarantee agreement

But really the starting point is to read the bl**dy thing!

decsdad

have you ever had to pay out to help your sister with the rent ?

jmc160

decsdad wrote: »

have you ever had to pay out to help your sister with the rent ?

No, but she has a history of financial problems (hence the need for a guarantor in the first place). My wife and I now have other things to deal with and are cutting out any unnecessary worries or commitments, so unfortunately this is one of the ones that has to go.

BrettMorganxD

jmc160 wrote: »

No, but she has a history of financial problems (hence the need for a guarantor in the first place). My wife and I now have other things to deal with and are cutting out any unnecessary worries or commitments, so unfortunately this is one of the ones that has to go.

But how do you know for sure your sister is going to default on the rent? I am sure she wouldn't let her own brother down by forgetting to pay her rent