How do I stop being a guarantor?

G_M

hallowitch wrote: »

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

How does a Guarantor stop being a Guarantor?

.......
the guarantor can opt out of the deal by writing to the landlord to terminate the agreement.
.......

Highly suspect.
1) The text refers repeatedly to a 'Guarantor Agreement', whereas an 'agreement' is meaningless - it needs to be executed as a Deed. Any half-decent website would make this clear.
2) it describes the agreement as a 'contract'. A contract requires Consideration, but with a guarantee there is no payment and no Consideration - hence the need for it to be a Deed!
3) It says " It is also recommended to get a signature from a witness". Bad advice. It is essential to get a signature from a witness.

I would not trust the information in this website as far as I could throw a print-out of the page!

As for the statement that "This is perfectly legal and has been tested in court." I will happily believe this when I am shown reference to/details of the court case AND whether it was an isolated lower court hearing (not binding on other courts) or a Court of Appeal hearing which IS binding on other courts.

roger196

G_M wrote: »

Highly suspect.
1) , but with a guarantee there is no payment and no Consideration - hence the need for it to be a Deed!
.
or a Court of Appeal hearing which IS binding on other courts.

Why do you think that agreeing to lease the property is not consideration? Would the payment of two peppercorns be sufficient?

Why do you think that a High Court decision is not binding on lower courts or tribunals?

property.advert

A landlord is unlikely to agree to release a guarantor but after a period of time, there must be an assumption that the tenant has gained some trust. However, the landlord cannot truly know whether the tenant has had their rent paid by the guarantor simply to avoid the landlord calling that guarantee in and once released and no longer liable, that the tenant would simply refuse to pay, leaving the landlord out of pocket.

Thus, whatever the situation, I cannot see the landlord allowing the tenant to remain with a guarantor.

BobQ

Perhaps a more pragmatic step would be to write to the landlord and try to terminate the guarantor arrangement with reasonable notice, and suggesting that if he is not content that his tenant is now capable of paying the rent then he should consider terminating the tenancy. You might also make a comment suggesting that due to recent financial difficulties the LL may find it difficult to recover such costs from your wife.

As a landlord I would not agree to release you from the agreement based on such a letter but I would start thinking about getting another tenant and probably give notice to your step son.

G_M

roger196 wrote: »

Why do you think that agreeing to lease the property is not consideration? Would the payment of two peppercorns be sufficient?

Why do you think that a High Court decision is not binding on lower courts or tribunals?

The 'guarantor agreement' is between the landlord and the guarantor. The landlord is not leasing the property to the guarantor. And there is no rent or other payment changing hands between them either (until/unless the tenant defaults). Thus there is no Consideration. Thus no contract. Thus the need for a Deed.

There is, of course a separate contract - the tenancy or lease of the property, in return for which rent is due, but this contract is between the landlord and the tenant, NOT the guarantor.

Perhaps I missed something, but I saw no reference to a High Court judgement.

This is perfectly legal and has been tested in court.

Hence my comment that I'd like to know details of both the case AND the court in which it was heard.

In any event, High court decisions are not strictly binding on other High Courts, although there is a general practice by judges in the HC to follow previous rulings. This is in contracts to a Court of Appeal decision which IS binding on lower courts (including the HC etc) through precedent.

DVardysShadow

BobQ wrote: »

Perhaps a more pragmatic step would be to write to the landlord and try to terminate the guarantor arrangement with reasonable notice, and suggesting that if he is not content that his tenant is now capable of paying the rent then he should consider terminating the tenancy. You might also make a comment suggesting that due to recent financial difficulties the LL may find it difficult to recover such costs from your wife.

As a landlord I would not agree to release you from the agreement based on such a letter but I would start thinking about getting another tenant and probably give notice to your step son.

• I agree with giving notice of termination of the guarantee. It does offer a potential defence if the Landlord goes to court - particularly if the LL has let things run without giving notice
• I disagree with going so far as to suggest to the LL that he should evict. As a LL he should know how to manage his own business.
• After a certain period, it will be clear whether the tenant is paying his way. If he i, the LL probably has a better risk with this tenant than with someone unknown, even with a guarantor.

roger196

G_M wrote: »

The 'guarantor agreement' is between the landlord and the guarantor. The landlord is not leasing the property to the guarantor. And there is no rent or other payment changing hands between them either (until/unless the tenant defaults). Thus there is no Consideration. Thus no contract. Thus the need for a Deed.

There is, of course a separate contract - the tenancy or lease of the property, in return for which rent is due, but this contract is between the landlord and the tenant, NOT the guarantor.

Perhaps I missed something, but I saw no reference to a High Court judgement. Hence my comment that I'd like to know details of both the case AND the court in which it was heard.

In any event, High court decisions are not strictly binding on other High Courts, although there is a general practice by judges in the HC to follow previous rulings. This is in contracts to a Court of Appeal decision which IS binding on lower courts (including the HC etc) through precedent.

You do not appear to have answered my question as to whether the payment of two peppercorns between the LL and the guarantor would constitute consideration ( and hence a contract).

You do not appear to have answered my question as to whether the decisions of the high court are binding on a lower level court eg for small claims or for a tribunal.

G_M

roger196 wrote: »

You do not appear to have answered my question as to whether the payment of two peppercorns between the LL and the guarantor would constitute consideration ( and hence a contract).

You do not appear to have answered my question as to whether the decisions of the high court are binding on a lower level court eg for small claims or for a tribunal.

The OP has given no indication that such a peppercorn was paid - and it seems highly unlikely.

You have not indicated whether the High Court was involved in whatever case the websit referred to. My questions remain:
What case?
What court?

roger196

You do not appear to have answered my question as to whether the payment of two peppercorns between the LL and the guarantor would constitute consideration ( and hence a contract).

The above is a general question not specific to the facts as set out by the OP.

I was surprised by your statement
"This is in contracts to a Court of Appeal decision which IS binding on lower courts (including the HC etc) through precedent"
Hence my second general question

You do not appear to have answered my question as to whether the decisions of the high court are binding on a lower level court eg for small claims or for a tribunal.

Like you I would like to know the names of the parties, year, level of court, jurisdiction and reference for the case mentioned by hallowitch.

theartfullodger

roger196 wrote: »

You do not appear to have answered my question as to whether the payment of two peppercorns between the LL and the guarantor would constitute consideration ( and hence a contract).

.............

...........

A payment by LL to G in return for what contractual consideration?? or, if not that then...

A payment by G to LL in return for what contractual consideration??

We all know there is no payment between LL & G (either way..) given when signing a guarantee, either as agreement (probably not enforceable) or deed (probably enforceable..). Correction: If you know of such payments could you kindly reference the cases please??


Can anyone comment, if the requirement for a written document derived from the "Statute of Frauds" 1677 or was I incorrectly informed...???
http://www.legislation.gov.uk/aep/Cha2/29/3/section/IV

& need for wtinessing deed LPA 1925??