Deed of Guarantee - Help needed please!

Harriette

I signed a Deed of Guarantee for a 12 month contract for a friend. The the fixed term ran out in March and became periodic, so I wrote to the LL to terminate the agreement. I heard nothing back so assumed everything was fine.

A year down the line I have had a money claim online sent through the post. The LL is claiming I am responsible for 3 months rent as the tenant has not paid and has left the property.

I would like some advice please if anyone knows if I am still liable?

I have a copy of the RLA Deed of Guarantee dated 6th Feb 2010 but where the property address and tenants name should be, it is blank! Not sure if that makes it invalid?

G_M

Most guarantees are designed to continue until the tenancy ends. If a Periodic tenancy arises following the end of a fixed term agreement, then that is simply a continuation of the original tenancy. The same tenant is in occupation. The same rent is due. The same terms applies.

If you think about it, the reason for a guarantor is that the tenant, for some reason, is a high risk (financially). That does not suddenly change after 6 months (or 12 or whatever).

Writing to the LL makes no difference. There would be little point in a guarantee if the guarantor could simply write and withdraw when he wished!

Having said all that, you may have some hope:

* was the guarantee agreement Executed as a Deed?
* was it witnessed?
* Was a copy of the tenancy agreement to which it applied provided to you?

As for the omissions on the agreement, this is a matter the court would have to deal with; you could certainly argue that it is invalid, but the LL may argue that it was an administrative oversight and that it was clear (to you and him) what was being signed, and which tenancy was being guaranteed.

Who the court believes would depend on the full circumstances in which the document was executed.

Harriette

Thank you for the reply, much appreciated!

If the LL did not reply to my letter wishing to no longer be Guarantor, I would assume that meant he had no problem with it.

I do not have a copy of the tenancy, only the Deed which I also noticed has no rental amount or date on it.

It was witnessed, yes. It says it was delivered as a Deed by the Guarantor?

It does have a section that says it 'may be terminated by agreement Court Order by re-entry forfeiture notice or otherwise'

I am not quite sure what that means?

DVardysShadow

Harriette wrote: »

It does have a section that says it 'may be terminated by agreement Court Order by re-entry forfeiture notice or otherwise'

I am not quite sure what that means?

Never mind what it means, did you include all of the commas? This could make a difference.

Edit: Lesson for the future. Never sign anything again, unless you are sure you will not have to ask a bunch of strangers on the internet what it means later.

G_M

Harriette wrote: »

Thank you for the reply, much appreciated!

If the LL did not reply to my letter wishing to no longer be Guarantor, I would assume that meant he had no problem with it.I would assume either that the LL has not 'agreed' (see below); or that he did not receive your letter; or that he has ignored it, knowing it to be meaningless.

I do not have a copy of the tenancy, only the Deed which I also noticed has no rental amount or date on it. A court might set aside the Guarantee Agreement on the grounds that you were not provided with information describing what you were guaranteeing (ie the tenancy)

It was witnessed, yes. It says it was delivered as a Deed by the Guarantor? This appears to be in order - surprising as this is the most common mistake made by landlords!

It does have a section that says it 'may be terminated by agreement Court Order by re-entry forfeiture notice or otherwise'

I am not quite sure what that means?

'may be terminated by agreement, Court Order, by re-entry, forfeiture notice, or otherwise'

It means the guarantee can be ended either:
1) by agreement (was there an agreement with the LL to end it? - does not appear so);
2) or by re-entry (ie the LL taking back the property though this sounds more like an illegal eviction!)
3) by a court order (has a court ended either the tenancy or the guarantee? does not sound like it
4) forfeiture notice - no idea what this means
5) otherwise - errr... some other way of ending the agreement.... this seems pretty meaningless

Harriette

It ends with...otherwise.

That is everything from that section of the deed which is why it confused me too.

I am not sure what the 'otherwise' means exactly and Google hasn't come up with anything accurate as yet...

Harriette

I have just seen this ;

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.




from propertyinvestmentproject.co.uk/blog/tenant-guarantor-form/


Seems to answer my question, however I am not sure if this is truthful!

chris_m

Harriette wrote: »

If the LL did not reply to my letter wishing to no longer be Guarantor, I would assume that meant he had no problem with it.

I wouldn't assume anything of the sort. No reply means absolutely nothing - possibly he hasn't received it, hasn't decided yet or, even, hasn't got around to reading it.

The only circumstances under which I'd be happy that the LL had no problem would be if he replies, in writing, so stating.

Thrugelmir

Harriette wrote: »

so I wrote to the LL to terminate the agreement. I heard nothing back so assumed everything was fine.

Can you prove that a letter was sent?

G_M

Harriette wrote: »

I have just seen this ;

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. I would believe this if they cited the case, and if it was in a court of precedence. 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. This is so blatantly false that it calls into question everything else written here. 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. Hmmm. I'm really not sure about this but my instinct is that the Guarantor's Estate would be bound by the Guarantee agreement.


from propertyinvestmentproject.co.uk/blog/tenant-guarantor-form/


Seems to answer my question, however I am not sure if this is truthful!

Me too. See comments above.

The website this comes from also states:
"The Guarantor form is a legal contract enforcing the agreement."

This is NOT true. It is NOT a contract since there is only an obligation in one direction: the guarantor promises to pay debts (of the tenant) but there is no recriprical offering of any kind from the landlord to the guarantor - hence no contract exists. That is why it must be a Deed.

The website this comes from also states:
" It is also recommended to get a signature from a witness." This is not true. There MUST be a signature on a Deed. Since this is a Deed not a contract, a 'recommendation' is not enough. A witness is essential.

This website, and the information it provides, is not reliable.

DVardysShadow

Harriette wrote: »

I have just seen this ;

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.




from propertyinvestmentproject.co.uk/blog/tenant-guarantor-form/


Seems to answer my question, however I am not sure if this is truthful!

No, there is no general answer. It depends on the words in the deeds, which is why I ask about the commas in the section of the deed you quoted.