Time-lapsing guarantor?

natscat84

When me and my husband moved into our current flat, we had my dad as a guarantor for our rent since we'd not rented on our own before, and were both students.

Now that we've been in the flat for 2 years, always paid our rent on time, working, paid all the bills etc ourselves, is my dad still the guarantor, or has he been lapsed as guarantor once our lease expired and we went onto a new 'rolling' lease?

Also, will our rental history count for us in the future when we leave our current property and rent somewhere else, so we shouldn't need to have my dad guaranteeing us?

This is now the only area of my life where I still have a financial tie to my parents and don't want that anymore as I'm independent elsewhere!

BitterAndTwisted

There's no such thing as a guarantor "lapsing" during a tenancy whether it's still in the fixed-term or having gone onto a rolling periodic one. Check the paper-work thoroughly as it should have been signed and witnessed as a Deed because many landlords and their agents manage to get this wrong.

And yes, your two years of paying the rent in full and on time should stand you in good stead when applying for a new tenancy if your current landlord chooses to give you a good reference. Your need for a guarantor in another property will also be dependent on you passing their "affordability-test" which will take into account your joint-incomes. Having paid the CTax and utility bills in your current property will be irrelevant to a new landlord.

G_M

natscat84 wrote: »

When me and my husband moved into our current flat, we had my dad as a guarantor for our rent since we'd not rented on our own before, and were both students.

Now that we've been in the flat for 2 years, always paid our rent on time, working, paid all the bills etc ourselves, is my dad still the guarantor, or has he been lapsed as guarantor once our lease expired and we went onto a new 'rolling' lease?

Maybe.

You (or your dad) will need to read the guarantor agreement that he signed to check exactly what it was he signed up to!

The GA should have been Executed as a Deed, and witnessed when you dad signed it, and he should also have been given a copy of the tenancy agreement which he was guaranteeing. Without all this, the Guarantee Agreement may be invalid/unenforcible.

But for the terms of the agreement (ie does it lapse), read the agreement!

roger196

I always advise people to put a time limit and financial limit into any guarantee that they are considering signing. Without this, the guarantor could face an unlimited period of guarantee when the tenancy went periodic. A awkward tenant would not pay his rent and the LL would have no incentive to get tenant out as he would collect rent forever from the guarantor.

BitterAndTwisted

These people you are advising: how do you propose they manage to put a time-limit on their guarantee and by what method could they achieve a financial-limit?

G_M

BitterAndTwisted wrote: »

These people you are advising: how do you propose they manage to put a time-limit on their guarantee and by what method could they achieve a financial-limit?

If the guarantee agreement is Executed as a Deed, as it should be, the terms of that Deed can be... whatever the landlord and guarantor agree!

Of course, in practice, the balance of power is such that the guarantor usually cannot negotiate. Landlords/agents tend to offer a 'take it or leave it' GA.

DVardysShadow

If the Guarantee is not executed as a deed, it would be reasonable,[but untested, I imagine] for the guarantor to give notice on the guarantee.

Giving notice on a guarantee has to be reasonable. It would need to give a reasonable time to when the Landlord could next give S21 notice to the tenants and cover the notice period and up to any repossession on notice. But if the landlord chooses not to issue S21 notice, that should be the end of the guarantee.

roger196

BitterAndTwisted wrote: »

These people you are advising: how do you propose they manage to put a time-limit on their guarantee and by what method could they achieve a financial-limit?

As part of the negotiations for the guarantee, the following is written into the documents:-
1 This guarantee expires on 31st December 2013
2 The maximum payable under this guarantee is £5,000.

If the other side wont agree to this, you do not give the guarantee. Obviously it's all a matter for negotiation.

DVardysShadow

roger196 wrote: »

As part of the negotiations for the guarantee, the following is written into the documents:-
1 This guarantee expires on 31st December 2013
2 The maximum payable under this guarantee is £5,000.

If the other side wont agree to this, you do not give the guarantee. Obviously it's all a matter for negotiation.

3. The Landlord to advise the Guarantor without delay of late payment of rent beyond 14 days or of any other event where a call on the guarantee may reasonably be seen as a possibility
4. The Tenant to authorise the Guarantor to give notice on their behalf and the Landlord to accept such notice, where notice has been given under 3 above, both to accept that this would be a mutually agreed surrender of the tenancy should this occur within the fixed period of any tenancy

mchale

roger196 wrote: »

As part of the negotiations for the guarantee, the following is written into the documents:-
1 This guarantee expires on 31st December 2013
2 The maximum payable under this guarantee is £5,000.

If the other side wont agree to this, you do not give the guarantee. Obviously it's all a matter for negotiation.

And my response as a LL is "you don't get the property"

roger196

A few months without a tenant and no rent might make you think again.

What are the reasons for a LL to need a guarantee lasting, say, ten years for a six month AST?

A LL is meant to be in business carrying the risks associated with that business. If he wants guaranteed returns he should, in my opinion, invest in gilts or national savings.