Am I still Guarantor?

Paranoid40

Hi,
My first post on this site and I need advice please on whether I'm still liable as guarantor for my friend's rent. I signed a Tenancy Agreement for a 1 year term as guarantor in 2006 and at the same time I also signed a Deed of Indemnity with the landlord and a witness. The Deed states the landlord's, my and my friend's names and addresses, but does not state the rent amount nor much else.

My friend has not paid the last 2 months rent, has been served a section 21 and is in the process of moving out before the date on her notice. A debt collection agency is after me for the 2 months rent, interest and costs. They have instructed legal proceedings against me after I told them I didn't think I was liable.

The reason I don't think I am is because the Tenancy Agreement I signed in 2006 as guarantor has been superseded by a new Tenancy Agreement that the landlord and tenant signed in 2010. This had no details for the Guarantor (the section was blank) and I did not sign this Tenancy Agreement.

Also, the letter which the Letting Agent wrote to my friend serving the s21 notice states "...we serve the formal Section 21 notice asking you to vacate on <date>. This is a different date to the one we discussed on the phone as the last tenancy was not signed it has to be a periodic notice ending on the end of a rent period." Not sure if this affects my liability.

This is the precise wording of the Deed:
THIS DEED OF INDEMNITY is made the <day> day of <month> the year TWO THOUSAND AND SIX
BETWEEN <Landlord name and address> and <My name and address> WHEREAS:
(1) The Landlord has agreed to lease to <Tenant name> a property known as <Landlord’s rental property address> on terms inter alia that the Guarantor enters into this indemnity
(2) The Guarantor has requested the Landlord to enter into the said lease and has agreed to enter into the covenants herein contained;
NOW THIS DEED WITNESSETH AS FOLLOWS:
(1) If the tenant shall make a default in the payment of the rent the Guarantor hereby undertakes upon first request to pay the Landlord or Landlords Agent the outstanding rent
(2) This indemnity shall not be limited or discharged by the Landlord giving the Tenant any time in which to pay the rent or by the Landlord giving any other indulgence to the Tenant.
IN WITNESS whereof this Deed has been executed the day and year first before written
Signed and Delivered
<My name> Guarantor <My signature>
In the presence of <Letting Agent signature as witness>
Print name <Letting Agent name>
Address <Letting Agent address>

Views on whether I'm liable would be very much appreciated. Thankyou.

theartfullodger

As there is a new, not-guaranteed-by-you, tenancy now in operation I'd say you are not guarantor for the new tenancy.

Were there arrears still from 1st tenancy then you probably still are..

Guarantees come down to will the landlord sue the tenant and/or guarantor and is he prepared to go to court , all the way etc..

I expect LL has instructed debt collection agency in the hope you cough up.

I'd write (yes WRITE!!! keep a copy..) a calm polite letter to Landlord & debt collection agency asking for a copy of the relevant tenancy, rent statement & guarantee, and that you refute any liability at this time.

Debt collection agencies can be staffed by those who failed the (fill-in-name-of-hated-profession...) charm test. If they turn up do not let them in, do not open windows & doors, call Police if they refuse to go away, if possible get photos & recordings of their threats...

You may be interested in...

Administration of Justice Act 1970
, s40, ref harassment of debtors
(1) A person commits an offence if, with the object of coercing another person to pay money claimed from the other as a debt due under a contract, he—
(a) harasses the other with demands for payment which, in respect of their frequency or the manner or occasion of making any such demand, or of any threat or publicity by which any demand is accompanied, are calculated to subject him or members of his family or household to alarm, distress or humiliation;

Have they actually started legal proceedings against you or just say they have?? If they have, treat the matter with all seriousness, if only to avoid judgement & CCJ..

Maybe advise your friend to 'phone Shelter, 0808 800 4444

Cheers!!

G_M

Artful is right apart from the fact that you introduce some confusion in your post as follows:

The reason I don't think I am is because the Tenancy Agreement I signed in 2006 as guarantor has been superseded by a new Tenancy Agreement ...signed in 2010. This had no details for the Guarantor ....

This is a different date to the one we discussed on the phone as the last tenancy was not signed it has to be a periodic notice ending on the end of a rent period."

If the 2nd tenancy was not signed (by LL/tenant) then it never took over from the 1st tenancy. So the first tenancy continues (as Periodic) and
a) Notice must be in accordance with Periodic tenancy rules and
b) the guarantor Deed is (it seems) still valid.

Some Guarantor agreements are time-limited, or specifically state "for the period of the fixed term of the tenancy", but most, as seems likely here, do not. So they continue when the tenancy becomes periodic.

As you'll appreciate, logically a LL who wishes to protect himself where a tenant is perhaps a higher risk, requires a guarantor for as long as that higher risk tenant is in his property.

And by agreeing to be that guarantor, you were effectively saying "Don't worry landlord, I know/love/care about my son/friend/whoever and I am happy to make up any loss you incur in the unlikely event of him owing you money"

My advice to you would be to

a) talk to your friend and find out what HE plans to do about his debt, and make clear that if you get lumbered you'd like him to re-imburse you (or better still, pursuade him to clear the arrears!)

b) talk the LL and come to an agreement about paying off the arrears (perhaps a compromise on amount?) bearing in mind the property still has to be assessed for damage if any....) and avoid court action

Or fight it through the courts.

But I have to say, in this scenario the innocent victim is the LL, the guilty party is the tenant, and you are somewhere in the middle having agreed to cover the tenant's debts but now wishing to find a way not to....

Paranoid40

Thanks for your help and sorry for the confusion. The 2006 Tenancy Agreement was superseded but the one signed in 2010 by Tenant and Landlord but not me. The TA that isn't signed is the one for the current year 2011-2012.

I wrote to the debt collection agency on 30th July to say I dispute the debt/liability and haven't heard anything back since. I've spoken to my friend who says she will pay the arrears if necessary (ie if it goes to court) but doesn't believe I'm liable and is hoping like me that the debt collection agency gives up. She hasn't paid the rent because of various problems with the property that the Landlord hasn't sorted out, hence she is moving out. All I want to do is ensure I don't end up paying or have a CCJ against me.

DVardysShadow

Make a complete pain of yourself and ask for a complete statement of rent paid from the inception of the tenancy in 2006. This will stand you in good stead if ever this matter goes formal.

theartfullodger

Not sue I agree with G M .. a tenancy does not have to be written, that one exists, albeit unsigned, clearly shows it was offerred, given tenant continued in occupation I'd argue new tenancy so no guarantor. Particularly if there was some other change, eg rent went up & you can show it was paid & accepted.

Agree, make a fuss demand evidence.

I reckon you should be able to avoid paying. Next time make sure there is an end date!

G_M

artful and I agree.... and disagree!

I believe you're wrong artful - if the 2011-2012 agreement was not signed, the a SPT arose.

But either way it is immaterial since the 2010 tenancy WAS signed, without a guarantee agreement.

The debt collection agency is unlikely to undertand/care about these legal intracacies. Don't expect a response. It is only in court the guarantor liability will be confirmed/dismissed.

I am somewhat shocked by the attitude though. There seems no dispute that there ARE arrears, and both legally and morally they should be paid, ideally by the tenant on whom pressure should be brought either by the LL or the guarantor or the courts.

The fact that

various problems with the property

is a seperate issue and no justification for arrears. There are proper procedures for dealing with 'problems' (whatever they were). Deducting repairing costs from rent, for example, is ultimately possible but only in certain circumstances and by following a precise process.

The tenant

says she will pay the arrears if necessary (ie if it goes to court)

in other words "if I can get away with ripping someone off, I will. If I get caught, I'll do what I have to to avoid further trouble like a CCJ."