Advice about guarantor deed

UK0106

Hi

I'm looking for some advice about a guarantor deed.

I agreed to be a guarantor at the beginning of this year (foolish I know!) for a tenancy period of 6 months. The person I agreed to be guarantor for had been told by the estate agent that they needed to get me to sign the documents the same day as they asked for a guarantor otherwise she'd lose the chance to rent the property so she drove round to my workplace and I sat in her car to sign the agreement.

Fast forward a few months and I received a letter from the estate agent to advise me she was a month in arrears and could I ask her to contact them. I told her to sort it and she did.

Another month or so passed and I received another letter from the estate agent with a copy of a formal document sent to the tenant giving her notice to quit by the end of the original tenancy period. Fair enough, I thought and left it at that.

Three months after the end of the original tenancy period, I receive a letter from a solicitors telling me I must pay £1600+ for rent arrears or be taken to court. Turns out, the landlord had decided the tenant could stay in the property after all and she was on a rolling contract but hadn't actually paid any of the rent during that time. She has since vacated the property without providing a forwarding address.

I wrote to the solicitors stating that I had agreed to be a guarantor only for the original 6 month tenancy period and had not even been made aware that the eviction notice had been rescinded so as far as I was concerned, my liability had ended with it. I also asked them to provide evidence of my liability if they thought it existed and provided them with the current address of the tenant so that they could contact her to pursue the debt. It's worth pointing out here that I was never given a copy of the guarantor agreement and never even saw, and wasn't given, a copy of the tenancy agreement itself.

I've now received a copy of a guarantor deed, which I obviously signed as it has my signature on it (even though I don't actually remember). The weird thing is that it has been signed by a witness who wasn't there when I signed and who I have never even met. It turns out she's the tenant's aunt. Is this legal?

My question is, am I actually liable for this debt? Before anybody starts kicking off with me for trying to shirk my responsibilities, I'm not. I'm just reluctant to pay such a large amount unless I am truly liable for the debt.

I'd also like to know if it's the norm for a guarantor not to be asked to cover unpaid rent until it reaches such a large sum. Shouldn't the estate agent have contacted me when she was in arrears like they had during the initial tenancy period?

Any advice here would be much appreciated.

Thanks

Thrugelmir

UK0106 wrote: »

Turns out, the landlord had decided the tenant could stay in the property after all and she was on a rolling contract but hadn't actually paid any of the rent during that time.

Takes time to evict a tenant.

UK0106

As I said, the landlord decided that she could stay in the property on a rolling contract after the initial tenancy period despite the notice to quit letter.

G_M

To be valid, the guarantor agreement must be executed as a deed, and the guarantor must have been given a copy of the tenancy agreement so as to understand what they are guaranteeing.

If your signature was not witnessed at the time, it was not executed as a deed.

If you did not have the tenancy agreement at the time, you could not legally know what you were comitting to.

However, there is the question of proof. The landlord/agent may claim in court (if it ever went to court)
a) that the aunt was present when you signed and
b) that you were given the tenancy agreement

Who would the judge believe? Depends how convincing you are and the landlord is! (and the aunt, if she comes as a witness!)

As for the extension of the tenancy beyond the 6 months, I cannot read the wording on the agreement you signed, so cannot comment other than to say it is usual for these agreements to remain in place for as long as the tenancy exists. Which it clearly still does.

UK0106

Thank you for the reply.

Is the burden of proof on me or the landlord? I have neither spoken to nor met the estate agent who dealt with the tenancy or the landlord and as far as I'm aware, the tenant has never met or spoken to the landlord either.

Obviously, the deed of guarantee was drawn up for the landlord and he's the one attempting to take court action against me but I'm not sure how he could try and prove that the signature was witnessed or that I was given a copy of the tenancy agreement.

The wording is:

Deed of Guarantee

This Guarantee is made the 11th January 2012 between "Landlord Name" of the first part ("The Landlord") and "My Name" of "My Address" of the second part "(The Guarantor")

It is hereby agreed that:

1. In consideration of the Landlord agreeing at my/our request to accept "Tenant Name" as the Tenant of the property known as "Tenancy Address" ("The Property") upon the terms and conditions of the agreement annexed ("The Agreement") the Guarantor hereby agrees to fully indemnify the Landlord for any loss, damage, costs or other expenses arising either directly or indirectly outof any breach of the Agreement (or any extension or continuation thereto) by the Tenant or any person acting on his behalf.

2. No forebearance on the part of the Landlord or any surrender of the Agreement by the Tenant shall relieve the Guarantor of his liability hereunder.

3. This Guarantee shall continue throughout the period that the Property is occupied by the Tenant of any licensee and is not limited to the term specified in the Agreement.

4. This Guarantee shall not be revocable by the Guarantor nor will it be rendered unenforceable by the Guarantor's death or bankruptcy.

Signed as a deed by
[My Name]

in the presence of:
Signature of Witness

Name

Address


Occupation


So the agreement does state that I was liable past the initial tenancy period, which I didn't know before being sent this document (I literally signed the documents in the passenger seat of the tenant's car in about 10 minutes which was 40 minutes after she sent me a text asking me to be guarantor so don't remember whether I signed anything else).

Is there anything I can ask the landlord's solicitors to provide me with as proof that I saw the tenancy agreement or do I just tell them that I believe the guarantee deed was incorrectly executed due to not seeing the tenancy agreement and the fact that my signature wasn't actually witnessed?

Thanks

anselld

There isn't anything you can ask the L solicitors that is going to stop you having to go to court. So you can either ..
(a) pay up and avoid further court fees etc
(b) go to court and defend on the claimed lack of witness and prior view of the agreement
(c) try to get the T to meet her original obligations.

You obviously trusted and knew the T when you signed, so have you exhausted (c)?

GDB2222

anselld wrote: »

There isn't anything you can ask the L solicitors that is going to stop you having to go to court. So you can either ..
(a) pay up and avoid further court fees etc
(b) go to court and defend on the claimed lack of witness and prior view of the agreement
(c) try to get the T to meet her original obligations.

You obviously trusted and knew the T when you signed, so have you exhausted (c)?

That's not quite right. You can also put in a formal defence under option (b), then offer to pay half (say) to settle the matter. That may well suit all concerned better than the stress of going to court.

You definitely did not acknowledge your signature on the document in front of the aunt after you had signed the document? If it was not done correctly, I doubt that the aunt will be willing to testify for the landlords, so you may get away with it if you go to court.

zzzLazyDaisy

There is another thing to consider.

Was the tenant in receipt of LHA (housing benefit)? And was the EA aware of this? I ask because after 8 weeks of non-payment, the LL can ask for the LHA to be paid direct to the LL. Where there is a guarantor, the EA's often don't bother because the rent is already guaranteed.

But if the EA/LL was aware of the LHA situation it can be a useful bargaining chip. That and the fact that they did not exercise their right to evict the tenant, once she was in arrears.

Where there is a guarantor, the LL does not have a duty to mitigate its loss, but many EA's and LL's are not aware of this, and won't waste monet seeking legal advice. So it is worth using the argument that (i) the guarantor agreement is invalid because the correct legal procedure was not followed (don't spell out what the flaws were just yet) the LL has a duty to mitigate it's loss and should have made an application to the LA for direct payment of LHA (assuming they were aware of this) once 8 weeks arrears had accrued, and also should have taken immediate steps to serve a S8 notice and evict the tenant once 8 weeks' arrears had accrued. Using this argument you may be able to limit your exposure to just two months' rent, and come to an agreed settlement on that basis. If they refuse to play ball you ay have to wait until they start proceedings in the small claims court, but most EA's just want an easy life.

Make sure any settlement is clearly in Full and Final, or done through the court.

I am only saying this because I helped someone else in exactly this situation fairly recently, and in fact what happened was that the EA/LL lost interest all together and never pursued the matter, although the G'tor would have been willing to settle at two months rent if pushed. It isn't legal advice (I'm not an expert) it is just a pragmatic option if you want to try and make this go away.

PS - the tenant's contract (and yours) is with the Landlord. The EA is acting as the landlord's agent - so when people refer to LL, it includes the EA.

UK0106

Thank you for the replies.

I definitely didn't see the guarantor deed after signing it until I received a copy of it yesterday in the post.

The witness was not present at the time (I signed in the tenant's car with the tenant only) and I didn't see the document after she witnessed it.

I'm thinking my best bet is to contact the solicitor and advise that them I don't believe the deed was executed correctly and see what happens from there.

In answer to the other question, T was my brother's girlfriend at the time. They're no longer a couple and despite telling him she was going to pay the outstanding amount when I received the first letter, she clearly hasn't. She's ignoring my calls and messages so I don't think I'm going to be able to get her to accept responsibility for her own debt.

She was in receipt of LHA being paid directly to her but I don't think I can use the argument suggested on that front because the LL has already involved a solicitor so I'm guessing will be aware of the legalities around mitigating loss.

G_M

UK0106 wrote: »

Thank you for the replies.

I definitely didn't see the guarantor deed after signing it until I received a copy of it yesterday in the post.
So what? You saw it when you signed it. If you chose not to read it properly before signing.... more fool you!

The witness was not present at the time (I signed in the tenant's car with the tenant only)
then the 'witness' did not in fact witness your signature. Invalid. Will the 'witness' state this in court if required?
and I didn't see the document after she witnessed it.
as said above - so what?

I'm thinking my best bet is to contact the solicitor and advise that them I don't believe the deed was executed correctly and see what happens from there.
A good move. Do it in writing. Keep it short and factual.

In answer to the other question, T was my brother's girlfriend at the time. They're no longer a couple and despite telling him she was going to pay the outstanding amount when I received the first letter, she clearly hasn't. She's ignoring my calls and messages so I don't think I'm going to be able to get her to accept responsibility for her own debt.
Then you either pay what you agreed to pay, or contest it on basis of invalid Deed.

She was in receipt of LHA being paid directly to her but I don't think I can use the argument suggested on that front because the LL has already involved a solicitor so I'm guessing will be aware of the legalities around mitigating loss.

At the end of the day, if you decline to pay, the landlord/agent will have to decide whether to take court action against you, or walk away from the lost rent.

If they start a court action, that is when you enter the relevant defence.

Thrugelmir

UK0106 wrote: »

Is the burden of proof on me or the landlord?

You. The LL has a valid document as far they are concerned.

Given the tenant is evasive. Will the witness be any more forthcoming?

Also you'll need to weigh the cost of employing a solicitor in court against the debt that's owed.