Guarantor Problems - Advice Please!

ktcov

Hello all - I'd really appreciate some advice please.

In July 2008, my husband agreed to be guarantor for one of his friends. He didn't know what he was getting into. Two years ago, she changed jobs and fell into arrears by about £2,000 (partly due to her housing benefit being delayed). Although she paid them in the end, we told that the letting agency that we were not willing to act as guarantor anymore as our circumstances had changed, as we were under the impression that it was for the first 12 months only. They said to write to them and we would be removed - which we did.

Yesterday, however, we received a letter saying that she was in arrears (this time by nearly £300). When we contacted her, she said it was because she had changed jobs and so her housing benefit had been delayed again, but it was on the way.

We went into the letting agency yesterday evening and they were extremely rude. My husband said explained how he was told two years ago that he would be removed and how if she isn't paying her rent, why they would would keep her in the house. The agency said that they keep her in the house until the landlord tells them otherwise - regardless of whether she is paying what she owes - and before I knew it, the letting agency were threatening to take our house off us. :eek:

I've read a couple of other threads on this and don't think I really have a leg to stand on, but thought I'd try (he was young and thought he was helping out a friend... little did he know this could potentially keep going forever).

The guarantor agreement was given to him by the tenant to sign, not witnessed by anybody, and nowhere does it say that it is executed by deed - it is just signed and talked about as an agreement and titled a Covenant. I cannot remember being given a copy of her tenancy agreement either - as the tenant gave my husband the guarantor's agreement to sign, I doubt that we were.

This is what it says:

1. In consideration of the Landlord agreeing to grant a tenancy of the premises known as:- <TENANT'S ADDRESS & NAME> upon the terms of a Tenancy Agreement ("the Tenancy Agreement"), the Guarantor agrees as set out below.
2. The Guarantor agrees with the Landlord that, if the Tenant defaults in the payment of rent laid down in the Tenancy Agreement in accordance with the provisions thereof and/or any mesne profits arising therefrom, the Guarantor will pay to the Landlord on demand any such rent or mesne profits which have not been paid by the Tenant.
3. The Guarantor also agrees that, if the Tenant defaults in the performance or observance of the Tenant's obligations contained in the Tenancy Agreement or any of them, the Guarantor will pay to the Landlord all losses damages expenses and costs which the Landlord shall be entitled to receive by reason of the Tenant's default to the extent to which the Landlord is unable to recover them from the Tenant.
4. The Terms and Conditions set out on the Schedule below are hereby incorporated into this Agreement and form part of it.

And the Terms and Conditions...

1. All the provisions of this Agreement shall apply both during the term granted in the Tenancy Agreement and during any continuation or renewal thereof.
2. In the event that more than one person constitutes the Guarantor under this Agreement, the liability of the Guarantor shall be joint & several.
3. This Agreement shall not be discharged by the Landlord giving the Tenant time in which to pay the rent or mesne profits or other indulgence in respect of any of the Tenant's obligations under the Tenancy Agreement.
4. This Agreement shall not be revocable and shall not be discharged by the Guarantor's death or by the death or Bankruptcy of the Tenant.

I am horrified at number 4 in particular.

I know that she has signed new contracts but I presume these are just renewals (I know this because when we went into the letting agency they had a number of contracts on file for her) - we weren't notified of any of it, and I'm not sure if her rent has increased etc. However, it does seem that this guarantor agreement is fully binding for the rest of our life and even after that - literally forever... unless she chooses to move house. :(:(:(:(

I have a very good credit rating and would definitely not want to risk my house. However, she still lives in the property and we have no problem contacting her by telephone so I don't believe that they have chased her enough. My husband didn't sleep last night because of it.

I know I'm clutching at straws here, but is there any way to get removed as a guarantor once she has paid off this outstanding money?

monty-doggy

I'd get this contract checked by a solicitor, I'd be very alarmed!

ktcov

I just rang the letting agency to make the situation clear and say that she has a new person willing to be her new guarantor.

They say that they can't accept anything that we say; she has to contact them herself. At least it sounds like they can do something (if it was her, not me phoning). :think:

Next step: drag her into the letting agency or get in touch with her very grounded, very sensible boyfriend.

ktcov

Oh, and I have a friend who is a solicitor and I will definitely get her to check the agreement over!

[Deleted User]

For one your house is not at risk. The absolute worst that the letting agent can do is take you to court, get a judgement against you for an amount (if you're refused to pay) and then if the court rules that you owe the amount and you still don't pay you'll get a CCJ, which is bad for your credit file but won't get your house taken away from you! Don't panic about that, never going to happen.

From what people have said in previous topics about guarantor agreements, if it's not witnessed and not executed as a deed (I think that's the phrasing) it's not valid. The fact that you've asked to be removed as a guarantor before and the letting agent agreed (but didn't) is in your favour if this did go to court, do you have copies of the correspondence from that?

Most important thing to remember: letting agents / estate agents aren't magical house fairies, they're people that have bought some wings from a costume shop and are flying about taking advantage of those that don't realise they're no more qualified to deal with houses than you or I. They cannot do anything to you that any person you meet in the street couldn't.

Personally I would not worry, if you are seriously concerned talk to a solicitor 'cause this is ultimately a legal matter.

BitterAndTwisted

If that agreement wasn't signed and witnessed as a Deed, then it's likely that it's unenforceable.

Still, it's worth mentioning that a guarantor is signed up for the entire duration of the tenancy, even if it lasts decades. It is not possible to agree to be a guarantor, sign it as a Deed and then decide that it's only going to be for a limited duration.

spacey2012

I would see a solicitor the wording has serious flaws an unfair terms that are not lawful.
Once deemed unenforceable(by correct legal advice) the best course of action would be to do nothing and force the hand of the agent in to enforcement attempt in the court where it can be challenged at their expense.
Direct the solicitor to the passage about death of guarantor and the implications of this on surviving spouses who were not party to the contract at time of consideration.

ktcov

Thanks for the replies.

I have a copy of the letter that I sent on my old laptop - I'm going to ask my lovely IT friend to get a copy from the hard-drive for me. The letting agency said that they didn't have a copy of that nor even of her latest contract (due to new systems apparently).

You have given me a glimmer of hope anyway - and am very relieved it cannot get to the repossession stage!

Thank you so much.:)

dodger1

ktcov wrote: »

Thanks for the replies.

I have a copy of the letter that I sent on my old laptop - I'm going to ask my lovely IT friend to get a copy from the hard-drive for me. The letting agency said that they didn't have a copy of that nor even of her latest contract (due to new systems apparently).

You have given me a glimmer of hope anyway - and am very relieved it cannot get to the repossession stage!

Thank you so much.:)

But do you have their reply agreeing to your husband no longer being a guarantor?