Guarantor contract - variation in tenancy

JimmyJames1976

Sorry for the mammoth post…

Before we were married my wife signed a guarantor agreement for one of her friends. He was one of two friends who were renting a property together.

The agreement named the two people who were living together as friends in the property, and referred to them as "the Tenant", but stated that "Notwithstanding the joint and several liability of the Tenant the Guarantor's liability under the terms of this Deed shall be limited to the default in rent of (friends name)".

So my wife was only liable for one person’s rent, despite there being two (named) people living in the property.

This was all fine for a couple of years, but after this time the other named person moved out, and two new people moved in. Apparently a new legal document was created by the letting agents, but this was never sent to my wife.

Since the change in tenants, my wife receives fairly regular letters from the letting people, naming the 3 tenants (2 of whom we have never met) and stating that moneys are owed, and we need to pay them.

We call the letting agents who advise us that despite all three tenants being named on the letters, we are only liable for the friend, but that 'the system' automatically sends the letters and they are unable to differentiate between the tenants if one of them has not paid. We have to phone our friend to confirm he isn’t the one who hasn't paid (and then take his word for it). 9 times out of 10 the letting agents tell us the payment has subsequently been made, and that we can ignore the letter.

Recently we received a 'second letter' - stating that as we have not responded to the original letter we have 7 days to pay. The letter goes on to imply that court might be the next step. This was despite being told that the person my wife is Guarantor for had paid, and that we should ignore the initial letter.

My concerns are numerous. The fact that my wife signed the document in the first place (but let’s not go there), the fact that we seem to be responsible for validating the claims made in the letters we receive, the fact that our friendship with the guy my wife was helping is becoming strained by our apparent 'accusations', and the fact that the situation with the tenancy has changed considerably without us being asked to sign anything new.

It is the last concern that I want to ask about. Following advice in the letter I perused the CAB website. I noticed the following in a section called 'When does the Guarantor's liability end?':
"A variation in the tenancy agreement could bring the guarantor's liability to an end. For example, a change to the rent or a renewal of the tenancy would count as a variation unless:

the agreement said that the guarantee applies to any future variations or renewals, or
the guarantor consents to the variation."

The contract did state that the guarantee would continue for 'any extensions or continuations thereof and shall include any subsequent increases in rental...', but did not mention that it would continue if the tenants changed. Apparently a new contract was drawn up, but as mentioned, I am told by my wife that she was never sent it. I am still awaiting a reply to my email to the letting agents in which I asked them if they ever sent it.

So to my question... does the change in tenants reflect a 'variation' that we could argue was large enough to discharge our liability?

The more I think about it the more I feel we need to seek legal advice. We can do this, but wanted to ask here first. Some people might have similar experiences.

There are other factors - like our friend being told he no longer needed a guarantor as there were now 3 people living in the property instead of 2, and that my wife was no longer guarantor, but I have no way of proving this and the letting agents have stated that she certainly still is guarantor. Probably best not muddy the waters with that!

Thanks if you can advise.

slopemaster

Was the guarantor agreement executed as a deed (witnessed)?

rpc

JimmyJames1976 wrote: »

The agreement named the two people who were living together as friends in the property, and referred to them as "the Tenant", but stated that "Notwithstanding the joint and several liability of the Tenant the Guarantor's liability under the terms of this Deed shall be limited to the default in rent of (friends name)".

Which is almost certainly meaningless junk

So my wife was only liable for one person’s rent, despite there being two (named) people living in the property.

As it is a joint tenancy, that one person is liable for the entire rent, not a share of it.

This was all fine for a couple of years, but after this time the other named person moved out, and two new people moved in. Apparently a new legal document was created by the letting agents, but this was never sent to my wife.

Since the change in tenants, my wife receives fairly regular letters from the letting people, naming the 3 tenants (2 of whom we have never met) and stating that moneys are owed, and we need to pay them.

Sounds like either a deed of assignment or a new tenancy.

So to my question... does the change in tenants reflect a 'variation' that we could argue was large enough to discharge our liability?

That is what you should argue. You guaranteed a particular contract. That contract was varied without your knowledge or consent and so the deed does not carry over.

You committed to guarantee a tenancy for A and B. You are now being told that you are guaranteeing a tenancy for A, C and D. Not the same. A properly done deed of guarantee is very binding, but also very narrow.

Also consider whether the deed is, in fact, binding. It must be executed as a deed (plainly a deed, signatures, witnessed, etc) and you must have also seen the tenancy agreement that you were guaranteeing. Ideally you have a copy.

The more I think about it the more I feel we need to seek legal advice.

You probably do. It's up to you make an attempt to get out of it on your own, but the LA will almost certainly tell you to go jump.

If you do send anything, also send a copy to the landlord. If it comes to court, it is the landlord that will have to do it (the agent can neither prepare court documents nor represent the LL in court).

Bear in mind that if you can get out of the guarantee, that may result in eviction for the tenants.

JimmyJames1976

slopemaster wrote: »

Was the guarantor agreement executed as a deed (witnessed)?

The signature was witnessed - seemingly by one of the letting agents. The address they have provided is the letting agents address.

@rpc - Thanks for the information and advice. I will consider everything you have mentioned, in particular the potential consequences for our friend!
I feel a bit out my depth pursuing this without legal advice. I would hate to send a letter and 'reveal my hand' only to find that I have made the situation worse. Certainly one to think carefully about.

G_M

I doubt you need legal advice.

The original Guarantor agreement was probobly invalid as
* ambiguous as to who /what you are guaranteeing
* probably not executed as a deed (though you need to confirm this)

Be that as it may, the original tenancy has ended and a new one has started. Clearly you have not agreed to guarantee the new tenancy, via another invalid agreement OR via a properly executed Deed

Write a short simple letter denying any responsibility to the current tenancy between the LL and X,Y, Z (current tenants), and then cease all communication. Do not get drawn into further exchange of correspondance, telephone discussions etc.

All the LL/agent can do is sue, which they won't as they'd lose.

(Oh - or make threatening noises/letters and hope you get scared and pay them).