Pestered for Debt as a Guarantor from Letting Agent

j9faulk

It's a long story so I will try and keep it brief. We acted as a Guarantor for our friend's daughter. She was given a section 21 but the council advised her that if she moved out they would not help her with accommodation & the council phoned the letting agents & said they would have to get a court appointed bailiff to evict her.

The house was cleaned & ready for her to move out on the appointed day & the council have housed her in a b &b. This was back at the end of August.

We received a letter from the letting agents mid October stating that she/we owed over £1470 for works that needed to be done on her checking out. There was a £795 deposit which left us owing the remainder. They gave us 7 days to pay or they threatened to take us to court.

I sought advice & found out they can't do that & it ended up going back to the council as she had taken out a bond with them for the deposit. Both sides put forward their evidence to the council & they ruled that she only had to pay £566 which was what the council paid the letting agent with the balance of the money being paid back off the loan she had take for the deposit. That was at the end of October.

We heard nothing more assuming this had now been dealt with until the week before Christmas when we received a letter out of the blue from the letting agent saying we still owed them £905! Again we sought advice from a different letting agent & a brief all with a solicitor over the phone who said to ignore it as it was unlikely to proceed.

Yesterday we received a second letter (none of these letters have been sent by recoded delivery) which threatened to involve a debt collection agency!

My question is can they just involve a debt collection agency without going to court first to prove we are liable to pay this money? This has already been looked at by an independent 3rd party who has given an impartial view based on photographic evidence.

Also as the council instructed the letting agent that they would have to evict her with a court appointed bailiff should she then be responsible for this cost & in turn then us? & as a matter of point they have charged a £110 for a bailiff who was not even there!

Any advice would be gratefully received.

G_M

1) yes they can appoint anyone they wish (ie a debt collection agency) to try to collect the disputed debt

2) debt collection agencies have limited powers. After a court decision, court bailiffs have lots of power!

3) the council advice has no bearing on court costs. If eviction involves bailiffs, costs can (usually are) claimed against the tenant.

4) the issue of whether the debt is owed is down to
a) negotiation/agreement
b) court decision based on evidence

5) the council cannot 'rule' what is owed. They can only decide what they are willing to pay. Only a court can decide (or deposit scheme arbitrators if deposit is registered - but not here) what must be paid, so if the landlord/agent feels the debt is still owed they can sue if they wish

theartfullodger

Wot GM says:

I would not reply or communicate with letting agent or landlord (it will only encourage them..).

If debt collectors turn up ask them to leave: If they don't call Police. DO NOT let them in the house.

If you get court papers, ask again...

j9faulk

Thank you for your quick response it's greatly appreciated. Someone told me that the court costs would only be her/our responsibility if the court ruled that she would have to pay the costs when the section 21 was given. Is that not the case?

Regarding the debt collectors what could they legally do if we have disputed the debt?

The one thing going that does concern me more than anything is rising costs. When I sought advice and was told that if it went to a small claims court it would cost about £30 I thought it was worth the risk in getting a proper ruling on it. The property was not left in the state they are claiming & we have evidence to prove this and the main other costs are the court fees for the section 21 and the bailiff who as I said was never there. However if we are going to start getting charged for a debt collector it could spiral out of control.

We have never been in this position before & it's really quite scary.

theartfullodger

Was the original guarantee "signed as a deed" & witnessed?? were you given a copy of the tenancy to read well before signing guarantee??

It is quite possible guarantee is unenforceable..

G_M

Why would you want to take it to a Small Claims Court? What will you be claiming?

It is up to the landlord/agent to decide if he wants to claim off you via the SCC. If he does, then at that point you present your evidence and enter a defence.

j9faulk

Theartfullodger, no it wasn't witnessed, my friend's daughter brought it round for my husband to sign & then took it back to the letting agent. I'm not sure if we got a copy as it was over a year ago & I can't remember. I must admit I usually take copies of everything but I'm not even sure I was even in when she came round.

G_M I don't want to take them to court but I was worried that if they took us to court & then were successful then we would be responsible for court fees as well. I was told that even if that did happen it would only cost us about an extra £30 which made it worth the risk. Sorry for the confusion.

Peter333

*shudder* Who would EVER be a guarantor for ANYONE? _pale_

Sorry OP, I know it probably doesn't help you, and I am sure the good people on this board can advise you better than me, but hell would freeze over before I'd become a guarantor. It's just asking for trouble.

Basically you should only do it, if you can afford to lose potentially multiple 1000s of pounds.

j9faulk

Peter 333, I was helping out a friend who had no chance to get a place without it. Not something I was keen on but sometimes people need a break & I trusted her to make the payments which she did. What I didn't count on was them making ridiculous charges for items that was unreasonable. One learns by ones mistakes ��

G_M

j9faulk wrote: »

Theartfullodger, no it wasn't witnessed, my friend's daughter brought it round for my husband to sign & then took it back to the letting agent..

Then you can argue the guarantee agreement is not valid, so you cannot be held liable for the tenant's debts.

Of course, this does not stop the landlord suing the tenant.

Strictly speaking, to be valid, a GA must:

* be drawn up, and Executed, as a Deed - it must clearly say it is a Deed
* All signatures must be witnessed while signing, and the witness must sign to say they saw the signing, and must be identifiable (ie their address /occupation)
* it must be clear to the guarantor exactly what he is guaranteeing. In the case of a tenancy, that means he must have seen the tenancy agreement so that he is fully aware of the rent, any clauses within the agreement etc. Before he signs.

Without the above, the guarantee agreement may be ruled invalid in court. I say 'may' because judges sometimes allow some leeway so as in so many legal matters, one cannot be 100% certain of anything untill after the court decision.

So, if and when the LL takes you to a Small Claims Court, you enter two defences:

1) the guarantee agreement is invalid
2) even if it were valid, the damage being claimed did not occur/ exist as proved by (photos, witnes, check-out report, original check-in inventory showing damage pre-dated tenancy etc)

j9faulk

Thank you so much for the helpful advice G_M I can't tell you how much I appreciate it. I will sit tight & see what happens. Can't believe when they send out these kinds of letters that they don't send them by recorded delivery as proof documentation has been received, especially with these short time frames.

Thank you to Theartfullodger feel a bit happier now.

:beer: