Guarantor agreement

starburst123

Marktheshark wrote: »

I would pay a solicitor specialised in contracts to look at this.
I think they might agree it is not a valid deed.
However even a guarantor deed is not an open payment account and the mitigation of loss is still a valid defence.
They can evict the tenant for non payment as soon as legally possible and therefore mitigate any loss and a judge would require them to explain what steps they had done to mitigate any loss.
The method of a loss is separate to who pays the loss and English law is based upon the caveat that one must do all possible to mitigate that loss.
Who pays is a seperate issue covered by the deed.

There is no mention in the tenancy agreement about at what point they will look to seek possession of the property, and no mention of it in the guarantor paperwork. No breakdown of the charges that could be levied against him, and basically it seems he has unwittingly signed up to screw himself financially for an indefinate period while he is at the mercy of the tenant and the agent. The agent has no inclination to stop allowing the rent arrears and huge fees stacking up all the while they have him on the hook.

jjlandlord wrote: »

We know it is not a deed.

I'm sorry to be asking a stupid question, I am trying my best to get my head around this whole situation, but what is meant by this statement and does this fact help his situation?


I really appreciate everyone's advice and input so far, thankyou.

Marktheshark

This is why I am advising you see a solicitor, this sounds like one of those cases where it might save you an awful lot of money.

starburst123

Marktheshark wrote: »

This is why I am advising you see a solicitor, this sounds like one of those cases where it might save you an awful lot of money.

I sincerely hope so and thankyou for taking the time to read and reply... Have checked our contents insurance and we have legal cover with that, though an exclusion is "an event which you report to us more than six months after it happened" - the signing of this was 18 months ago but as the current court action is within the last month I hope they can at least offer advice on that. Guess it's worth a call. Have also just read through the OFT's guidance on unfair terms in tenancy agreements and there are at least 15 points in there which could relate to this. If only we had known how this would have turned out he'd never have gone along with it

mrginge

Marktheshark wrote: »

I would pay a solicitor specialised in contracts to look at this.
I think they might agree it is not a valid deed.
However even a guarantor deed is not an open payment account and the mitigation of loss is still a valid defence.
They can evict the tenant for non payment as soon as legally possible and therefore mitigate any loss and a judge would require them to explain what steps they had done to mitigate any loss.
The method of a loss is separate to who pays the loss and English law is based upon the caveat that one must do all possible to mitigate that loss.
Who pays is a seperate issue covered by the deed.

reichman v beveridge

Marktheshark

The issue may be more simple, what constitutes a Guarantor deed is quite specific in how it is created and worded.
If it is wrong, it's invalid and you owe them not one single penny.
Thats why I would find the cost of a Solicitor for an hour that deals in contract law and ask they give a legal opinion.
I can not give you a legal opinion as I am not listed under the legal services act to offer legal opinion.
What I can do is recommend based on what I have seen that it is in your best interest to get a legal opinion and based on that you may want to substitute the defence to one of basically, whistle for it the deed is not valid.

starburst123

Just an update... The agent has admitted that the fee guide referred to in the tenancy agreement does not exist and is now stating that only one lot of fees has been applied to the account - they have reissued the account statement. I am minded to ask them why court action was taken against both tenant and guarantor at the same time? They say all the information relating to fees is in the contract but it's not, it states the non existent appendix covers the charging. They are an absolute shambles and surely ignorant of the OFT guidance on unfair clauses in tenancy agreements by doing this. Waiting on a call from a local solicitors to see if they can help with the guarantor paperwork - hopefully it's within their expertise

rpc

starburst123 wrote: »

Just an update... The agent has admitted that the fee guide referred to in the tenancy agreement does not exist and is now stating that only one lot of fees has been applied to the account - they have reissued the account statement.

So that goes on the defence - the fee schedule was non existant so could not have been provided or agreed to. But the main argument would still be that there was no guarantee because there was no deed.

Make sure your solicitor is aware of all of the errors the LL has made - on the offchance one argument fails you want several more included in your defence.

I am minded to ask them why court action was taken against both tenant and guarantor at the same time?

They are perfectly entitled to, losses could be recovered from one or both parties.

Waiting on a call from a local solicitors to see if they can help with the guarantor paperwork - hopefully it's within their expertise

This is definitely your best bet.

mrginge wrote: »

reichman v beveridge

That describes a commercial tenancy with a right to assign/sublet. The judgement covered the lack of action on the part of the T to exercise that right.

It may not set precedent for a domestic tenancy with no right to assign. The legal framework is different in addition to the tenant's rights.

mrginge

rpc wrote: »

That describes a commercial tenancy with a right to assign/sublet. The judgement covered the lack of action on the part of the T to exercise that right.

It may not set precedent for a domestic tenancy with no right to assign. The legal framework is different in addition to the tenant's rights.

More than happy to be educated, however I've never seen any evidence or statement that Reichman v Beveridge would not apply to an AST.

LLZone for example. -

http://www.landlordzone.co.uk/content/tenancy-surrender

...highlights the commercial nature of the case but that it is a 'reasonable assumption' that it would apply to an AST.

jjlandlord

For a tenancy to end by surrender the landlord must accept it.
Unless and until he does the tenancy continues and there is no loss to mitigate: Rent accrues as per the terms of the tenancy and becomes a debt.

This applies to all tenancies and leases.

Marktheshark

Reichman v Beveridge refers to a commercial lease not a AST.
Two parties of equal standing in a commercial lease set up.