Student Guarantor

Pamela_Dixon

My Partner signed as guarantor for his son in a shared house for 2nd year at uni. 4 students were to share. Now one has pulled out. My partner believed he was only responsible for his son's rent and indeed the Deed of Guarantee states the guarantor percentage as 25%. However the contract for the property is 'joint and several' so I belive the remaining students (and their guarantors) are liable for the full rent. The student who has pulled out is now saying he is not liable and signed the contract without a guarantor - which I find hard to believe - and fully intends to disappear leaving this mess behind him.
Does anyone have experience - will the landlord/agent persue the student who has pulled out for the rent or will he persue the remaining students for the full rent? There is also a clause that states late payment by a tenant will incur a charge of up to £20/month to each student until it's paid. So if the landlord persues the 'missing' student for their part of rent and this takes time then the others will be incurring additional charges unless they pay the rent in full between them. All advice appreciated.

anselld

The remaining three should focus on finding a replacement before the start of term. There are always people looking last minute.

It is the nature of joint and several that the remaining three are liable until a replacement is found. Guarantor liability depends on the exact wording of the guarantor deed. Who the L pursues first is anyone's guess.

saajan_12

Pamela_Dixon wrote: »

My Partner signed as guarantor for his son in a shared house for 2nd year at uni. 4 students were to share. Now one has pulled out. My partner believed he was only responsible for his son's rent and indeed the Deed of Guarantee states the guarantor percentage as 25%. -
what is the exact wording? 25% of the total rent? 25% of son's liability? However the contract for the property is 'joint and several' so I believe the remaining students (and their guarantors) are liable for the full rent - EACH student is liable for the full rent and full damages. The guarantors' liability depends on their guarantee. . The student who has pulled out is now saying he is not liable and signed the contract without a guarantor - which I find hard to believe - and fully intends to disappear leaving this mess behind him - Assuming the student signed the tenancy agreement, they are jointly and severally liable for the full rent & damages. The lack of guarantor doesn't change that, but the LL/agent may be more inclined to chase another student's guarantor if they have more funds. .

Does anyone have experience - will the landlord/agent persue the student who has pulled out for the rent or will he persue the remaining students for the full rent? - The LL CAN pursue any or all of the students/guarantors. They will most likely pursue the ones easiest to track down or with most funds. There is also a clause that states late payment by a tenant will incur a charge of up to £20/month to each student until it's paid- so it's £80/month? please quote the exact clause if you want help. . So if the landlord persues the 'missing' student for their part of rent and this takes time then the others will be incurring additional charges unless they pay the rent in full between them. - depends on the wording of the clause. Or, the remaining students could pay the full rent to avoid the late fee and chase the departed student later. All advice appreciated.

Advice..
- Quote the exact deed of guarantee (was it titled and executed as a 'deed' with signatures witnessed after the guarantors read the agreement?)
- Quote the exact terms of the late fee.
- Find another student to rent the extra room as a 'lodger' and pay 25% of the rent. No tax to pay if the 25% of rent is less that £7.5k.

eddddy

Realistically, the LL will take the easiest route to getting their money - and that's unlikely to involve tracing a student that's done a bunk. More likely, the LL will target the remaining tenants and their guarantors.

In other cases where this has happened, as a first step I've seen LLs send a letter to all tenants and guarantors saying something like:

John Smith has not paid his rent. As a group, I suggest that you find a way of resolving this, otherwise...

And the combination of peer pressure, parental pressure, embarrassment, etc has made 'John Smith' see sense.

Pamela_Dixon

I need to check if the deed was executed. The deed of guarantee states : 'the tenant means - sons name- 'the agreed percentage means 25%'.
The late payment clause states:
If the Tenant fails to pay the rent by due date it shall on each occasion of late payment be required to pay the following charges to the Landlord on demand:
Payment overdue 7 days after rent due: Unpaid cheques:
Payment reminder letter:
Personal visit to the premises: Unauthorised individual rent payments
- £20.00 per tenant
- £31 on each occasion - £16 on each occasion - £16 on each occasion - £12 on each occasion

The tenancy is Joint and several. It seems confusing. Why does each student have a guarantor for their share of the rent if the overall contract means they are all equally liable. I am highly suspicious that the student who has pulled out now says she signed the contract and didn't require a guarantor and has no intent on paying. If all the others had to have guarantors surely they would too?

steampowered

It would help if you could post the exact wording of the "joint and several" clause, and the reference in the contract to "agreed percentage".

Pamela_Dixon

The ref to 25% share is on a seperate do ument titled 'deed of guarantee'. The contract for the property states : * If the Tenant defaults during the initial Term or any extension, renewal or continuation of this Agreement or the Tenant is declared bankrupt and the Tenant's Trustee in Bankruptcy elects to disclaim the Agreement then on written demand the Guarantor will cover and compensate the Landlord against all losses, claims, liabilities, costs and expenses arising out of or in connection with that default or disclaimer or incurred by the Landlord in connection with the default or disclaimer. 

* The Guarantor's liability under this Guarantee will be joint and several with the Tenant which means that each will be responsible for complying with the Tenant’s obligations under the Agreement both individually and together. The Landlord may seek to enforce these obligations and claim damages against the Tenant, the Guarantor, or both of them under this Guarantee. These obligations will not be cleared or affected by any act, neglect, leniency, or giving of time by the Landlord endeavouring to obtain payment or in the enforcement of the Tenant's covenants

On the above comtract it lists all 4 students but no reference is made to 25% share of each. Each parent has the same 'deed of guarantee' showing the ref to 25% share as previously mentioned.

silvercar

The remaining three should focus on finding a replacement before the start of term. There are always people looking last minute.

Ideal time of year, results day tomorrow in England & Wales, there will be plenty of people looking for student rooms.

G_M

It is a common complaint that parent guarantors are expected to guarantee the rent of other joint tenants in a student house. As you rightly point out, this is normally the case in 'joint & several' tenancies.

It appears that the landlord here is attempting (to his credit) tolimit a parent guarantor's liability to his/her offspring's share of the rent (25%).

However (without seeing the entire guarantor agreement) it seems to be a legally rather messy attempt. My conclusion is

* the 3 remaining tenants remain liable between them for the full rent (joint & several liability) unless they find a new tenant

* if they fail to pay, the LL could chase the guarantors. Such an action may or may not succeed if taken to its ultimate conclusion in court.

* one tenant has vanished/defaulted leaving 25% of the rent in arrears. the guarantors are liable for up to 25%

* but the intent of the guarantor agreement may be interpreted as being to limit liability to a specific tenant's share, so a court may determine there is no liability for the 'vanished' tenant's rent

* the entire guarantee agreement may be dismissed a) if not executed properly or b) if deemed unclear as to what exactly is being guaranteed

But you'd only find out if it went as far as court.

Advice?

* Find a replacement tenant

* failing that, the 3 remaining now have more space/more comfortable home - pay the full rent and avoid involvement of guarantors.

saajan_12

Pamela_Dixon wrote: »

I need to check if the deed was executed. The deed of guarantee states : 'the tenant means - sons name- 'the agreed percentage means 25%'.

Pamela_Dixon wrote: »

The ref to 25% share is on a seperate do ument titled 'deed of guarantee'. The contract for the property states : * If the Tenant defaults during the initial Term or any extension, renewal or continuation of this Agreement or the Tenant is declared bankrupt and the Tenant's Trustee in Bankruptcy elects to disclaim the Agreement then on written demand the Guarantor will cover and compensate the Landlord against all losses, claims, liabilities, costs and expenses arising out of or in connection with that default or disclaimer or incurred by the Landlord in connection with the default or disclaimer. 

* The Guarantor's liability under this Guarantee will be joint and several with the Tenant which means that each will be responsible for complying with the Tenant’s obligations under the Agreement both individually and together. The Landlord may seek to enforce these obligations and claim damages against the Tenant, the Guarantor, or both of them under this Guarantee. These obligations will not be cleared or affected by any act, neglect, leniency, or giving of time by the Landlord endeavouring to obtain payment or in the enforcement of the Tenant's covenants

On the above comtract it lists all 4 students but no reference is made to 25% share of each. Each parent has the same 'deed of guarantee' showing the ref to 25% share as previously mentioned.

This is all very confused. Please state clearly what the Deed of Guarantee only says in full.

Pamela_Dixon

The deed of guarantee: I have scanned this so text is jumbled and mispelled in places where OCR fails .
Tenants Name........
Guarantors name.......

l. the Agreed Percentage means 25 %,
the Tenancy Agreement means the tenancy agreement, a copy of which is annexed here together with any extension, renewal or continuation of it (whether as a fixed tem or a periodic tenancy), and
any other defined terms shall bear the meanings given to them in the Tenancy Agreement.
2, The Guarantor guarantees to the Landlord that theTenant shall pay the Agreed Percentage of the Rent and observe and perform the tenant covenants of the Tenancy Agreement and that if the Tenant fails to pay the Agreed Percentage of the Rent or to observe or perform any of the the
covenants, the Guarantor shall pay or observe and perform them.
3. The Guarantor covenants with the Landlord as principal obligor and as a separate and independe obligation and liability from its obligations and liabilities under clause 2 to indemnify and k indemnified the Landlord against any failure by the Tenant to pay the Agreed Percentage of the Ren
any failure to observe or perform any of the tenantrtenants of the Tenancy Agreement.
4.The liability of the Guarantor under clause 2 and clause 3 shall continue until the Tenancy Agreem
comes to an end and the Tenant is released from the tenant covenants of the Tenancy Agreement
thereafter for any period that the Tenant remains i
'IPoccupation of the Property.

5. The Guarantors liability will not be discharged by any variation of the Tenancy Agreement in relation to the amount of Rent payable, the parties to the Agreement or any other term thereof provided that the Guarantor is notified of the variation tn writing prior to it taking effect and the Guarantors obligations hereunder will then extend to the Tenancy Agreement as SO varied.
6. The Guarantor's liability will not be reduced discharged or otherwise limited or adversely affected
by
a'n ya n e a rn r a' i n n ra' e n tn'a' a'n n ea n
any time or indulgence granted by the Landlord to the Tenant,
any delay or forbearance by the Landlord in enforcing the payment of the Rent or the observance or performance of any of the tenant covenants of the Tenancy Agreement or in making any demand in r pact of them, or
the Landlord exercising any right or remedy against the Tenant for any failure to pay the Rent or to observe or perform the tenant covenants of the Tenancy Agreement
7. This Guarantee is irrevocable and shall continue beyond the Guarantor's death or bankruptcy.
8. If the Tenant is declared bankrupt and thelTenant's Trustee in Bankruptcy elects to disclaim the Tenancy Agreement then on written demand the Guarantor will pay and indemnify the Landlord against all losses, claims, liabilities, costs, legal fees and expenses arising out of or due to that disclaimer or incurred by the Landlord due to the disclaimer.
9. The Guarantor's liability under this Guarantee and the Tenancy Agreement will be joint and several with the Tenant which means that each will be responsible for complying with the Tenant's obligations under the Tenancy Agreement both as individuals and together. The Landlord may seek to enforce these obligations and claim damages against the Tenant, the Guarantor, or both of them under the Tenancy Agreement and the Guarantee
i.
10. If the Tenant surrenders any part of Rh? Property, the Guarantors liability will continue for the part not surrendered, Any liability accumulated at the date of surrender will continue unaffected.
11. The Guarantor will pay any costs of the Landlord in encoring the Guarantee and the obligations of the Tenancy Agreement whether or not court proceedings are taken.
12. If the Tenant fomls more than one person the guarantee created by this deed will not be invalidated if one or more of the original persons fomling the Tenant abandons the Property or surrenders their interest in the Tenancy Agreement provided that at least one of the persons forming the Tenant remains liable under the Tenancy Agreement or is still in occupation of the Property.