Being chased for unpaid as a Guarantor.

MassUk

AdrianC wrote: »

You agreed to guarantee the tenant's obligations for the entire time they are a tenant.
They are still a tenant, but have been missing payments.

I don't see why you would think this is anything but exactly what you signed up to do...

I agreed to guarantee the tenants obligations for the 12 month term which expired 12 months ago. I did not sign up to anything that stipulated an ongoing obligation beyond this term. I appreciate the agreement became an ongoing periodic tenancy but will the court take the view that I am still liable given that;

- I did not sign a Deed of Guarantee
- only ever intended to act as a guarantor for a 12 month period
- the obligation beyond the fixed term was not made clear to me in the agreement
- neither was it communicated that the tenant has moved to an ongoing periodic tenancy.

saajan_12

MassUk wrote: »

Hi,

Really could do with some advice on my situation.

I was a guarantor for a tenancy agreement which expired in May last year. - the fixed term may have expired, the tenancy continues (as periodic) with the same terms until ended by the tenant or a court. The AST agreeement contained only two clauses pertaining to the guarantor. 1) guaranteeing the tennant obligations under the agreement and 2) Making payment on demand if the tenant is unable to. - what exactly were you named as and what did you sign? Please quote the definitions of "Landlord", "Tenant", "Guarantor" and any other roles as stated in the AST agreement. Usually your responsibility should be stated in a Deed of Guarantee (explicitly stated as a deed, your signature being witnessed) but you may have been a party to the actual tenancy agreement?

The tenant is still in the property under an ongoing periodic tenancy agreement, this has been the case for 12 months without my knowledge. The original AST agreement makes no reference to this although I do now understand it!!!8217;s the law. - yes, the tenancy continues with all terms / clauses as they were during the fixed term - so the clauses about the guarantor are as valid now as they were during the fixed term.

I was not presented with nor did I sign a separate deed of guarantee.- this would be the usual way of memorialising a guarantor's responsibility, but its possible you were party to the actual tenancy agreement.

The landlord!!!8217;s agent is chasing me for missed rent payments pertaining to months well after the initial term had finished last year. - Have you checked with the tenant whether and why they missed payments? Can they make them up? As it may or may not be your responsibility but it certainly is the tenants' responsibility.

What is my legal position? I beleive the LL/EA should have specified any ongoing liability after the original term - no, assuming you had sight of the agreement, the fact that any liability would be ongoing is statutory law, so they wouldn't need to highlight this separately. in the form of a Deed or captured it in the original AST agreement. - yes, its possible the terms in the original AST aren't sufficient and a Deed may be necessary. Or it may not - please upload the whole agreement.

Thanks.

Please quote / upload the whole agreement (changing names & addresses). Its possible you were party to the original tenancy agreement and jointly liable for the rent / damages.

The tenancy continues until ended by the tenant or a court, so it makes no difference to your liability as a guarantor whether the missing payments were during the fixed term or while the tenancy is periodc.

AdrianC

MassUk wrote: »

I agreed to guarantee the tenants obligations for the 12 month term which expired 12 months ago. I did not sign up to anything that stipulated an ongoing obligation beyond this term.

That would be a very, very unusual tenancy whereby a move to a statutory periodic invalidated a guarantee. The default would be that the guarantee is valid for the entirety of the tenancy.

I appreciate the agreement became an ongoing periodic tenancy but will the court take the view that I am still liable given that;

- I did not sign a Deed of Guarantee

You did not sign an explicit one, no - but you did sign to contractually agree to guarantee the tenancy.

- only ever intended to act as a guarantor for a 12 month period
- the obligation beyond the fixed term was not made clear to me in the agreement

Then you should probably have sought advice to be clear as to what you were agreeing to.

- neither was it communicated that the tenant has moved to an ongoing periodic tenancy.

The tenancy is the exact same tenancy that you signed. It simply automatically changed to a statutory periodic tenancy on the expiry of the original fixed period, as all ASTs do at the expiry of the fixed period. The clue is in "statutory".

Rambosmum

MassUk wrote: »

I agreed to guarantee the tenants obligations for the 12 month term which expired 12 months ago. I did not sign up to anything that stipulated an ongoing obligation beyond this term. I appreciate the agreement became an ongoing periodic tenancy but will the court take the view that I am still liable given that;

- I did not sign a Deed of Guarantee unlikely to be a get out, as you clearly have signed something
- only ever intended to act as a guarantor for a 12 month period unless this is stipulated on the agreement you signed, you actually agreed to do it for the length of the tenancy
- the obligation beyond the fixed term was not made clear to me in the agreement It's the law, it doesn't need to be made clear - it's up to you to research your obligations and rights.
- neither was it communicated that the tenant has moved to an ongoing periodic tenancy. Again, this is the law, it doesn't need to be communicated to you - you would be expected to assume this if you were not notified they moved out/ asked to sign to be guarantor again

Without seeing the whole document it's difficult to say whether you are liable, but from what you have said I would think you are.


You could wait for court, but if it doesn't go in your favour (and I doubt it will) it would be increased costs for you. You could then pursue the tenant but that won't remove the CCJ.


Have you spoken with the tenant?

Pixie5740

I think that if the guarantee is part of the tenancy agreement then it doesn't have to be executed as a deed. Tessa Shepperson seems to think so too.

http://www.landlordlawblog.co.uk/2017/03/08/tenancy-agreements-33-days-tips-day-9-guarantees/

Tessa also has the view that if there is nothing to the contrary in the contract, then the guarantor's liability ends when the fixed term ends. I'm not so sure about that but then again I'm not a lawyer and Tessa is a solicitor who specialises in housing law.

http://www.landlordlawblog.co.uk/2016/06/02/questions-guarantee-deeds-tenancies/

saajan_12

MassUk wrote: »

I agreed to guarantee the tenants obligations for the 12 month term which expired 12 months ago. - in writing, you agreed to guarantee the tenant's obligations full stop. Those obligations are to pay rent and not damage the property for the duration of the tenancy, which is a fixed term + periodic. I did not sign up to anything that stipulated an ongoing obligation beyond this term. - You did, the AST agreeement is an ongoing obligation by default, until ended by the tenant or a court.
I appreciate the agreement became an ongoing periodic tenancy but will the court take the view that I am still liable given that;

- I did not sign a Deed of Guarantee - okay, but you may have been party to the tenancy agreement itself - pls post this or further discussion is just going in circles.
- only ever intended to act as a guarantor for a 12 month period - that might be your intention but wasn't what you signed.
- the obligation beyond the fixed term was not made clear to me in the agreement - as long as you had sight of the tenancy agreement, you were made sufficiently aware as the 'beyond fixed term' bit is statutory law.
- neither was it communicated that the tenant has moved to an ongoing periodic tenancy.- that was automatically as a result of time moving on and the tenant NOT taking action by serving notice / moving out. There's no obligation for the LL / agent / tenant to communicate to you, and it would be silly to expect them to tell you every day that the tenant doesn't serve notice!

Please quote the full tenancy agreement or further discussion is futile. The fixed term / periodic makes NO DIFFERENCE, the tenancy is ongoing and you are either liable for the obligations throughout or not at all. The only question is whether the clauses in the agreement are sufficient to make you party to the agreement and give you the responsibilities of rent/tenants obligations. .

seashore22

As someone has already asked, have you spoken to the tenant?

I am wondering how well you know this person (you didn't know that they were still living at the property and didn't know that they hadn't been paying their rent) and why you agreed to be a guarantor for them.

The only people I would agree to be a guarantor for are my two adult children because I would always help them out if they got into difficulty anyway. We did act as guarantors for our youngest when she was at uni (as many parents have to) and for her first home after leaving uni and i was absolutely fine. But then again she is very good with money and we knew it would only be down to extreme circumstances if she did default.

I know that's a bit pointless now considering the current problem, but it might help someone else considering doing what the op has done.

ScorpiondeRooftrouser

seashore22 wrote: »

As someone has already asked, have you spoken to the tenant?

I am wondering how well you know this person (you didn't know that they were still living at the property and didn't know that they hadn't been paying their rent) and why you agreed to be a guarantor for them.

The only people I would agree to be a guarantor for are my two adult children because I would always help them out if they got into difficulty anyway. We did act as guarantors for our youngest when she was at uni (as many parents have to) and for her first home after leaving uni and i was absolutely fine. But then again she is very good with money and we knew it would only be down to extreme circumstances if she did default.

I know that's a bit pointless now considering the current problem, but it might help someone else considering doing what the op has done.

The difference in being a guarantor for your children, particularly at university, is that not only are you perfectly prepared to pay the rent for them if they can't pay it themselves (for whatever reason) but in a lot of cases you are the one giving them the money to pay it in the first place.

seashore22

ScorpiondeRooftrouser wrote: »

The difference in being a guarantor for your children, particularly at university, is that not only are you perfectly prepared to pay the rent for them if they can't pay it themselves (for whatever reason) but in a lot of cases you are the one giving them the money to pay it in the first place.

Yes that was the point I was making. Only be a guarantor in exceptional circumstances and where you are happy to pay out if necessary. The op doesn't seem happy to be paying out, does he?

ScorpiondeRooftrouser

seashore22 wrote: »

Yes that was the point I was making. Only be a guarantor in exceptional circumstances and where you are happy to pay out if necessary. The op doesn't seem happy to be paying out, does he?

No, he doesn't. Not sure why you are asking me that.