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Being chased for unpaid as a Guarantor.

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  • moneyistooshorttomention
    moneyistooshorttomention Posts: 17,940 Forumite
    edited 24 May 2018 at 7:26AM
    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 get exactly where OP is coming from and why they think they've only "guaranteed" the stated term of the tenancy.

    It does look like there might be a gap in the law currently and guarantors arent being specifically told "....by the way....the guarantee continues to apply even after the original officially-agreed term of tenancy".

    I would be asking this question if I were in OP's position. I can quite see it could go either way.
  • david1951
    david1951 Posts: 431 Forumite
    Fifth Anniversary Combo Breaker
    Could go either way.

    Normal situation is that tenants remain in the property after a fixed term, be it on another AST or a periodic, so a guarantor should expect that the tenant is likely to stay in the property and continue to act as such.

    However, the spirit of the contract is arguably not an open-ended guarantee for all future rent payments. The logical end of this guarantee is the end of the AST, not some unknown time at which the periodic tenancy ends. Should the landlord wish to continue with a guaranteed tenant, logic dictates that they should use another AST, not a periodic tenancy.

    On balance, I think the latter would hold true but that's just my opinion.

    It will also likely depend on the facts of the specific case.
  • AdrianC
    AdrianC Posts: 42,189 Forumite
    Eighth Anniversary 10,000 Posts Name Dropper
    david1951 wrote: »
    However, the spirit of the contract is arguably not an open-ended guarantee for all future rent payments.
    No, the more usual way for the landlord to deal with it would be to use the guarantee as a backstop to recover their losses once the tenant has been evicted for non-payment and/or left damage behind them.


    But the guarantor has agreed to what the guarantor has agreed to - and that's to cover the tenant's obligations during the tenancy. The tenancy continues.
  • Wicked_Lady
    Wicked_Lady Posts: 630 Forumite
    Eighth Anniversary 500 Posts Name Dropper Combo Breaker
    If you look at the agreement the rental cost is printed there; quite a lot of money, especially if it hasn't been paid for a while!
  • MassUk
    MassUk Posts: 15 Forumite
    Second Anniversary
    Update.

    The EA/LL's legal team never bothered coming after me. My Google law degree (a few days of constantly searching "guarantor liability") gave me enough material to deter them I think.

    They have however started legal proceedings against the tenant for the unpaid rent.

    Hope this thread is of benefit to others.
  • AdrianC
    AdrianC Posts: 42,189 Forumite
    Eighth Anniversary 10,000 Posts Name Dropper
    MassUk wrote: »
    Update.

    The EA/LL's legal team never bothered coming after me. My Google law degree (a few days of constantly searching "guarantor liability") gave me enough material to deter them I think.

    They have however started legal proceedings against the tenant for the unpaid rent.
    Which is definitely their first port of call. But if the tenant still leaves them out of pocket, they have six years from the debt becoming due to go after you.
  • From a practical perspective, do you have an agreement with the tenant so that they will reimburse you for money you pay out as their guarantor? You ought to have had that in place
  • davidmcn
    davidmcn Posts: 23,596 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    From a practical perspective, do you have an agreement with the tenant so that they will reimburse you for money you pay out as their guarantor? You ought to have had that in place
    I don't think you need to - it's implied by law (in the same way that joint and several liability is among joint borrowers/tenants etc - whoever pays more than their fair share is entitled to be reimbursed).
  • AdrianC
    AdrianC Posts: 42,189 Forumite
    Eighth Anniversary 10,000 Posts Name Dropper
    From a practical perspective, do you have an agreement with the tenant so that they will reimburse you for money you pay out as their guarantor? You ought to have had that in place
    If you need it, you're guaranteeing the wrong person.
  • MassUk
    MassUk Posts: 15 Forumite
    Second Anniversary
    AdrianC wrote: »
    Which is definitely their first port of call. But if the tenant still leaves them out of pocket, they have six years from the debt becoming due to go after you.


    :rotfl: I'll live.

    Their first port of call was very much myself, at which point I formally exercised my right to exit the the "alleged" guarantee. A chunk of the unpaid debt up to that point has been settled anyhow by the tennant but either way they have taken the view that there is little benefit in pursuing me (all but admitted to me by the EA).

    Anyways, to me :beer:
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