Guarantor question

saajan_12

ps124 wrote: »

Hi Guys,

Just a quick question about a gaurantor agreement I'm about to go ahead with. It's for a family friend, I understand the risks, and what it means to be a guarantor. However, the document has a lot of legal speak which im trying to go through line by line to decipher. The key bit im really keen to ensure is that the agreement is for 6 months only, after which I am free from the responsibilities of being a guarantor.

The agent sent me the document to sign but I asked him to amend a section to reflect the lenght of the contract. I have a few questions on what he has sent me:



Question 1:

Proposed Tenancy Start Date: 17th September 2018

Section 6. The tenancy is for a fixed term of 6 months, and this guarentee applies for the whole of the term and is not revocable during that term. - okay so min 6 months but you're fine with that The guarantor agrees to sign a new agreement as and when a new contract/fixed term is agreed. It states you must guarantee the next contract if they resign for 6 months. However I have my doubts regarding how enforceable this would be particualrly if they amend the terms of the new contract. Part of executing a guarantee requires you to have the opportunity to read and understand what you are guaranteeing.. how can you agree now to guarantee something you haven't seen and doesn't even exist yet..



I thought the last line was a bit flaky in that it makes it sounds like I have no choice but to agree a new period of being a guarantor should the person im guarenteeing decide to extend? Any thoughts?


Question 2
If the tenency becomes periodic or has become periodic by agreement or the operation of law, then this guarentee will continue until the tenant, landlord or agent serves the required notice and ends when the tenant leaves the proporty. - okay so you're still on the hook until the tenant leaves if they go periodic.
In this case, the guarentee may be terminated by written notice by the guarentor and the guarentee shall end on the earliest date when posssion is or can be legally obtained, subject to the Tenant vacting on this date. - so after 6 months, you can give notice and then the LL must evict the tenant and your liability ends when the tenant leaves. This could take another 4-6 months
If the tenenat fails to vacate the propoerty according to the landlords notice requireing possesion, then the guarentee shall continue until the tenant vacates. If, following notice by the guarentor, the landlord fails to take reasonable expedient steps to recover possesion, then the guarentee will end on the earliest date that this tenancy may be legally terminated by the landlord. - repeating the points earlier.. you're on the hook till tenant leaves. If you serve notice then LL should get going on evicting.
8. The gurantor will not be released from the liabilities arising under the Tenancy Agreement and the guarentee by any variation or amendment to the terms of the Tenancy provided that such variations or amendments are insubstantial and not prejudicial to the guarantor. - minor amendments don't release your guarantee.
This is where I get lost. I don't mind being a guarentor for 6 months, and then I want to be free from it. Does the legal jargon above imply in any way this may not be possible?



Please help?

I've tried to 'translate' some of the wording but essentially no, your liability does not terminate after 6 months. These are the possible outcomes
1) Tenant chooses to leave within 6 months -> your liability ends after 6 months.
2) LL & Tenant resign -> then you are expected to re-guarantee (I'm not sure this is enforceable)
3) Tenancy becomes periodic after 6 months -> You are liable indefinitely until tenant leaves
4) Tenancy becomes periodic after 6 months, you serve notice -> LL must get going with evicting the tenant through court, bailiffs etc. You are liable until tenant leaves (or until they should have left if LL was efficient with the eviction). Typically this would take another 4-6 months.

Essentially unless the tenant chooses to leave, you're certainly going to be liable much longer than 6 months.. closer to 4-6 months after you decide to end it (which can only be after the initial fixed term.

ps124 wrote: »

Yes, I know its a thankless task and I'm just taking on unecessary risk, but I was thinking as long as it's for 6 months in order to help this person, it might be ok. I mean the person's family are well off in thier home country, so in that sense it's fine. What do you guys think?

If they have well off family, could the family pay 6 months rent upfront - the LL might accept this instead of a guarantor. Or could the family pay you 12/24 months rent upfront, and you pay the LL. Technically you still guarantee the tenant, but you have the control.

Note you're not jsut guaranteeing the rent but ALL the tenant's obligations, including to not damage the property.

ps124

Thanks saajan and all for the assistance.



So my friend was asked to pay 6 months rent up front, but because she couldn't they asked for a UK guarantor. The reason she couldn't was because her parents have had to pay for her course (full overseas fees), travel, univerty expenses etc. so I can understand why her parents are struggling to pay a lump sum of 6 months rent - especially when they convert it from their currency to pounds. They have good jobs so they can pay monthly towards the rent, I have no doubt about that.



I accept there is a risk, but I wanted to minimise the risk as much as possible by having a break clause after 6 months. She intends to work as much as her visa allows her to, so after 6 months, the idea is her parents would have saved enough to pay towards the next 6 months rent and she could contribute towards that and I walk away.



However, it seems like the current agreement doesn't allow me to. So if I asked for the following to be removed:
The guarantor agrees to sign a new agreement as and when a new contract/fixed term is agreed.
Mainly because I specifically asked the agency to allow a break clause after 6 months


And ask them to re-word the following:


If the tenency becomes periodic or has become periodic by agreement or the operation of law, then this guarentee will continue until the tenant, landlord or agent serves the required notice and ends when the tenant leaves the proporty.


to say something along the lines of a new guarantor agreement must be signed/obtained for the tenancy agreement to become periodic because it ends after 6 months, would that work?



To be honest, I am not very concerned about her leaving after 12 months. She'll probably extend this by another 6 months, but I'm hoping she and her parents will be able to back her for the second 6 months.



Thoughts on this guys?

Craig1981

ps124 wrote: »

Yes, I know its a thankless task and I'm just taking on unecessary risk, but I was thinking as long as it's for 6 months in order to help this person, it might be ok. I mean the person's family are well off in their home country, so in that sense it's fine. What do you guys think?

if they are well off as you state, surely they can afford 6 months up front?

friends/family/money do not mix, IMHO.

Fosterdog

If you are happy to be guarantor would it be possible for you to lend her a lump sum to cover the six months advanced rent with her then paying you back monthly instead of paying the rent monthly with you as guarantor for an unspecified length of time? This way her parents could contribute some of the lump sum, she could contribute some and you just make up the difference, then in six months you said her parents will have enough to help her for the following six months.

It's not usually recommended to lend money to friends or family so only do so if you are willing to risk both the money and the friendship because you may well lose both and make sure you keep a paper trail of everything agreed.

csgohan4

I would not touch being a guarantor with a barge pole. OP reconsider being one.


https://forums.moneysavingexpert.com/discussion/5846251/being-chased-for-unpaid-as-a-guarantor

Vectis

This is the worst possible scenario for you as a guarantor, an overseas student who will disappear after a year with little hope of you recouping any loses - which is exactly why the LL wants a guarantor in the first place for the full 12 months (they would have even less chance than you of getting back unpaid rent or damages).

You may think you know these people but believe me, attitudes change when it comes to money.

And, please, don't go down the other suggested scenario of lending the money - there's a very good chance that you'll never see it again.

Really, this is the responsibility of the student and their family. If they can't afford to study here, then maybe they should look at alternatives. It's not your responsibility.

davidmcn

ps124 wrote: »

to say something along the lines of a new guarantor agreement must be signed/obtained for the tenancy agreement to become periodic because it ends after 6 months, would that work?

No, the tenancy agreement automatically becomes periodic. That's the law. Not sure what you think would happen to it otherwise anyway.

If you want the guarantee to cease having effect after 6 months then you'd need to state that in words of one syllable in the guarantee. But the landlord is likely not to go for that, as they'll have no way of knowing whether the tenant will be any more creditworthy (or another guarantor will step in) after 6 months, assuming she stays on.

poppasmurf_bewdley

This has disaster written all over it.

Seriously, you would have to be mad to agree to it.

Marvel1

ps124 wrote: »

Hi Guys,


Just a quick question about a gaurantor agreement I'm about to go ahead with.

The key bit im really keen to ensure is that the agreement is for 6 months only, after which I am free from the responsibilities of being a guarantor.

As you don't really want to be one, don't do it.

Computer_Beginner

The student doesn't NEED a guarantor. They don't NEED a tenancy. They can become a lodger instead.