Guarantor

Nicki48

Just looking for thoughts and advice please. I'm 48 with a 23 year old son who is very irresponsible with money. Since the age of 18 I've given into his requests for constant financial help, he did 3 years at uni but never got past year one so has student debt with nothing to show for it and is £1000 overdrawn on his student bank account which he no longer uses
He works 2/3 nights per week in a nightclub and last Oct I stupidly agreed to be a guarantor for his rent, he is sharing a flat with a friend, this,was on the understanding that he would get full time work ASAP. This hasn't happened so every month I've transferred to him half or more of the cost of the rent and bills. I also pay his monthly phone bill. I am single, work full time but don't earn a massive amount. Since Nov I was doing overtime to cover all this bit this is no longer available.  It is impacting on my life, I cancelled social events around Xmas and darent spend money on anything non essential.  He has another job now for a minimum of 20 hours per week starting next week.
My dilemma is do I carry on paying this even if I have to take out loans or do I refuse to help any more so he learns a lesson but I know my credit score would immediately plummet and I'd still owe the money anyway. 

canaldumidi

If you have a valid guaratnor agreement on his tenancy, then any rent arrears he builds up will become your legal liability. Likewise any damage he causes to his flat can be claimed against you by his landlord.

The guarantee agreement you signed, please confirm:

* you were given a copy of his tenancy agreement before signing the Guarantee Agreement?

* your signiture on the GA was witnessed

* the GA was Executed as a Deed

* the precise wording of the GA

As for other support you provide eg phone bill, it's time to stop! If he can't afford a phone he should not have one.

elsien

If he doesn’t pay the rent then you are liable, but all the other bills - utilities, mobile, food etc are his responsibility. Stop paying them. 

However if he stops paying and the landlord does eventually start chasing you for rent then pay it directly to  the landlord, not to him. At the moment you are enabling him and he has no incentive to work longer hours. 

Have you actually sat him down and shown him the figures and the impact this is having on you? There’s a difference between an “I can’t afford it” while you’re still paying  the nonessentials such as his mobile (just, why??) and him seeing in black and white that you are in debt because of him. 

Does this guarantor agreement have any sort of get out clause? 

newsgroupmonkey_

Are you guarantor for the friend too?

Or are you just paying your son's half?

Nicki48

Just paying my son's half. The only way to get put of it early is if he found someone to take his place in the flat.

MEM62

Nicki48 said:

last Oct I stupidly agreed to be a guarantor for his rent, he is sharing a flat with a friend, 

Given his history you probably knew at the time that this was not a good idea but what's done is done. You are now in a position where, if you do not keep bailing him out, the landlord will come to you to fulfil you guarantor responsibilities.  So either way you are going to end up paying. 

Your son will also have learnt nothing about standing on his own two feet.    

Nicki48 said:

My dilemma is do I carry on paying this even if I have to take out loans or do I refuse to help any more so he learns a lesson but I know my credit score would immediately plummet and I'd still owe the money anyway. 

I think you have no choice but to keep paying until the lease expires.  When does his AST end?  When it does, please do not renew your obligation a guarantor.  

Slithery

MEM62 said:

I think you have no choice but to keep paying until the lease expires.  When does his AST end?  When it does, please do not renew your obligation a guarantor.  

That's not how it works. OP will remain a guarantor until the son no longer lives in the property, no matter how many years that ends up being.

martindow

MEM62 said:

I think you have no choice but to keep paying until the lease expires.  When does his AST end?  When it does, please do not renew your obligation a guarantor.  

I suspect that the end of the fixed term will not be the end of the OP's liability.  The tenancy will continue as a periodic tenancy, so being a guarantor will probably also continue.

Sandtree

Can a guarantor be just for one part? My experience of tenancy agreements were that all tenants were jointly and severally liable for the rent in shared accommodation and as such doesnt the guarantee do the same?

Given the guarantor isnt party to the AST are there any ways for the guarantor to terminate? Obviously that means the tenant(s) should leave if the LL isnt comfortable with continuing the tenancy without a guarantor  but that clearly is an independent consideration 

canaldumidi

Nicki48 said:

Just paying my son's half.

You know this or you are assuming this? It is very unlikely if the two of them have a joint and several tenancy. Do they have a J&S tenancy, or does each tenant have a separate tenancy in teir single name?

Until you answer this and the questions I posed earlier it remains impossible to say.

Sandtree said:

Given the guarantor isnt party to the AST are there any ways for the guarantor to terminate? Obviously that means the tenant(s) should leave if the LL isnt comfortable with continuing the tenancy without a guarantor  but that clearly is an independent consideration 

No, of course not. As you say, the G is not party to the AST so cannot serve notice to end it. Nor can the G terminate his guarantee agreement (which would make such agreements pontless) unless the terms allow this (which I've never seen).

This all assumes, as said earler, that the GA is valid, which the OP has yet to confirm.

Sandtree

canaldumidi said:
Nor can the G terminate his guarantee agreement (which would make such agreements pontless) unless the terms allow this (which I've never seen).

This all assumes, as said earler, that the GA is valid, which the OP has yet to confirm.

I agree it would devalue its worth but to say its pointless is a little bit of an exaggeration. I've dealt with other security contracts/deeds outside of tenancy agreements and they did have termination clauses but typically with long notice periods and the provider of the security picking up the reasonable costs of the other side in terms of responding to the loss of protection. 

I'll bow to your experience to say that its exceptionally uncommon for termination clauses 

If I was being cynical I'd suggest the kinds of things it would need to include to make it still attractive/valuable to the landlord would raise more red flags to the guarantor than having no cancellation right, which technically doesnt need to be spelt out. From a brief google the execution of these things dont always appear to be as informed as they probably should be even if meeting the legal requirements for a deed (eg witness as there is no consideration to be able to make it a contract)