Guarantor issue

JackTait

Hi all 

I’m asking for a friend, she’s in a bit of a pickle. 

She agreed to be a guarantor for a friend, the relationship soured and she had to cover a couple of months rent. 

The original tenancy was for 12 months, this was up in March. It’s come to light the tenancy has been extended for another 12 months. The guarantor was not informed. 

She was recently copied into an email chain by the letting agent, where the tenant is two months behind on rent. 

In the original agreement, it does specify that the guarantor is liable for any extensions. 

Obviously, mistakes have been made in terms of agreeing to it in the first place. 

Does anyone have some advice or suggestions. Obviously she wants out ASAP. Should she have been informed about the extension? Should the agreement have been extended with a history or missed/late payments? How can she get out ASAP? 

Thanks in advance 

[Deleted User]

Possibly, she should have been consulted, but the way it stands currently is that the guarantor position ending is a conversation between her, the other person and whichever body/landlord your friend is vouching for.

It's this that needs to be done asap.

The friend will then be means tested by that body - if she can't afford it the body will not offer its services and her tenancy will end.

The mistake or blame by that body will be secondary to getting your friend off the guarantor status.

silvercar

Guarantor agreements are often set up this way. Otherwise a tenant could remain after the fixed term, stop paying rent and the guarantee period have ended, leaving the landlord with no comeback.

The guarantor needs to have a strong conversation with the tenant. The guarantee position can only be ended by one of the following:
a) the tenancy ending and the tenant leaving.
b) the landlord agreeing to enter into a new tenancy agreement with the existing tenant without a guarantor.

macman

With a guarantor in place, the LL would have been only too happy to grant a new fixed term tenancy!
All she can do is inform the LL that she will not pay any arrears unless they take her to court to enforce the terms of the guarantee, which means that the LL will have to wait many months for payment. With that knowlege, they are unlikely to grant a further extension.
In the meantime, she is unfortunately exposed to a potential further 7 months worth of  rent debt. plus the outstanding 2 months.

anselld

macman said:

With a guarantor in place, the LL would have been only too happy to grant a new fixed term tenancy!
All she can do is inform the LL that she will not pay any arrears unless they take her to court to enforce the terms of the guarantee, which means that the LL will have to wait many months for payment. With that knowlege, they are unlikely to grant a further extension.
In the meantime, she is unfortunately exposed to a potential further 7 months worth of  rent debt. plus the outstanding 2 months.

Possibly, although if the L just goes down the MCOL route against the Guarantor for the arrears it could end up as CCJ a lot quicker than that.

macman

anselld said:

macman said:

With a guarantor in place, the LL would have been only too happy to grant a new fixed term tenancy!
All she can do is inform the LL that she will not pay any arrears unless they take her to court to enforce the terms of the guarantee, which means that the LL will have to wait many months for payment. With that knowlege, they are unlikely to grant a further extension.
In the meantime, she is unfortunately exposed to a potential further 7 months worth of  rent debt. plus the outstanding 2 months.

Possibly, although if the L just goes down the MCOL route against the Guarantor for the arrears it could end up as CCJ a lot quicker than that.

It could, but the OP's friend has no  good options here: it's just about attempting some damage limitation I suppose.

pinkshoes

JackTait said:

Hi all 

I’m asking for a friend, she’s in a bit of a pickle. 

She agreed to be a guarantor for a friend, the relationship soured and she had to cover a couple of months rent. 

The original tenancy was for 12 months, this was up in March. It’s come to light the tenancy has been extended for another 12 months. The guarantor was not informed. 

She was recently copied into an email chain by the letting agent, where the tenant is two months behind on rent. 

In the original agreement, it does specify that the guarantor is liable for any extensions. 

Obviously, mistakes have been made in terms of agreeing to it in the first place. 

Does anyone have some advice or suggestions. Obviously she wants out ASAP. Should she have been informed about the extension? Should the agreement have been extended with a history or missed/late payments? How can she get out ASAP? 

Thanks in advance 

Well at least the landlord informed her of the arrears, which is more than a previous case on here had!

She needs to speak to the landlord ASAP and tell them to issue an eviction notice to the tenant, make it clear that she no longer has a relationship with the tenant, and no longer wants to be guarantor for them.

Make it clear that she will pay arrears once the tenant is evicted - that way it gives the tenant chance to pay all arrears. She doesn't want to pay them at the moment as otherwise the landlord can't evict the tenant for non payment of rent!

Ultimately she will potentially need to pay all arrears, then take the "friend" to court if they won't pay the money back.

macman

A landlord can't issue an 'eviction notice', only a court can do that. In this instance, the LL apparently granted a new 12m fixed term tenancy in March, so they cannot give notice by way of a S21 until that fixed term expires. 
If the tenant remains 2m in arrears, then the LL can issue an S8, but, since there is a guarantor in place, the LL will be able to seek to recover the arrears from them.
You can't get out of a contract just because you no longer 'want to be a guarantor'. Nor would the friend be able to take the tenant to court to recover funds paid in her role as guarantor. 
When you agree to be a guarantor, you are basically signing an undated blank cheque.

Alderbank

We've not heard much about the tenant. Is she OK? Is she ill? Is she even still alive?
Has the guarantor visited her for a chat and to discuss how things are going and whether she intends to pay any more rent?
Other posters have said that the guarantor can sue the tenant, but apart from the practical issue of whether the tenant actually has funds to pay the back rent, what is the legal basis for this? Surely the guarantor has freely entered into an agreement to pay the rent?

JackTait

Thanks for the advice so far. As I thought, not a whole lot that can be do to resolve this. Purely about mitigation at this point. 

To give more background on the tenant. She shares the property with her partner. They recently broke up, and it seems as though the partner has stopped paying. The relationship soured after an original episode of missed payments last year resulted in my friend stumping up two months rent. She was promised full payment back, this didn’t happen and indeed got abuse for asking for a payment back. There has been minimal contact since. The email chain includes an email from the tenant stating she has been in hospital. Although she said the same last time payments were missed, we know this to not be true. In the same chain after one missed payment, she said she was at work at couldn’t transfer the money until the end of her shift. It’s only after the second payment was missed that she brought up the hospital. 

Apparently the partner of the tenant has tried to get removed from the agreement but the letting agent obviously refused. Interestingly, the tenant’s partner’s Dad is a guarantor for her. 

Let’s say a £7k ish debt is incurred. Presumably all 4 are liable? Or just the two guarantors? I’m guessing it doesn’t necessarily get split? I would presume they chase where they think they have the best chance of getting paid? 

anselld

There is a very slim chance that each guarantor signed a limited liability deed for an individual tenant's share of the rent; check the deed wording.  Normally, however, joint and several liability means they can chase any of them for the full amount.