Guarantor Debt

theartfullodger

propertyrental said:

Dear Mr LL

I am writing to inform you that the guarantee agreementNo purported to exist supporting XYZ's tenancy at (address) is invalid.

The agreement was not Executed as a Deed. None of the relevant signitures were witnessed, and I was not provided with a copy of the associated tenancy agreement prior to being asked to sign.

Having taken advice, please be advised therefore that should any claim be made against me based on the purported guarantee agreement, I shall defend the claim, in court if necessary.

yours etc

Just a suggestion

No.  We don't know if Landlord will proceed to court or not.

Only raise this issue if court papers arise.

AFAIK we don't yet know which country this is in.  Not all require deeds.

Plus depending on how tenancy/guarantee agreement are written still may be enforceable (in England..)

Flopfluppet

Thank you so much, this seems great advice. I will get him to draft a letter as above and send it to LL. 
I'll let you know what happens. 

Flopfluppet

Forgot to add that the paperwork for SS to sign which was done online, was signed by his wife not SS.  But he is named as guarantor.  I believe she signed his name but it's not his signature.  

Grumpy_chap

Flopfluppet said:

Forgot to add that the paperwork for SS to sign which was done online, was signed by his wife not SS.  But he is named as guarantor.  I believe she signed his name but it's not his signature.  

That is an untidy extra piece of information.

On the one hand it could tie in to the Guarantor-ship as invalid.
On the other, the LL could view that as fraudulent.

I have no idea which would take precedence.

theartfullodger

Grumpy_chap said:

Flopfluppet said:

Forgot to add that the paperwork for SS to sign which was done online, was signed by his wife not SS.  But he is named as guarantor.  I believe she signed his name but it's not his signature.  

That is an untidy extra piece of information.

On the one hand it could tie in to the Guarantor-ship as invalid.
On the other, the LL could view that as fraudulent.

I have no idea which would take precedence.

Judge would decide if it gets to court 

Flopfluppet

Hmm I don't think there was any reason she signed it other than apparently SS was very busy at work and the documents had to be back quickly for various reasons. 
So I think it may be better to get legal advice before mentioning that if it goes to court.

newsgroupmonkey_

user1977 said:

newsgroupmonkey_ said:

propertyrental said:

As guarantor, you are not a party to any contract - you receive nothing ('consideration' is the legal term). So guarantee agreements have to be created as a 'Deed'. As such

* the guaarantor must know what the Deed involves - so must have been shown the tenancy agreement they are guaranteeing before they sign

* The deed should say it is a deed

* The signitures should be witnessed.

Having said that, some judges will enforce guarantee agreements that don't meet these strict legal criteria if the intention was clear to all parties - depends on the judge. But arguing that a guarantee agreement is invalid (as above) would make a judge stop and think.

Flopfluppet said:

...
OK so my step son acted as guarantor for his employee on his tenancy agreement. The tenancy was initially for 12 months and SS assumed he would only be guarantor for the 12 months.  Had he have actually read what he was signing the small print effectively said he would be acting as guarantor the whole time the tenant lived at the property. 

This is normal.

The first 12 months have now passed with no issues. However this employee/tenant no longer works for SS as he went off the rails, got into drugs and ended up on benefits.  He gets housing benefit which the Landlord gets direct but the is a shortfall of a little over £100 per month, which he refuses to pay. So cutting a long story short, although the landlord is very reasonable with SS, the letting agent wants the shortfall (naturally) paying. 

the tenancy is between the tenant and landlord. The agent just acts for the LL and has to do what the LL instructs, so it is the LL that matters here.

There is no reason to evict the tenant

Errr  £100 per month rent arrears building up.....?

although the LL has said they would consider saying they want the property back to live in and starting eviction proceedings 

LL could use S8 (rent arrears) or S21 (no reason needed)

because he has been told this but refuses to find somewhere else to live. well if  heb is evicted he'll have no choice

SS has been to see tenant to talk it out and threatened  him with a hammer.  Ooops! Silly SS! Police were called, the drug use was also reported and so far the police have done nothing. What, about SS threatening tenant wth hammer, or the drugs?
SS said he hasn't taken legal advice because what he signed gives him no get out. I think he should, just in case.

See above

In the end if the LL doesn't/can't evict him, which could take 12 months racking up more debt for SS, the tenant could stay there indefinitely having the shortfall in his rent paid by SS.  It could go on for years like this.
Please, do you have any advice?

SS should get the guarantee agreement checked.

Little else he can do - it's up to the LL whether to

• 
  
• do nothing and accept the shortfall
• evict the tenant for rentb arrears
• evict the tenant for... no reason needed, or
• sue SS for the arrears (and hope the guarantee agreement stands up in court)

https://www.davidandrew.co.uk/downloadable-forms/Sample-Deed-of-Guarantee.pdf

And surely, if the tenant isn't paying, then it should be up to the landlord to minimise the cost to the guarantor.

I mean, if they didn't, the guarantor could be expected to pay 100% of the rent for ever. The guarantor can't evict the tenant and whilst they could countersue, the tenant doesn't have any money.

I'm not aware of there being any general obligation on the landlord to do so.

(though obviously, they might choose to take steps to end the tenancy)

There may not be any obligation, but I can't see a Judge being particularly impressed when the Landlord tries to get the money out of the guarantor.

They don't like things like that.

Grumpy_chap

newsgroupmonkey_ said:

user1977 said:

newsgroupmonkey_ said:

propertyrental said:

As guarantor, you are not a party to any contract - you receive nothing ('consideration' is the legal term). So guarantee agreements have to be created as a 'Deed'. As such

* the guaarantor must know what the Deed involves - so must have been shown the tenancy agreement they are guaranteeing before they sign

* The deed should say it is a deed

* The signitures should be witnessed.

Having said that, some judges will enforce guarantee agreements that don't meet these strict legal criteria if the intention was clear to all parties - depends on the judge. But arguing that a guarantee agreement is invalid (as above) would make a judge stop and think.

Flopfluppet said:

...
OK so my step son acted as guarantor for his employee on his tenancy agreement. The tenancy was initially for 12 months and SS assumed he would only be guarantor for the 12 months.  Had he have actually read what he was signing the small print effectively said he would be acting as guarantor the whole time the tenant lived at the property. 

This is normal.

The first 12 months have now passed with no issues. However this employee/tenant no longer works for SS as he went off the rails, got into drugs and ended up on benefits.  He gets housing benefit which the Landlord gets direct but the is a shortfall of a little over £100 per month, which he refuses to pay. So cutting a long story short, although the landlord is very reasonable with SS, the letting agent wants the shortfall (naturally) paying. 

the tenancy is between the tenant and landlord. The agent just acts for the LL and has to do what the LL instructs, so it is the LL that matters here.

There is no reason to evict the tenant

Errr  £100 per month rent arrears building up.....?

although the LL has said they would consider saying they want the property back to live in and starting eviction proceedings 

LL could use S8 (rent arrears) or S21 (no reason needed)

because he has been told this but refuses to find somewhere else to live. well if  heb is evicted he'll have no choice

SS has been to see tenant to talk it out and threatened  him with a hammer.  Ooops! Silly SS! Police were called, the drug use was also reported and so far the police have done nothing. What, about SS threatening tenant wth hammer, or the drugs?
SS said he hasn't taken legal advice because what he signed gives him no get out. I think he should, just in case.

See above

In the end if the LL doesn't/can't evict him, which could take 12 months racking up more debt for SS, the tenant could stay there indefinitely having the shortfall in his rent paid by SS.  It could go on for years like this.
Please, do you have any advice?

SS should get the guarantee agreement checked.

Little else he can do - it's up to the LL whether to

• 
  
• do nothing and accept the shortfall
• evict the tenant for rentb arrears
• evict the tenant for... no reason needed, or
• sue SS for the arrears (and hope the guarantee agreement stands up in court)

https://www.davidandrew.co.uk/downloadable-forms/Sample-Deed-of-Guarantee.pdf

And surely, if the tenant isn't paying, then it should be up to the landlord to minimise the cost to the guarantor.

I mean, if they didn't, the guarantor could be expected to pay 100% of the rent for ever. The guarantor can't evict the tenant and whilst they could countersue, the tenant doesn't have any money.

I'm not aware of there being any general obligation on the landlord to do so.

(though obviously, they might choose to take steps to end the tenancy)

There may not be any obligation, but I can't see a Judge being particularly impressed when the Landlord tries to get the money out of the guarantor.

They don't like things like that.

On what basis do you say that?

The whole idea of requesting a Guarantor is that the LL would not agree the tenancy to the Tenant without a second individual underwriting the commercial risk.  
In the extreme, that could mean the T fails to make payments from the get-go, at which point the Guarantor becomes liable.  The LL would have no grounds (or reason of choice) to commence eviction proceedings assuming the Guarantor makes the payments.
Should the T plus the Guarantor fail to make rent payments, then the LL would have reasons to commence eviction proceedings - that would also result in the credit record of both the T plus the Guarantor being negatively impacted.

Essentially - the LL by requesting the Guarantor is saying at the outset "I don't believe this T will pay".
The Guarantor is saying "I do believe this T will pay, and I'll put my money where my mouth is so agree to pay if the T fails"
If the LL had a duty to immediately commence eviction proceedings if the T failed to pay (but the Guarantor stepped in), then the LL might as well do away with the whole Guarantor process and simply refuse the tenancy from the outset.

newsgroupmonkey_

Grumpy_chap said:

newsgroupmonkey_ said:

user1977 said:

newsgroupmonkey_ said:

propertyrental said:

As guarantor, you are not a party to any contract - you receive nothing ('consideration' is the legal term). So guarantee agreements have to be created as a 'Deed'. As such

* the guaarantor must know what the Deed involves - so must have been shown the tenancy agreement they are guaranteeing before they sign

* The deed should say it is a deed

* The signitures should be witnessed.

Having said that, some judges will enforce guarantee agreements that don't meet these strict legal criteria if the intention was clear to all parties - depends on the judge. But arguing that a guarantee agreement is invalid (as above) would make a judge stop and think.

Flopfluppet said:

...
OK so my step son acted as guarantor for his employee on his tenancy agreement. The tenancy was initially for 12 months and SS assumed he would only be guarantor for the 12 months.  Had he have actually read what he was signing the small print effectively said he would be acting as guarantor the whole time the tenant lived at the property. 

This is normal.

The first 12 months have now passed with no issues. However this employee/tenant no longer works for SS as he went off the rails, got into drugs and ended up on benefits.  He gets housing benefit which the Landlord gets direct but the is a shortfall of a little over £100 per month, which he refuses to pay. So cutting a long story short, although the landlord is very reasonable with SS, the letting agent wants the shortfall (naturally) paying. 

the tenancy is between the tenant and landlord. The agent just acts for the LL and has to do what the LL instructs, so it is the LL that matters here.

There is no reason to evict the tenant

Errr  £100 per month rent arrears building up.....?

although the LL has said they would consider saying they want the property back to live in and starting eviction proceedings 

LL could use S8 (rent arrears) or S21 (no reason needed)

because he has been told this but refuses to find somewhere else to live. well if  heb is evicted he'll have no choice

SS has been to see tenant to talk it out and threatened  him with a hammer.  Ooops! Silly SS! Police were called, the drug use was also reported and so far the police have done nothing. What, about SS threatening tenant wth hammer, or the drugs?
SS said he hasn't taken legal advice because what he signed gives him no get out. I think he should, just in case.

See above

In the end if the LL doesn't/can't evict him, which could take 12 months racking up more debt for SS, the tenant could stay there indefinitely having the shortfall in his rent paid by SS.  It could go on for years like this.
Please, do you have any advice?

SS should get the guarantee agreement checked.

Little else he can do - it's up to the LL whether to

• 
  
• do nothing and accept the shortfall
• evict the tenant for rentb arrears
• evict the tenant for... no reason needed, or
• sue SS for the arrears (and hope the guarantee agreement stands up in court)

https://www.davidandrew.co.uk/downloadable-forms/Sample-Deed-of-Guarantee.pdf

And surely, if the tenant isn't paying, then it should be up to the landlord to minimise the cost to the guarantor.

I mean, if they didn't, the guarantor could be expected to pay 100% of the rent for ever. The guarantor can't evict the tenant and whilst they could countersue, the tenant doesn't have any money.

I'm not aware of there being any general obligation on the landlord to do so.

(though obviously, they might choose to take steps to end the tenancy)

There may not be any obligation, but I can't see a Judge being particularly impressed when the Landlord tries to get the money out of the guarantor.

They don't like things like that.

On what basis do you say that?

The whole idea of requesting a Guarantor is that the LL would not agree the tenancy to the Tenant without a second individual underwriting the commercial risk.  
In the extreme, that could mean the T fails to make payments from the get-go, at which point the Guarantor becomes liable.  The LL would have no grounds (or reason of choice) to commence eviction proceedings assuming the Guarantor makes the payments.
Should the T plus the Guarantor fail to make rent payments, then the LL would have reasons to commence eviction proceedings - that would also result in the credit record of both the T plus the Guarantor being negatively impacted.

Essentially - the LL by requesting the Guarantor is saying at the outset "I don't believe this T will pay".
The Guarantor is saying "I do believe this T will pay, and I'll put my money where my mouth is so agree to pay if the T fails"
If the LL had a duty to immediately commence eviction proceedings if the T failed to pay (but the Guarantor stepped in), then the LL might as well do away with the whole Guarantor process and simply refuse the tenancy from the outset.

What absolute rubbish.
If the Guarantor refuses to pay and the tenant gets evicted, the Guarantor will not have any credit issues, providing they pay up once the court makes the demand.

Blimey, some people talk absolute rot on this place sometimes.

If you lose a court case, it has NO impact on your credit rating. It only have impact if you were to not pay it.

Personally, as a guarantor, if the LL didn't put notice to evict, I'd be forcing the issue either way, just as the OP should. That will quickly escalate and the LL will issue a S8.

user1977

newsgroupmonkey_ said:

Grumpy_chap said:

newsgroupmonkey_ said:

user1977 said:

newsgroupmonkey_ said:

propertyrental said:

As guarantor, you are not a party to any contract - you receive nothing ('consideration' is the legal term). So guarantee agreements have to be created as a 'Deed'. As such

* the guaarantor must know what the Deed involves - so must have been shown the tenancy agreement they are guaranteeing before they sign

* The deed should say it is a deed

* The signitures should be witnessed.

Having said that, some judges will enforce guarantee agreements that don't meet these strict legal criteria if the intention was clear to all parties - depends on the judge. But arguing that a guarantee agreement is invalid (as above) would make a judge stop and think.

Flopfluppet said:

...
OK so my step son acted as guarantor for his employee on his tenancy agreement. The tenancy was initially for 12 months and SS assumed he would only be guarantor for the 12 months.  Had he have actually read what he was signing the small print effectively said he would be acting as guarantor the whole time the tenant lived at the property. 

This is normal.

The first 12 months have now passed with no issues. However this employee/tenant no longer works for SS as he went off the rails, got into drugs and ended up on benefits.  He gets housing benefit which the Landlord gets direct but the is a shortfall of a little over £100 per month, which he refuses to pay. So cutting a long story short, although the landlord is very reasonable with SS, the letting agent wants the shortfall (naturally) paying. 

the tenancy is between the tenant and landlord. The agent just acts for the LL and has to do what the LL instructs, so it is the LL that matters here.

There is no reason to evict the tenant

Errr  £100 per month rent arrears building up.....?

although the LL has said they would consider saying they want the property back to live in and starting eviction proceedings 

LL could use S8 (rent arrears) or S21 (no reason needed)

because he has been told this but refuses to find somewhere else to live. well if  heb is evicted he'll have no choice

SS has been to see tenant to talk it out and threatened  him with a hammer.  Ooops! Silly SS! Police were called, the drug use was also reported and so far the police have done nothing. What, about SS threatening tenant wth hammer, or the drugs?
SS said he hasn't taken legal advice because what he signed gives him no get out. I think he should, just in case.

See above

In the end if the LL doesn't/can't evict him, which could take 12 months racking up more debt for SS, the tenant could stay there indefinitely having the shortfall in his rent paid by SS.  It could go on for years like this.
Please, do you have any advice?

SS should get the guarantee agreement checked.

Little else he can do - it's up to the LL whether to

• 
  
• do nothing and accept the shortfall
• evict the tenant for rentb arrears
• evict the tenant for... no reason needed, or
• sue SS for the arrears (and hope the guarantee agreement stands up in court)

https://www.davidandrew.co.uk/downloadable-forms/Sample-Deed-of-Guarantee.pdf

And surely, if the tenant isn't paying, then it should be up to the landlord to minimise the cost to the guarantor.

I mean, if they didn't, the guarantor could be expected to pay 100% of the rent for ever. The guarantor can't evict the tenant and whilst they could countersue, the tenant doesn't have any money.

I'm not aware of there being any general obligation on the landlord to do so.

(though obviously, they might choose to take steps to end the tenancy)

There may not be any obligation, but I can't see a Judge being particularly impressed when the Landlord tries to get the money out of the guarantor.

They don't like things like that.

On what basis do you say that?

The whole idea of requesting a Guarantor is that the LL would not agree the tenancy to the Tenant without a second individual underwriting the commercial risk.  
In the extreme, that could mean the T fails to make payments from the get-go, at which point the Guarantor becomes liable.  The LL would have no grounds (or reason of choice) to commence eviction proceedings assuming the Guarantor makes the payments.
Should the T plus the Guarantor fail to make rent payments, then the LL would have reasons to commence eviction proceedings - that would also result in the credit record of both the T plus the Guarantor being negatively impacted.

Essentially - the LL by requesting the Guarantor is saying at the outset "I don't believe this T will pay".
The Guarantor is saying "I do believe this T will pay, and I'll put my money where my mouth is so agree to pay if the T fails"
If the LL had a duty to immediately commence eviction proceedings if the T failed to pay (but the Guarantor stepped in), then the LL might as well do away with the whole Guarantor process and simply refuse the tenancy from the outset.

Personally, as a guarantor, if the LL didn't put notice to evict, I'd be forcing the issue either way, just as the OP should. That will quickly escalate and the LL will issue a S8.

What means does the guarantor have to "force the issue"? (assuming the guarantee was a valid one in the first place)