Guarantor Solicitor Problem

SanMiguel80

HampshireH said:

Sounds like a great friend.

We're you contacted by the landlord prior to them instructing solicitors?

Whilst they increased the rent, it sounds like your original agreement was valid. Has your solicitor rejected the idea they can claim for the value of rent you agreed to take responsibility for (just not the difference between old and new rent).

No, I was not contatcted by the LL or the LA. I have received no communications from either (or the tenant) since signing the AST renewal in August 2021. It was for a six months AST after which I thought my responsibilities ended. Unfortunately the AST states that after six months the AST will be 'from month to month' which I have since found out I am possibly liable until the end of the tenancy. They never issued a renewed AST to the tenant after this one.
My solicitor stated to me that the LL invalidated the agreement the moment they increased the rent without notifying me and as there were no rent arrears at this time I am therefore not liable for any debt incurred after this.

SanMiguel80

bobster2 said:

SanMiguel80 said:

The solicitor initially replied to me as to why they believed that I am still liable, but each time I have been able to refute their counter claims by pointing out to them that their client or their client’s agents failed to follow due process and as a result had invalidated any previous agreement I had with them, and therefore their claim against me was not in accordance with the law and I am therefore no longer liable. Following a consultation with a solicitor, the main basis for myself dismissing their claim is that the LL failed to contact me or obtain my consent for any rent increases above that stipulated in the AST I originally signed and therefore the LL had invalidated any agreement held.

I would recommend being cautious in your correspondence. You say you have consulted a solicitor? Did you not ask them to respond on your behalf?

You're writing here using terms as if you're already in court - only a court can "dismiss their claim".

Whether rent increases invalidate your guarantor agreement entirely - or just liability for rent above the original amount - will depend on the precise wording of the guarantor agreement you signed. 

Many thanks for your reply and advice. The solicitor costs £350+VAT per hour, they did offer to send a letter to their solicitors on my behalf for £150+VAT, but he said he thought I was capable of doing it myself which I did. Therefore you can see that due to costs I use my solicitor sparingly.

Perhaps 'dismissing their claim' was not the right word used and 'refused their claim' would have been better.

swingaloo

SanMiguel80 said:

HampshireH said:

Sounds like a great friend.

We're you contacted by the landlord prior to them instructing solicitors?

Whilst they increased the rent, it sounds like your original agreement was valid. Has your solicitor rejected the idea they can claim for the value of rent you agreed to take responsibility for (just not the difference between old and new rent).

No, I was not contatcted by the LL or the LA. I have received no communications from either (or the tenant) since signing the AST renewal in August 2021. It was for a six months AST after which I thought my responsibilities ended. Unfortunately the AST states that after six months the AST will be 'from month to month' which I have since found out I am possibly liable until the end of the tenancy. They never issued a renewed AST to the tenant after this one.
My solicitor stated to me that the LL invalidated the agreement the moment they increased the rent without notifying me and as there were no rent arrears at this time I am therefore not liable for any debt incurred after this.

They don't have to issue a new contract, at the end of the initial term it goes onto a rolling tenancy. You need to look clearly at your initial contract and clarify exactly what it says. I have never known a guarantors responsibility end before the end of the tenancy. 

DullGreyGuy

They work for the LL, they will be advising the LL but ultimately follow their client's instructions. The LL wants them to send more chasers but not to issue then thats what they'll do. You can choose to reply or to ignore them but dont have a way to stop them. 

theartfullodger

Stop replying to them. Just encourages them. Do nothing unless court papers arrive.

Very likely the guarantee you signed is unenforceable (has a legal error). See this from the experts in these matters.
https://england.shelter.org.uk/professional_resources/legal/costs_of_renting/guarantors_for_tenancy_agreements

Artful, a landlord for his sins 

PS - which country (Wales, NI...)? The law differs...

Mr.Generous

On the get out clause of "Rent went up so not valid" I'm pretty sure that if the tenancy agreement signed includes rent review clauses then the gaurantor is still liable. Most are valid for duration of tenancy, most are just for rent but some agreements include costs associated with tenant damage.

Many landlords won't take a tenant now without a gaurantor, and when new laws pass I think this, and rent insurance, will be the norm.

SanMiguel80

Mr.Generous said:

On the get out clause of "Rent went up so not valid" I'm pretty sure that if the tenancy agreement signed includes rent review clauses then the gaurantor is still liable. Most are valid for duration of tenancy, most are just for rent but some agreements include costs associated with tenant damage.

Many landlords won't take a tenant now without a gaurantor, and when new laws pass I think this, and rent insurance, will be the norm.

The AST did include a rent review clause for the rent to increase by RPI on the anniversary of the tenancy. They put the rent up by over 25% which was well in excess of the RPI rate at the time. They should have obtained my consent for this above RPI increase and without it they have probably invalidated the AST they held me to.

Furthermore, they sent the tenant a Section 13 rent increase notice for this. You can't issue a Section 13 rent increase on the tenant for a AST that contains a rent review clause. (It even states this on the Sec. 13 notice). Another reason to probably invalidate the AST.

SanMiguel80

swingaloo said:

They don't have to issue a new contract, at the end of the initial term it goes onto a rolling tenancy. You need to look clearly at your initial contract and clarify exactly what it says. I have never known a guarantors responsibility end before the end of the tenancy. 

That is correct as I have painfully found out. The tenant and LA knew that I would not sign a new agreement after the initial fixed term so they just ran with the old agreement for a further two and a half years and have attempted to hold me to this.

SanMiguel80

theartfullodger said:

PS - which country (Wales, NI...)? The law differs...

This is in England.

SanMiguel80

noitsnotme said:

I doubt they were obliged to contact you about ongoing issues during those 10 months.  As guarantor you are only there to chase for the debt if the tenant doesn’t pay it.  They would try and exhaust all efforts on trying to make the tenant pay first, before contacting the guarantor.

As an interested party in the agreement I would say it is reasonable to expect the LL to be obliged to contact me about ongoing issues such as rent arrears, otherwise the debt could accumulate indefinitely without me knowing about it. 

A clause in the AST states that the guarantor is expected to remedy immediately any default on the rent by the tenant. If the LL doesn't inform the guarantor then how is the guarantor supposed to remedy the fault?

The LA have stated that it is their normal policy to notify a guarantor after two months of unpaid rent which they failed to do. 

Furthermore, Section 17(3) of the Landlord and Tenant (Covenants) Act 1995 states that a guarantor shall not be liable for any fixed charge unless within six months of that charge becomes due, the landlord serves notice on the guarantor informing him. The LL didn't notify me for more than a year after rent arrears first started to accumulate.