09 Mar 2015

A question about : Guarantor agreement

(Copied from another board)

Hi all, have previous threads on this but looking for advise on the legality of this guarantor agreement please as we are rapidly losing patience with both the LL involved and the tenant... Currently facing court action for rent unpaid as well as Ј500 of fees when the LL haven't even instructed a solicitor according to the claim form - have asked twice for a breakdown of their fees as have never seen them (supposedly an appendix to the tenancy agreement - was never provided) and so far they have ignored both requests so will be putting this in the defence on the claim form... Should add the LL is termed as the agent on this agreement, not the actual owner of the house

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Any opinions welcome (and my first time ever posting images so hope it worked)

Best answers:

  • On the plus side (from the LL's point of view):
    * the document states (I don't know if true) that the tenancy agreement was provided in advance for the guarantor
    * the signature was (presumably) witnessed
    * the agreement states clearly what the guarantor is guaranteeing
    On the minus side, it is not described as a Deed nor Executed as a Deed - it is described as an 'agreement' and uses terms like 'consideration' (inacurately) perhaps in an attempt to make it a contract.
    Strictly it should be a Deed. but courts do sometimes accept 'agreements' like this if it appears clear the guarantor knew what was being asked of them (some kind of 'natural justice' theory).
    No need for the LL to instruct a solicior - that is irrelevant.
    Clearly you should have been provided a breakdown of costs claimed, both before the legal action started and as part of the claim.
    Quote:
  • And the tenant has been paying rent still - they were actually only 2 weeks behind when this court claim was issued (they pay in installments as they receive housing benefit)
  • Tenancy agreement does not need to be signed by guarantor (though it's quite a good idea as a 'belt & braces' approach)
    If both documents were provided in the office and you had opportunity to read them, fine. If they were shoved in front of you and told 'sign here', not fine.
    But of course it's a question of proof.....
    As it's one of those guaranteed let agencies then yes, the agency is the landlord. The owner has let the property to the agency (agency is the owner's tenant); the agency has then sublet to the occupant (agency is occupant's landlord).
    So the agency employee who signed as 'landlord' was correct.
    However assuming you intend to contest the validity of the guarantee agreement (not a Deed etc), you could also contest on grounds the witness was not independant.
    How a court will rule on either of these grounds is debatable.
  • I don't think it is acceptable anselld - but I do know that as the agent insists on having the claim paperwork delivered by hand a fortnight lapsed before the paperwork was received and the tenant did pay rent since then. If they are up to date now we don't know as despite emails to the agency they have not replied.
  • Thanks G_M again - I guess we need to think carefully about what to do next. We have no idea what is owed on the rent now but do know this cannot continue like this...
  • Quicker you can get tenant out the better. This might involve agreement of landlord for 'Early Surrender'.
    alternative is for tenant to give valid notice (is tenancy in fixed term? Or pariodic (monthly)?
    Waiting for landlord to evict eg for rent arrears is pointless as LL can continue to chase you for the arrears so has no good reason to evict.......
    cash cow comes to mind.
    Of course, if you get the guarantee agreement struck out in court, you can bet your life the landlord will serve a S8 Notice on the tenant and evict for arrears!
  • If you can't get guarantee agreement struck out at least see if you can get the LA fees for the arrears removed as they seem really high and I think you can only incur financial penalties and fees for arrears if it's written into the TA. For example, my TA says that if my rent is late I'll be charged X% + BoE base rate in interest.
  • An update on this - any thoughts are welcome as we are not sure what to do next. After three emails to the agent - the first requesting the specific breakdown of fees referred to in the tenancy agreement which was never provided, the second following this up as no response was received, and the third making a formal complaint about not having been sent this and seperately also requesting a statement of the account, a response was finally sent, with only the statement, and a summary that Јx amount is solicitors costs and Јx amount court fees - still no appendix as requested.
    The total amount on the statement now consists of Ј900 rent outstandiing as of today, and Ј1150 in fees. This sticks massively in the throat - they have charged twice for the "solicitors costs" yet the county court claim form states no solicitor instructed, as well as twice for the court costs (at least there is physical evidence of this in the form of the claims themselves).
    Surely this is not a reasonable amount - the action they took to recover just over Ј700 of rent resulted in a 150% increase in the amount owed, and still no eviction paperwork issued to the tenant, so the liability is open ended and extortionate...
    The acknowledgement of service was been sent back stating only part of the debt is acknowledged (the actual rent arrears, not the fees as we were still waiting for their documentation which doesn't appear to exist!) so we have a further two weeks to figure out what to do.
    Please help if you can...
  • This might help
    https://www.gov.uk/government/public...edress-schemes
    https://england.shelter.org.uk/get_ad...edress_schemes
  • I only see space for two signatures ?
    Have you cropped the third off /
    A deed has your signature, a signature of a representative of the firm and a witness.
    The witness is to sign to say they have seen both parties sign the deed.
  • With all these costs/fees, it might be time to go to a solicitor. Or the CAB (although I'm afraid I don't fully trust the CAB).
  • If the letting agency is demanding more than twice the rent every time the tenant pays a little late...
    ...why don't YOU pay the rent (on time) and then collect the money from the tenant yourself?
    I realise that this would not be an ideal situation, but at least this way you would not be repeatedly overpaying by huge amounts. It's bad enough that you are having to cover someone else's rent - it's shocking that you are also having to pay massive admin. fees and legal costs.
  • I would pay a solicitor specialised in contracts to look at this.
    I think they might agree it is not a valid deed.
    However even a guarantor deed is not an open payment account and the mitigation of loss is still a valid defence.
    They can evict the tenant for non payment as soon as legally possible and therefore mitigate any loss and a judge would require them to explain what steps they had done to mitigate any loss.
    The method of a loss is separate to who pays the loss and English law is based upon the caveat that one must do all possible to mitigate that loss.
    Who pays is a seperate issue covered by the deed.
  • We know it is not a deed.
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