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alidee
22-04-2008, 15:05 PM
Have just credit checked a potential tenant. He declared on application form that he has a CCJ - the tenant check came back saying it is an active declared CCJ for £229 on 4/12/2007.
He now has employment earning £24000 a year and I have a letter proving this. Do you think I should still ask for 6 months rent in advance (probably not possible) or a guarantor? If he cannot provide either of these should I refuse the tenancy to him even though he is on a good wage ? The rent is £350 a months - all bills included so he should easily be able to afford it.
Many thanks for any replies.

settloe_99
22-04-2008, 15:13 PM
With a guarantor or six months rent in advance I would take him. Without either of these would walk away.

attilathelandlord
22-04-2008, 15:14 PM
What was CCJ for?

alidee
22-04-2008, 15:15 PM
Have no idea what CCJ was for - it only says the amount on the tenant reference .

susanne
22-04-2008, 15:23 PM
i would ask for 6 months back statements - then you can see if he can afford it - its not a huge rent for that salary.

attilathelandlord
22-04-2008, 15:37 PM
I'd ring up the company also. Anyone can write a letter. Of course, the tenant could oops! lose the job the day after they move in.

kayak
22-04-2008, 17:11 PM
Employment check (rather than just a letter) proving his wage plus a guarantor (UK home owner, CCJ free). A good wage doesn't mean he is going to pay you!

In leiu of a gurantor I would accept three months rent in advance but as a rollover.

Kind regards,

John

Ericthelobster
22-04-2008, 17:15 PM
Have no idea what CCJ was for - it only says the amount on the tenant reference .Well before you reject him, at least ask for the story.

For example, I have an applicant at the moment who has a CCJ; apparently this is due to non-payment of car tax on a vehicle he no longer owned at the time but omitted to return the vehicle transfer documents to DVLA when he sold it... all the court documentation was sent to an old address and he knew nothing about it at all until a credit check was run. Assuming that's all true, I wouldn't regard the possession of a CCJ per se to make him unsuitable as a tenant.

pebble
23-04-2008, 11:47 AM
It would be prudent to obtain the guarantor to gurantee on a deed, that they are guranting the current tenancy agreement, renewal or variation thereof. At least this way you have the guarantor set on the inception of tenancy and it carrys through whilst he is there.

It would also be prudent to request 3 months in advance, this could be on a rolling month basis. So in effect he had pre-paid the last three months of rental and he is paying the rental on a month to month basis also.

This way you have as much security as you will be able to get. Bearing in mind that if the tenant falls in arrears you can rely on the guarantor. Suffice to say the guarantor should also be full referenced checked, confrim that he owns property in uk and is up to date. You could request to see last years mortgage statement and also confirm via land registry website that they are the actual owner of the house.

Best of luck in your letting.

pebble - effective landlord solutions
www.pebbleonline.net

Esio Trot
23-04-2008, 14:25 PM
Have just credit checked a potential tenant. He declared on application form that he has a CCJ - the tenant check came back saying it is an active declared CCJ for £229 on 4/12/2007.

Provided that you secured your positions via guarantor or advance rent, only allow the tenant occupation once you have seen a copy of the CCJ.

It might be nothing, on the other hand it might be that a landlord has been so miffed with either rent owed or damages, that he or she has done a ccj. Can you risk rent arrears, or even worse, significant damages?

Mrs Jones
23-04-2008, 14:28 PM
I am risk averse - I would therefore not even consider anyone without a perfect credit rating (although I must admit it is my agent who deals with this stuff and this would be his advice).

alidee
23-04-2008, 18:57 PM
This tenant has asked his mum to be guarantor (she fits the crititeria).
His mum is now asking how long she has to be guarantor for - guess thats a good question. Anyone have any ideas ? Would it be until the CCJ is clear - have no idea how that happens myself. BTW the CCJ was for unpaid water rates which he is goin to show me proof of.
Thanks again for any advice :)

p_cas
24-04-2008, 12:37 PM
Why take the risk though? Are there no other tenants who dont have a CCJ against their name? Ok, they could go bad too but you know this one at least has a record of not paying bills, next time he defaults it might be on the rent. Why risk it?

kayak
24-04-2008, 18:14 PM
Why take the risk though? Are there no other tenants who dont have a CCJ against their name? Ok, they could go bad too but you know this one at least has a record of not paying bills, next time he defaults it might be on the rent. Why risk it?

I would have said sometimes risk is acceptable when it is a calculated risk. If you wait for the 'perfect' tenant everytime then over a long period of time you are going to lose out on rental income.

I think if you follow many of the steps in this thread then you are well protected.

In terms of how long the gurantor is for, I would say until the tenancy finishes. You reference people once at the beginning, not every few months. If she wants out then that would sound alarm bells!

Kind regards,

John

alidee
24-04-2008, 21:24 PM
Hi John
Yes you are right. I found from another site that the guarantor is valid for as long as the tenancy which makes sense. Have told the tenant this info and am yet to hear back about what Mum wants to do but yes right to be wary.
Many thanks
Alidee

p_cas
25-04-2008, 12:26 PM
I have lurking somewhere in the back of my mind that a guarantor can give notice at any time that they no longer wish to continue being guarantor. Whether that's correct or not I'm not sure, but I seem to remember it posted on here previously. If you've looked into it then I assume it's ok.

bagpuss
28-04-2008, 22:23 PM
I have lurking somewhere in the back of my mind that a guarantor can give notice at any time that they no longer wish to continue being guarantor. Whether that's correct or not I'm not sure, but I seem to remember it posted on here previously. If you've looked into it then I assume it's ok.

That doesn't sound right. They have to sign a formal deed agreeing to be one for the duration of the tenancy so I don't see how they could just 'decide' not to be a guarantor any more.

agent46
28-04-2008, 22:29 PM
They have to sign a formal deed agreeing to be one for the duration of the tenancy so I don't see how they could just 'decide' not to be a guarantor any more.

IIRC, and I'm too tired to look up any authorities, a guarantee doesn't have to be contained in a deed. It can be executed by ordinary writing so long as it is supported by consideration.

Just as a supplemental point, the LA should ensure that the g/tor sees the tenancy they are guaranteeing before they sign anything, otherwise, in some circumstances, the guarantee could well be worthless.

jeffrey
29-04-2008, 09:33 AM
Guarantee doesn't have to be contained in a deed. It can be executed by ordinary writing so long as it is supported by consideration.

No. Guarantor G's covenant to L is unsupported by any consideration from L to G, so it MUST be by Deed (or otherwise it's unenforceable).

agent46
29-04-2008, 09:44 AM
No. Guarantor G's covenant to L is unsupported by any consideration from L to G, so it MUST be by Deed (or otherwise it's unenforceable).

I've never done one of these cases myself, and I've not got access to any sources at the moment but if I can be apocryphal, I know someone who (acting for the lender) recently succeeded in an argument that the consideration given by that particular lender in a credit guarantee was the lender agreeing to lend to the guarantor's son (or brother, I can't remember). Obviously if the g/tor gains no benefit from the transaction then there would be a total failure of consideration, but when they are family (as the majority of tenant g/tors are), they clearly receive some benefit - even if it just derives from getting their layabout offspring out from under their feet.

However, in my friend's case, the lender ultimately lost the case on the point that the guarantor had signed the contract after the agreement had been signed and/or the money had already been transferred and thus the consideration was past - my friend didn't succeed in pushing the court a bit further - he was arguing that a continuing obligation to lend gave the guarantor a continuing benefit, such that it was capable of being present consideration. IIRC, unsurprisingly, the court held that the contract had been formed when the borrower signed the agreement rather than there being something akin to a lot of individual contracts on each occasion that money was advanced.

Here we are:

Halsbury's Vol 20 (1)

135.
Every guarantee not made by deed must, like other simple contracts, be supported by valuable consideration...

136.
The consideration for the guarantor's promise does not move from the principal debtor, but from the creditor. It need not directly benefit the guarantor, although it may do so, and it may consist wholly of some advantage given to or conferred on the principal debtor by the creditor at the guarantor's request....

jeffrey
29-04-2008, 11:06 AM
Yes. If there is consideration (but NOT past consideration), a Guarantee in writing is sufficient. If T and G are unrelated (so no 'family benefit' aspect) or if consideration is past (as in case cited), only a Deed of Guarantee will do the job.