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View Full Version : Is this Deed of Guarantee valid - or not?



mind the gap
25-01-2009, 18:10 PM
The parent guarantor of one of my tenants (tenancy starts July 09), having signed a guarantor deed and had it witnessed, has now emailed me to ask for a copy of the tenancy agreement. (It seems his son did not forward it to him as I requested, before the TA and the deed of guarantee were signed).

G has signed to say he has had time to read the tenancy agreement and to seek legal advice if he so wishes. Clearly this is not, in fact, the case.

Does the fact that he has told me this (by email), invalidate the deed - should I get him to sign a new one now that he has received the TA to read, etc?

Advice welcome.

Bel
25-01-2009, 18:17 PM
I dont know, but if i were you, I would attach copy of the TA to the Guarantor deed and get them to sign that too in future.

I have just signed a guarantour agreement without sight of a TA so I am very secretly smug.

mind the gap
25-01-2009, 18:26 PM
I dont know, but if i were you, I would attach copy of the TA to the Guarantor deed and get them to sign that too in future.

I have just signed a guarantour agreement without sight of a TA so I am very secretly smug.

Good idea; although sending them it electronically myself is surely proof they have had it, isn't it? My mistake was to assume the lads would do as requested and forward the details of the house and the TA by email to their parents...obviously asking too much of a 4th year medic! To be fair, five out of the six did as requested. The one who didn't, was, interestingly, the one who was most keen to know about whether there were any garden tools...:)

mind the gap
25-01-2009, 18:50 PM
No. You could turn on auto-receive notification, however this is implemented differently in various email clients and is not reliable. Non-repudiation is a very difficult issue with email - perhaps put it on a webserver you control - you could monitor the logs to see if it has been downloaded. This is about as good a confirmation as you will be able to get.

Sounds as if it's more trouble than it's worth. OK, it's back to paper trails then. I used to send out TAs to guarantors by post, but was trying to reduce paper use. If it won't stand up in court, I'll have to think again.

In fact... does this mean that the other 5 guarantors who have not asked for a copy (because their sons forwarded them it as requested), might wriggle out of something at a later date by claiming not to have seen it either (even if they have)? It's unlikely, but I don't want to leave any loopholes.

Should I send paper copies out to all guarantors and ask them to re-sign their Deeds of Guarantor - just to be on the safe side - or is that not necessary?

Will they think I'm mad?

Bel
25-01-2009, 22:47 PM
Will they think I'm mad?

Do you care? :D

Bel
25-01-2009, 22:54 PM
How far does one go? If you were an agent, you would be balmy not to do everything properly. But you are only answerable to you.

To be honest, its inadequate to send out a guarantor form without knowing who is witnessing it, as they could witness themselves under a false name and who would know unless it came to court, by which time it would be too late etc.

So how far do you go?

I wouldn't lose sleep about it.

Paul Gibbs
26-01-2009, 08:45 AM
I do not see why the guarantee is invalid simply because the guarantor did not have sight of the TA. If the deed clearly refers to the TA why did G sign without sight - IMO they signed at their own folly

Bel
26-01-2009, 11:10 AM
If they did not get a TA it is their own fault for not raising it with you, or for not reading the GA.

The LL/agent is the professional here and the T is a consumer...with all the protection that comes with that status.

It is up to the LL/agent to get it right if they want to be sure its watertight in a court situation.

"The guarantor must see the TA", and to be able to prove they have, has been imprinted on my brain. I am unable to pinpoint where this knowledge was originally learned from, but it make sense to me.


A bank consider a mortgage deed sufficient if signed by a witness - do you think they try and track down whoever signed as a witness?


Maybe true. But the mortage deed will never need to be proved as there will be payments and a spirit of cooperation (at least to start with) between the two parties.
There is every reason for someone wanting to wriggle out of a guarantours agreement when the going gets tough, as seen on LL zone time and time again.

Paul Gibbs
26-01-2009, 11:59 AM
G should not sign an agreement without reading it. If the words of the guarantee refer to an additional document then they should look themselves to see if it is there - if it is not they should ask for it before signing.

I suppose the question is what would a reasonable person do.

I agree there are other steps you can take for a belt and braces approach but I dont think it is necessary for those steps to be taken to ensure the validity of the guarantee.

jeffrey
26-01-2009, 12:04 PM
For safety you could put in the Guarantor that they agree they have had sight of the tenancy agreements and agree to the terms. If they did not get a TA it is their own fault for not raising it with you, or for not reading the GA.
Yes. Just this approach applies to mortgagor/borrower (B) executing new mortgage deed- this recites that:
a. B has received a copy of the mortgagee's mortgage conditions; and
b. the mortgage deed is expressly incorporating them by cross-reference (whether read or not).

mind the gap
26-01-2009, 12:26 PM
Thank you to everyone for their help so far.

The Guarantor Agreement has been executed as a Deed and specifically states that G has read and understood the TA and has had the opportunity to seek legal advice as to the commitment they are making.

BUT...

MY problem (still) is that, although the G has signed the thing to say this is the case, I now know it is not true and G knows I know it is not true (from our exchange of emails, which he may well have saved).

I am minded to make him - and the other Gs - go through the whole process again in case he ever uses the fact that I know he signed without sight of TA, against any claim I tried to make against him in the future?


Am I being paranoid, or would it be wise to do this?

Hope this makes sense.

Paul Gibbs
26-01-2009, 12:35 PM
Thank you to everyone for their help so far.

The Guarantor Agreement has been executed as a Deed and specifically states that G has read and understood the TA and has had the opportunity to seek legal advice as to the commitment they are making.

BUT...

MY problem (still) is that, although the G has signed the thing to say this is the case, I now know it is not true and G knows I know it is not true (from our exchange of emails, which he may well have saved).

I am minded to make him - and the other Gs - go through the whole process again in case he ever uses the fact that I know he signed without sight of TA, against any claim I tried to make against him in the future?


Am I being paranoid, or would it be wise to do this?

Hope this makes sense.


BUT - am I correct that you relied on his signature on the G before you let T in?

mind the gap
26-01-2009, 13:02 PM
BUT - am I correct that you relied on his signature on the G before you let T in?


TA states that T is offered conditional on commitment of satisfactory guarantor. It seems to be standard practice in student lettings for the TA to be signed first, then Gs to sign their agreement. I suppose this is because student TAs are often signed well in advance of the commencement of the tenancy - so if there is any problem with G, agreement could be annulled. I'm guessing here - it has never been a problem in practice.

Also, I've never had to take a G to court (only threaten to) so I don't know how obsessive I need to be about the documentation itslelf...hence my last question.

Paul Gibbs
26-01-2009, 15:21 PM
personally I dont see the issue. G signed and is bound by the terms if they do not want to check what they are signing that is their own choice - L should not lose out as a result.

Issue the claim and see if the G raises any of this as an argument - I doubt they will and if they do point out how futile their argument is and it has no prospect of success if they file a defence on those grounds apply for summary judgment

mind the gap
26-01-2009, 15:57 PM
personally I dont see the issue. G signed and is bound by the terms if they do not want to check what they are signing that is their own choice - L should not lose out as a result.

Issue the claim and see if the G raises any of this as an argument - I doubt they will and if they do point out how futile their argument is and it has no prospect of success if they file a defence on those grounds apply for summary judgment

Sorry if I haven't made it clear.

I have no reason to 'issue a claim' since the tenancy hasn't even begun yet. I am in the process of getting the paperwork sorted out for six delightful students and I hope I never have to issue a claim against their guarantors.

However, if I do, I need to be certain that any such claim will not be thrown out because the Gs could prove (by their emails to me post-signing) that they did not have sight of the TA before signing (as they are supposed to).

Do I :
(a) do nothing, on the grounds that their signed agreements, executed as deeds, would count (and their the subsequent emails would not?), or
(ii) Go through the whole form-signing process again, once I can establish and if necessary, prove - that they have all seen and read the TA?

jeffrey
26-01-2009, 16:05 PM
Do nothing- (a)- as anything that postdates the Deed is irrelevant in this context.

Lawcruncher
26-01-2009, 16:27 PM
the G has signed the thing to say this is the case

Stop there. If the guarantee is a deed (it is a deed isn't it?) then the guarantor is estopped from denying the truth of that statement. (Estoppel by deed.)

mind the gap
26-01-2009, 16:58 PM
Stop there. If the guarantee is a deed (it is a deed isn't it?) then the guarantor is estopped from denying the truth of that statement. (Estoppel by deed.)

Brilliant - thank you (both J and LC). Yes, it is a deed. You taught me well.

I knew I'd come to appreciate that estoppel thing one day (even though it does sound like someone choking on butterscotch).

Lawcruncher
26-01-2009, 20:07 PM
Lawyers keep pets called estoppels - so they can come and feed the estoppel.

Actually estoppel is a very wonderful thing and comes in many varieties.

mind the gap
26-01-2009, 20:20 PM
Lawyers keep pets called estoppels - so they can come and feed the estoppel.

Actually estoppel is a very wonderful thing and comes in many varieties.

Yes, I'm sure there's a class for estoppels at Crufts.

Or it's something the Flowerpot Men might say, when feeling especially silly.

Bel
26-01-2009, 22:44 PM
Stop there. If the guarantee is a deed (it is a deed isn't it?) then the guarantor is estopped from denying the truth of that statement. (Estoppel by deed.)

Question for the legals:

If the guarantour signs the deed and fakes the witness (eg they sign it themselves by another name), is the agreement a deed?

In court, if G says 'yes I signed it but I also posed as the witness" does the document carry any weight?


More regarding the viewing of tenancy agreement prior to giving guarantee:


NAEA and The Ombudsman for Estate Agents' Code of Practice :

"6d You must provide (other than in exceptional circumstances) an applicant with a reasonable opportunity to
see and study a draft or specimen tenancy agreement prior to the applicant becoming liable for fees or
charges associated with the rental of the property. Where there is to be a Guarantor for the applicant for the
tenancy, this facility must be extended to that person."

So it seems that any reputable agent should provide a potential guarantor chance to view TA prior to money changing hands.

Also see what a members said about the giving of the guarantee

http://www.landlordzone.co.uk/forums/showpost.php?p=92583&postcount=26
http://www.landlordzone.co.uk/forums/showpost.php?p=101419&postcount=30

mind the gap
27-01-2009, 18:23 PM
Question for the legals:

If the guarantour signs the deed and fakes the witness (eg they sign it themselves by another name), is the agreement a deed?

In court, if G says 'yes I signed it but I also posed as the witness" does the document carry any weight?


More regarding the viewing of tenancy agreement prior to giving guarantee:


NAEA and The Ombudsman for Estate Agents' Code of Practice :

"6d You must provide (other than in exceptional circumstances) an applicant with a reasonable opportunity to
see and study a draft or specimen tenancy agreement prior to the applicant becoming liable for fees or
charges associated with the rental of the property. Where there is to be a Guarantor for the applicant for the
tenancy, this facility must be extended to that person."

So it seems that any reputable agent should provide a potential guarantor chance to view TA prior to money changing hands.

Also see what a members said about the giving of the guarantee

http://www.landlordzone.co.uk/forums/showpost.php?p=92583&postcount=26
http://www.landlordzone.co.uk/forums/showpost.php?p=101419&postcount=30


Thanks for those, Bel - useful.

Ironically, I have just signed a guarantor agreement myself (for my son), produced by a letting agency, which does not claim to be a deed, nor did it require a witness to my signature. (It had lots of jolly Clip-Art images all over it, though).

Is it a bird...? Is it a (paper air)plane?

I would be interested to know if anyone has any answers to your question about the (supposedly) fake witness signature though?

jeffrey
27-01-2009, 18:28 PM
Well, a general principle is that no-one is ever bound by another person's forgery.

A second is that a forger CAN be bound by his/her own forgery however: Lord Haw-Haw (William Joyce) springs to mind, and it served him right.

So in the case of a guarantor forging a witness's signature, G is bound by his/her own actions: estoppel, again.

Lawcruncher
27-01-2009, 22:55 PM
If the guarantour signs the deed and fakes the witness (eg they sign it themselves by another name), is the agreement a deed?

As Jeffrey says, an estoppel will arise. You have represented to the person relying on the deed that it is a deed. Not quite on all fours, but I recall a case some years ago where the signatory to a deed argued in court that a deed (I think it was a mortgage) was not valid because it had not been signed in the presence of the witness. The court said the deed was binding because it had been represented that the document had been executed as a deed. The point is that a person who takes the benefit of a deed is not always there when it is signed and cannot know if the strict legal requirements have been complied with; he is entitled to assume that they have.


In court, if G says 'yes I signed it but I also posed as the witness" does the document carry any weight?

Unwise to admit to forgery in open court.

jta
28-01-2009, 06:13 AM
Unwise to admit to forgery in open court.

Is that right? Just unwise, not downright stupid? :rolleyes:

Paul Gibbs
28-01-2009, 07:07 AM
Ironically, I have just signed a guarantor agreement myself (for my son), produced by a letting agency, which does not claim to be a deed, nor did it require a witness to my signature. (It had lots of jolly Clip-Art images all over it, though).

Is it a bird...? Is it a (paper air)plane?



As a deed the LL has more protection. The document you signed is IMO still a contract and I think it will be valid see other thread: -

http://www.landlordzone.co.uk/forums/showthread.php?t=16000

As stated in the thread I have not had to take this argument to court but I am quite confident if I had to it would succeed

Bel
28-01-2009, 11:01 AM
As a deed the LL has more protection. The document you signed is IMO still a contract and I think it will be valid see other thread: -

http://www.landlordzone.co.uk/forums/showthread.php?t=16000

As stated in the thread I have not had to take this argument to court but I am quite confident if I had to it would succeed

Surely not a contract as no consideration ??

Bel
28-01-2009, 11:16 AM
As Jeffrey says, an estoppel will arise. You have represented to the person relying on the deed that it is a deed. Not quite on all fours, but I recall a case some years ago where the signatory to a deed argued in court that a deed (I think it was a mortgage) was not valid because it had not been signed in the presence of the witness. The court said the deed was binding because it had been represented that the document had been executed as a deed. The point is that a person who takes the benefit of a deed is not always there when it is signed and cannot know if the strict legal requirements have been complied with; he is entitled to assume that they have.





So you are saying the act of the nominated guarantor posting the document back, say even when both signed and witness by completely another person is enough to be relied on as if it were their own?

So only if G were prepared to lie barefaced in court that they had never seen the document so it must be a forgery, would they be able to avoid being responsible.

And unless the agent had met, ID'd G and witnessed the signature themselves or by a solicitor, would they be able to prove that G was a liar.