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View Full Version : * Deed of Guarantee / MCOL Advice - Please *



tom999
30-10-2009, 13:46 PM
Hi all,

Scenario is as follows:

Tenants on AST in England, have defaulted on rent and a section 21 notice issued (deposit protected), which expires in the next week. (Rent paid monthly. More than 2 months rent is not owed by tenant’s).

A guarantor form (based on the Landlord Zone one (http://www.landlordzone.co.uk/members/download.php?f=guarantor.pdf) has been signed by the tenant’s guarantor. The guarantor is a working homeowner with an address in England. The tenants are on LHA. One is working part-time (less than 16 hours a week).

To pursue the guarantor and/or tenants via MCOL (Money Claim Online), please advise on the following:

1. I understand that a deed of guarantee may only be enforceable if:
(a) Guarantor was given a copy of AST/lease to read before signing and had enough time to seek legal advice about it, or
(b) It was witnessed and executed as a deed.

The guarantor form contains the clauses below:

"I propose to act as a guarantor for ................................."
.....
"I can confirm that I have read the above, and I am fully aware of the lease commitments regarding this prospective tenancy and I have raised any concerns with the landlord or landlord’s agent."

"Applicant Signature: .................................Date: ................................."

Would the above clauses be sufficent to cover cases 1 (a) and (b) to ensure that the 'guarantor form' is a valid deed of guarantee and would stand up in a court hearing?

2. Assuming the guarantor form is valid:
(a) Would it be best to issue an MCOL (Money Claim Online) now against the guarantor or after possession has been gained?
(b) Or is it best to do an MCOL with 'joint' defendants (D1 & D2), i.e. I believe you can add a second defendant, D1 = guarantor, D2 = tenant?
(c) If (a) fails for some reason, can an MCOL against the tenants (only one is working part-time) be done.
(d) If (a) or (b) is done before possession, can an MCOL be done against guarantor (or tenants) again after tenancy ends for property damage and accrued rental arrears (i.e. rental arrears accumulated after (a) or (b) )?

Amount claimed would have deposit deducted from it (AST provides for deposit deductions for damages and rental arrears)

Thanks.

westminster
30-10-2009, 14:36 PM
Amount claimed would have deposit deducted from it (AST provides for deposit deductions for damages and rental arrears).

I wouldn't deduct the deposit sum from the claim, (unless of course the tenant agrees to release it to landlord). Right now, the deposit money technically still belongs to the tenant.

If the tenant disputed deposit release, you don't want the extra hassle of adjudication on top of a court claim. Also, if it did go to adjudication, then there's still a chance they might not award deposit in full (as well as the potential for mishaps such as them losing the LL's evidence, awarding full amount to T, etc - such things can happen, see link below).

http://landlordlaw.blogspot.com/2009/10/tenant-in-despair-after-dps-pays.html

jeffrey
01-11-2009, 21:56 PM
"I propose to act as a guarantor for ................................."
.....
"I can confirm that I have read the above, and I am fully aware of the lease commitments regarding this prospective tenancy and I have raised any concerns with the landlord or landlord’s agent."

"Applicant Signature: .................................Date: ................................."
So where does it explicitly say that G guarantees anything? None of these anodyne phrases is sufficient:
1. "I propose..."
2. "I can confirm..."
3. "I am fully aware..."
4. "I have raised..."

Plus it does not seem to be:
a. a Deed; nor
b. witnessed.

mind the gap
01-11-2009, 22:16 PM
I think the thing tom has posted is the Guarantor Application Form, not the Deed of Guarantee itself.

jeffrey
01-11-2009, 22:21 PM
I think the thing tom has posted is the Guarantor Application Form, not the Deed of Guarantee itself.
No. Post #1 asks, "Would the above clauses be sufficent to cover cases 1 (a) and (b) to ensure that the 'guarantor form' is a valid deed of guarantee and would stand up in a court hearing?" My answer to that question would therefore have to be "No", too.

mind the gap
01-11-2009, 22:30 PM
No. Post #1 asks, "Would the above clauses be sufficent to cover cases 1 (a) and (b) to ensure that the 'guarantor form' is a valid deed of guarantee and would stand up in a court hearing?" My answer to that question would therefore have to be "No", too.
I don't dispute that 'No' is the correct answer to the two questions; I'm just trying to explain where this document has come from. It is indeed the LLZ Guarantor Application From. I know it well.

jeffrey
01-11-2009, 22:33 PM
I don't dispute that 'No' is the correct answer to the two questions; I'm just trying to explain where this document has come from. It is indeed the LLZ Guarantor Application From. I know it well.
OK. So, tom999, is there (or isn't there) a Deed of Guarantee?

tom999
02-11-2009, 09:49 AM
I wouldn't deduct the deposit sum from the claim, (unless of course the tenant agrees to release it to landlord). Right now, the deposit money technically still belongs to the tenant.Thanks westminster. Will bear this in mind.


OK. So, tom999, is there (or isn't there) a Deed of Guarantee?Sorry for any misunderstanding. The above quotes, as MTG has kindly pointed out, are from the Guarantor 'Application' form.

The Unlimited Deed of Guarantee is here:
Deed of Guarantee (Unlimited) (http://www.letmerlin.co.uk/_forms/1188082678Deed_of_Guarantee-Unlimited.pdf)
(Deed of Guarantee (Unlimited) - Alternative link if above doesn't work) (http://216.239.59.104/search?q=cache:0A7B2YK5uWAJ:www.letmerlin.co.uk/_forms/1188082678Deed_of_Guarantee-Unlimited.pdf+%22deed+of+guarantee%22+rent&hl=en&ct=clnk&cd=1)

(1) Is the following proof that the document in the link has been executed as a Deed?:
(a) The document does state "Deed of Guarantee (Unlimited)" at top and "IN WITNESS whereof the Guarantor has executed this instrument as a deed the day and year first above mentioned" at the bottom. (see: s.1 of Law of Property (Miscellaneous Provisions) Act 1989)
(b) Also was witnessed, and has witness signature, name and address.
(c) Guarantor 'Application' form states that guarantor has understood terms of lease, as follows: "I can confirm that I have read the above, that I am fully aware of the lease commitments regarding this prospective tenancy and I have raised any concerns with the landlord or landlord’s agent.", and was dated day before D of G was signed.

(2) Is it best to pursue guarantor via MCOL:
(a) Now (for rent due), or
(b) After possession (possibly in 6-8 weeks, for rent due + possble property damage)?