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View Full Version : Proposed T's guarantor refuses; am I obliged to let?


Jibba24
10-11-2009, 12:21 PM
Hi everyone...

I'm completely new to all this and whilst I wouldn't regard myself as a 'complete' idiot, I have done something rather silly which has put me in a difficult postion and I would be very grateful for some advice from those of you with more experience in this area than myself.

I have nearly completed the conversion and refurbishment of two cottages. The property had been converted from two mid terraced into a single property and I have now converted them back to two.

I had had meetings with a propsective tenant who whilst not providing great credit checks due to a lack of history, did have a good landlord reference and a very good guarantor (her father). We agreed to a tenancy which was to start on the 16th of this month and before I went on holiday I left with her all the relevant documents that would need signing. These included a tenancy agreement, guarantor application and agreement and a note confirming what we had agreed.

The stupid thing is a I signed the tenancy agreement!!! I have now returned from holiday to find that the father will NOT act as guarantor! I met with the prospective tenant and explained that I wouldn't be happy to proceed without this and she agreed to drop everything. However, I have today had two phone calls from the local authority threatening me and stating that since she has a signed agreement she is within her rights to move in on Monday! I have spoken to her and she again confirmed to me that she wouldn't be proceeding. The council, however, are strongly advising her that she has a legal right to the property!

The property is not yet finished as it has no heating, carpets, it still has a door through to the next door property and various electrical sockets are still to be fitted.

I'm buggered if I am going to finish the property and want to fight all the way. She has both verbally agreed to the guarantor being a pre-requisite and I also have text messages alluding to this.

Help....what are the various scenarios from here and have you any advice on my next step!

Thanks very much in advance....and yes, I have learned a big lesson from this.

Regards
S
tom999
10-11-2009, 12:40 PM
If the tenant has not moved in, and not using it as her home, I don't believe a tenancy has been created.
(1) Do not accept any rent or deposit.
(2) Get written surrender of tenancy from tenant in writing.

Tenancy is between landlord and tenant; the local authority are a third party - so are not relevant to the tenancy.

Presumably tenancy is an AST in England or Wales?
Jibba24
10-11-2009, 16:22 PM
Thanks for that. It is indeed an AST.

I am a little confused as to how things will possibly play out from here now as I had also thought the LA were not directly involved as they only provide her with housing benefit.

Surely they can't force me to finish the work and hand over a key....can they?

Will have to be over my dead and lifeless body...!!!! :mad:
jeffrey
10-11-2009, 16:26 PM
I am a little confused as to how things will possibly play out from here now as I had also thought the LA were not directly involved as they only provide her with housing benefit.

Surely they can't force me to finish the work and hand over a key....can they?
No. The local authority merely supply money to T.
But T might be legally competent to force your completion of works, if there is a binding contractual obligation on you.
Lawcruncher
10-11-2009, 17:54 PM
I think the problem here is that a contract that is not executed as a deed is almost always enforceable as soon as it is signed. By handing the signed agreement over you virtually confirmed your intention to be bound. Since you were already bound, it is not surprising that the father declines to sign a guarantee.

It is also necessary to distinguish between (a) the tenancy beginning and (b) an obligation to grant a tenancy. Although the tenancy does not begin until the tenant goes into occupation, that does not mean that you are relieved of any obligation to grant the tenancy.

If the tenant does not want to continue with the tenancy all she has to do is to release you from the contract you signed. This is best done by deed.
Jibba24
10-11-2009, 21:04 PM
Does the verbal agreement made between us (along with some written communications) that a guarantor was an essential element mean nothing?

The pack that I left with her (that included the signed tenancy agreement) also included a guarantor application, guarantor agreement both made out in her father's name and a covering letter outlining what we had agreed and it clearly stated that her father was to be a guarantor.

Should they really push this and decide they want to force me me to complete the house and for her to move in, is there some way that I can immediately start the ball rolling to get her out?
Lawcruncher
10-11-2009, 21:39 PM
You may have an argument that your signature was conditional, but the tenant could argue that it was all part of the negotiations which were overridden by your handing her a signed contract.

No point in starting the ball rolling immediately as the tenant is guaranteed a minimum of six months. You would have to wait for the tenant to be in default to get her out before six months.
Ericthelobster
11-11-2009, 08:06 AM
If the tenant does not want to continue with the tenancy all she has to do is to release you from the contract you signed. This is best done by deed.But by doing so, the council would presumably say that she'd made herself intentionally homeless and refuse to house her elsewhere; so I don't see that happening.
johnboy
11-11-2009, 08:39 AM
Why dont you inform the "tenant" that if you are forced into the tenancy without a guarantor you will serve a s21 on the first day of the tenancy and will evict at 6 months which will make it very hard for her to rent again.
Paul_f
11-11-2009, 09:00 AM
Why would it necessarily be hard for her to rent again?
Ericthelobster
11-11-2009, 11:46 AM
Why dont you inform the "tenant" that if you are forced into the tenancy without a guarantor you will serve a s21 on the first day of the tenancy and will evict at 6 months which will make it very hard for her to rent again.Wouldn't give her much incentive to actually pay the OP any rent though, would it?

As things stand, if the OP does have to let the applicant in, then if all goes well he should get his rent; the guarantor is only there as a failsafe after all. (Not that I'd be happy with the situation either, though).

(I always love it when parents decline to be guarantors for their offspring and then get shirty with LLs who consequently decline to offer accommodation... they won't trust their own children's financial acumen but expect a landlord to do so, no questions asked.)
Lawcruncher
11-11-2009, 13:01 PM
...parents decline to be guarantors for their offspring

I expect it is because when they were students no one asked for a guarantor
johnboy
11-11-2009, 20:12 PM
Wouldn't give her much incentive to actually pay the OP any rent though, would it?

.)

No it wouldnt, but it may be a incentive for her father to agree to be the guarantor as he originaly promised and if she didnt pay the the rent the option to use the s8 comes into play.



(Quote=Paul F) Why would it necessarily be hard for her to rent again?

I would have thought that was obvious. She cant get a ref from the last landlord. Yes I know she can rent privately who may not do checks. So if it rules out agents or L/L who do correct checks that makes it harder to rent again. Doesnt it?