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View Full Version : Need Urgent Help! Guarantor Been Stitched Up A Treat!



leeorg
13-03-2007, 21:35 PM
Hi,
I'm in a very tricky situation. I agreed to be a guarantor to a tennant. I have been forced to pay the last two months rent and will be forced to pay this months rent too before the tenancy agreement ends. However as the tennant has not returned the keys yet the Letting Agent will not allow the tenancy agreement to end. I also want to recover the loss of money I have incurred (almost £2000). The tennant and I did come to a verbal arrangement that he will pay me some money monthly. However he has completely made me lose his trust and I believe he never had any intention of paying me. I have his home address/number details so tracking him is not a problem.
So I need to ask:
a) Can the Letting Agent force the contract on longer than 6 months?
b) Can I sue or pursue a claim in the small claims courts against him?
Many Thanks in Advance!

rewop46
14-03-2007, 06:07 AM
My friend, go and see a solicitor NOW.

In my long experience as a landlord I have seen guarantors stitched up time and time again. Unfortunately the tenant has all the force of the law with him and you have to pay. You were accepted as guarantor because the agency knows they can get the money from you as you have a good credit rating and have something to lose.

Until he has told the agency that he has vacated the property he is still resident there and therefore you have to pay his rent.

I don't know the circumstances here but your "friend" couldn't get referenced for a reason; because he doesn't pay his bills.

Even when he eventually leaves, his creditors will come after you; after all you "guaranteed" him. They are business people and they need to recover their money. This is a frequent occurence I'm afraid. The agency will no doubt forward all correspondence to you including giving your details to the debt collecting companies that your "friend" will no doubt attract.

Quite often the tenant comes along with the guarantor and they both give some sort of sob story to the agent. In this case they have both lied. Difficult to have any sympathy with either party.

I repeat my first sentence: go and see a solicitor NOW.

Worldlife
14-03-2007, 06:12 AM
If the landlord has done all the paperwork correctly you are experiencing the responsibilities of a guarantor.

You will be liable for rent up until the point that the landlord gains full possession of the property.

The landlord cannot gain possession if the tenant refuses to hand over the keys and will be guilty of illegal eviction if he doesn't seek a possession order from a Court. If the property or contents have been damaged to an amount in excess of the deposit you could be liable for this too.

Why on earth did you agree to act as a guarantor to a tenant who is now proving as unreliable to you as to the landlord? What knowledge did you have of that person before signing as guarantor?

Ask what action the landlord's have taken to gain possession of the property. Was a notice had been served when the tenant fell into serious rent arrears? Maybe give your "without prejudice" agreement to payment of two months rent arrears up or up until the expiry date of the appropriate Notice/s requiring possession (which ever is the lesser sum) otherwise seek legal advice to determine whether or not there are technical grounds for you to take legal action to contest your responsibilities.

When did the landlord inform you that the tenant was in arrears? What I am trying to suggest is that the landlord had a duty to mitigate the potential losses to a guarantor and may not have done so if he failed to issue either S8 or S21 notices or has instigated Court procedures to gain possession.

My thoughts are that your claim for losses should be diverted towards the tenant who unfortunately seems to be a 'man of straw' . That should be your problem and not the landlords.

Edit Just read rewop46 excellent message posted whilst I was writing mine! Whilst my message is focussed on landlord issues I agree rewop's focus on needing a solicitor about general debt issues is quite important. Another question you might ask is whether the landlord arranged used a tenant verification service to assess their tenant. If they didn't then they could be failing in their duty to mitigate potential losses to a guarantor.

jeffrey
14-03-2007, 09:55 AM
If the tenant assumes liability that is covered under the contract (eg gas, electricity and water) does this make the guarantor liable for these? I would have thought not, as the guarantor has no control over what seperate arrangement the tenant is making. Any other opinions?

Guarantor's covenant is what counts. If covenantee (person in whose favour it was given) is L, covenantor (guarantor) not liable to others (gas, electric, etc.) for T's debts- unless T agreed with L that T would pay these, but even then the supply companies wouldn't know of the guarantee. Contracts (Rights of Third Parties) Act 1999 could apply, I suppose.

PaulF
14-03-2007, 10:02 AM
The poster doesn't clearly state whether the fixed term ends at the end of the current period, and contradicts this by stating the agent will not allow it to end until the keys have been returned: it's either come to the end of the fixed term or it hasn't!

You are also all wrong on the liabilities of the guarantor. The guarantor may write to the landlord and state that he no longer wishes to be held liable beyond that of the fixed term; this has been tested in court so it holds good. The guarantor should give "reasonable" written notice that he no longer wishes to be bound by the terms of the deed of guarantee (beyond the fixed term), but what is reasonable is subjective. Under the circumstances I would think that immediate notice would be reasonable.

The landlord cannot hold the guarantor/tenant liable for rent if it is a periodic tenancy because the keys have not been returned as it is in the landlord's power to change the locks if the tenant has vacated. If it's within the fixed term then the keys are not such an issue - yet!

Oh! One last thing - check the wording on the deed of guarantor as it might not be worth the paper etc etc............

Joannepowell
14-03-2007, 10:12 AM
The poster doesn't clearly state whether the fixed term ends at the end of the current period, and contradicts this by stating the agent will not allow it to end until the keys have been returned: it's either come to the end of the fixed term or it hasn't!

You are also all wrong on the liabilities of the guarantor. The guarantor may write to the landlord and state that he no longer wishes to be held liable beyond that of the fixed term; this has been tested in court so it holds good. The guarantor should give "reasonable" written notice that he no longer wishes to be bound by the terms of the deed of guarantee (beyond the fixed term), but what is reasonable is subjective. Under the circumstances I would think that immediate notice would be reasonable.

The landlord cannot hold the guarantor/tenant liable for rent if it is a periodic tenancy because the keys have not been returned as it is in the landlord's power to change the locks if the tenant has vacated. If it's within the fixed term then the keys are not such an issue - yet!


Dear Paul,

I am interested about this comment you make re the landlord has the power to change the locks if the tenant has vacated. I believe my 'thieving tenant' may have abondoned my property and I have a section 8 court hearing tomorrow. I hope to get legal possession of the property but wondered what I should do from that point forward. The ex wife of the tenant is now saying she will meet me at court to help all she can. She has not seen the tenant for almost a month and is adamant that he has abondoned the property. She is hoping to get her hands on the keys today but I'm not holding my breath. Apparently, the tenant has given the keys to some 'undesirables'! What should I tell the court tomorrow and is it possible for me to make a request to have the locks changed?

Kind Regards

J

PS. Sorry to have gone off the track with this thread. The same question appears with more details in my thread titled "section 8 court hearing in two days. Please help"

PaulF
14-03-2007, 10:26 AM
If you have reason to believe it's been abandoned then you have the right to protect the property.

As your court hearing is tomorrow the judge is likely to give an Order of Possession which means you can legally enter the property and secure it anyway as from the date of the order if there is nobody at home.

Joannepowell
14-03-2007, 11:04 AM
Thank you for your reply Paul. As a matter of interest, if i request it, what are my chances of getting the order dated the same or next day of the hearing? Is that possible?

J

rewop46
14-03-2007, 11:31 AM
My friend, (Leeorg) you are a very lucky person; you are fortunate enough to be speaking to people who have been through this before. All the comments are very valid.

I'm only giving you the worse case scenario; of course a lot of this debt will not be yours but it is likely that you will be pursued for it and have to prove yourself innocent. (and you thought it was the other way round didn't you?) The landlord gets hassle from debt collectors for about a year after the tenant leaves and the best way of stopping this is to give them another address; in this case, yours.

Expect to deal with utilities (gas, water and electric). They are quite reasonable to talk to although I've noticed a change in attitude lately.

Council tax. These have a well oiled system for debt collecting and are ruthless. Probably won't pursue you though.

Other debts i.e. visa cards, bank accounts, catalogues etc shouldn't come your way unless he used your name. Normally they do things in the landlord 's name (after he has kindly given them his bank details for his rent to be paid by standing order).

You don't know what your friend has been up to. As a landlord I get to deal with this first hand and know by the post what is going on. I'm not saying I open the letters, that is illegal isn't it! You can see by the return addresses that they are from debt collectors. As a guarantor you don't have this luxury.

It's best to prepare for the worse, that's where the solicitor comes in; he can stop it before it starts. A letter from them will stop the hassle quicker than anything you can do.

Another useful trick is to talk to the landlord and give him a genuine forwarding address for your friend; his parents or ex-wife if he has one. A bit mercenary I know, it's up to you.

Sorry I can't give you any better advice.

Best of luck, Rewop

leeorg
14-03-2007, 12:46 PM
Well where do I start! Firstly thank you to you all for helping with the advice.
I'll try to answer as many questions as I can!

I agreed to become a guarantor as it was my ex'es new fella who she wanted to move in with. We had a kid together - lived together still as I couldnt kick her out. Things had been so bad in recent months that I was at the end of my tether and I doesnt wanted to be rid of her. I was very desperate so signed to become a guarantor. I had no idea of his previous. I believe his age to be 20/21 years old. (Im 26 by the way :-) ) The relief when she moved out was enormous!

The contract was for six months tenacny due to end at the end of this month. (28th March)

They split up and he & she vacated the property shortly after new years eve. I have been to the property since and it is completely empty, apart from a couple of items already there. It was an unfurnished property so I shouldnt be liable for much if any damage. His security deposit is still held by the estate agent.

The estate agent told me that until they get the keys back I am liable to keep paying rental costs - even though the property stands completely empty?

As far as Im aware I've been told that Council Tax has been paid. I am unsure about the utilties, however if they do start knocking on my door I can forward them the 'Tennant''s new address. -******** In fact I've just got the phone to the Estate Agent. As I have passed on his contact details, any bills will go straight to him. And as the property is vacated they have stated that either another months rent has to be paid or the locks get changed. If the locks get changed - and I will phone up at the end of the agreement to get them to change it if they havent had the keys back then - then the cost of that gets deducted from the security deposit.

Ok.
So I have informed the tennant (through his father) that he has until tomorrow 1600 to contact me with regards to the keys and a letter stating that the remains of the security deposit gets paid to me to cover as much as my costs as possible. I have also told him (through his father) that so long as the keys go back I will accept half the responsibility of the rent so long as he pays me back the other half - should be around £600-£800 as its half the £1950 rent minus around £500 security deposit after some money has been taken out. So long as he pays me back at a rate which will cover my Credit Card bill. If he fails to do this or doesnt contact me than I will be on the phone to my solicitor to arrange an appointment.
The thing that concerns me is the lack of literature I'm able to research on this, so I dont even know if its worth my while trying to chase the money back?! I expect I will find out Thursday.

At least I now know £1950 will be the limit. Damage control may be the only option as this point!

Once again thanks to you all!

jeffrey
14-03-2007, 12:58 PM
As guarantor, you do have a right of recourse against the defaulting party whose debts you guaranteed. Do they have enough assets to make recovery a practical proposition?

leeorg
14-03-2007, 14:08 PM
I've been told by a reliable source that has a monthly income of around £1000. I also know he has an R-reg Vauxhall Astra Hatchback. Im also pretty sure he has a fairly decent laptop and plasma TV. As he lives at his parents I doubt very much that any furniture apart from the bed is his!
I'm 90% that this time tomorrow I will be on the phone to a solicitor. The problem is that where I'm in the Navy I'm due to be overseas at the end of April. I am contactable but unable to attend any court sessions. Would I be able to instruct a solictor to act on my behalf or give power of attorney to a family member? And if yes to both - any suggestions as to whats best?

Worldlife
14-03-2007, 17:37 PM
<snip>

The landlord cannot hold the guarantor/tenant liable for rent if it is a periodic tenancy because the keys have not been returned as it is in the landlord's power to change the locks if the tenant has vacated. If it's within the fixed term then the keys are not such an issue - yet! <snip>



Paul is this advice not treading on the dangerous ground of illegal eviction? The original poster provided no evidence to support a contention that the property had been abandoned although more background information has now been provided.

I for one would not consider changing locks unless I was absolutely certain the tenant had vacated the property. Retention of the keys by the tenant would suggest that the property had not been vacated - especially if there have been no check out arrangements to agree the condition of the property at the end of the letting.

leeorg
14-03-2007, 18:21 PM
He's definitely living at his parents.
The property is definitely vacated as there is nothing to sit on, sleep on. No fridge, or washing machine, no kitchen utensils etc. The only things in the property are light bulbs, a cooker and thats it!

Joannepowell
14-03-2007, 19:32 PM
He actually left the light bulbs? ;)

J

leeorg
14-03-2007, 19:55 PM
I'm pretty sure he left those lol!

jeffrey
15-03-2007, 10:52 AM
I'm pretty sure he left those lol!

Must be long-life ones.