Advice on deed of guarantee

[gwebstech]

Hi guys

Ive been reading up on the above, especially on here and im a bit bewildered to be honest. Ive read a lot of conflicting advice and just wanted to check a few things:

if i get a D of G its best done as a deed correct?

i can add clauses to make it continue after the assured term but also not to make it time unlimited?

i can see a RLA D of G online but it says its only to cover 1 tenant and id prefer to cover both of mine so does nayone know where there is a one i can download?

thanks for any help

[jpkeates]

There's a good outline here with a link to a draft deed.
https://forums.landlordzone.co.uk/fo...ncy-guarantees

I wouldn't a) change anything significant unless you're legally trained or b)rely on the deed as anything other than something to put pressure on the tenant(s) via the guarantor.

If the deed is to cover two tenants with a joint liability with two separate guarantors, each guarantor is liable for the debt of both tenants.
Any potential guarantor taking legal advice (which they should be urged to do) would probably be advised not to sign it.

[gwebstech]

thanks for the reply, ill check that link out. I was assuming (probably wrongly) that a guarantor would cover both tenants but if it only covers one tenant, and they have a joint tenancy - how could i prove which one was at fault if i ever needed to?

And yes, i read that is often just a means to put pressure on the tenant to pay

thanks

[mariner]

In a joint T each T is jointly & severally liable for any damage, and so is their G

[gwebstech]

thanks mariner

[gwebstech]

just 1 thing - regarding a witness signing the deed, i dont suppose i can be the witness for the guarantor?

[Interlaken]

It needs to be an independant, unrelated person.

[RayG]

I currently have a Guarantor (tenant's mother) claiming she only signed for the initial 6m AST, though the deed expressly states the Guarantee covers any 'extension'. The property agent says this has been tested successfully in court, however, so I think she is mistaken or just trying it on.

Of course a Guarantee is only as good as the Guarantor signing it. If a family member signs as Guarantor, the whole family might be slippery and try to resist liability. Be certain the Guarantee makes it clear that when an AST becomes periodic by operation of law the Guarantee remains valid.

Rule 1: It is better to take a tenant who doesn't require a Guarantor. Collecting a debt from a Guarantor can be just as hard as collecting from the defaulting tenant and the savvy ones are aware of that. In a nutshell, Guarantors are sometimes no guarantee of anything.

[RayG]

Having a guarantor sounds fine but you are actually taking on TWO risks - the tenant and the guarantor, each of which is a potential defaulter.

[MdeB]

if i get a D of G its best done as a deed correct?

Yes.
That is why it is called a deed of guarantee.

[MdeB]

Having a guarantor sounds fine but you are actually taking on TWO risks - the tenant and the guarantor, each of which is a potential defaulter.

Yes, but by having a home-owning guarantor, you can attach the debt to the home (but I do not know about accrued interest, if it is not sold for 20 years).

[RayG]

Yes, but by having a home-owning guarantor, you can attach the debt to the home (but I do not know about accrued interest, if it is not sold for 20 years).

It sounds easy but best not to get into securing a debt against assets. Some of these guarantors are hardnuts with a string of unsatisfied CCJs. This is not what landlords should be doing. Tenant selection, if done properly, will not involve dodgy guarantors.

[RayG]

I believe owing a debt means very little to some people. They know that there is a very wide chasm between being owed money and collecting the debt.

[theartfullodger]

Just because deed says it continues doesn't mean it necassarily does:. Only a judge can rule deed is valid or if that clause is enforceable

[RayG]

Just because deed says it continues doesn't mean it necessarily does:. Only a judge can rule deed is valid or if that clause is enforceable

...and therein lie the dangers of guarantors!