Guarantor being taken to Court

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    #16
    I have every sympathy for o/p having such a delinquent family. However, those of you giving advice to o/p on how to avoid paying up are making it more difficult for any landlord to ever trust a tenancy guarantee in future, by putting your suggestions online forever.

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      #17
      Originally posted by JK0 View Post
      I have every sympathy for o/p having such a delinquent family. However, those of you giving advice to o/p on how to avoid paying up are making it more difficult for any landlord to ever trust a tenancy guarantee in future, by putting your suggestions online forever.
      I'm afraid that is just something that goes with the very light censorship that the internet brings. You will also find a lot of advice on these forums on how to avoid various leasehold charges (albeit some of which really are unreasonable), and bypass leasehold covenants.

      The only effective way to counter such things is to explain the impact of following the advice, rather than to ask people to self censor.

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        #18
        Originally posted by JK0 View Post
        I have every sympathy for o/p having such a delinquent family. However, those of you giving advice to o/p on how to avoid paying up are making it more difficult for any landlord to ever trust a tenancy guarantee in future, by putting your suggestions online forever.
        Actually we are helping landlords, by explaining what pitfalls to avoid if you want to have an enforceable guarantee. In this case the guarantor has been unwise in asking to see the tenancy agreement when they'd have a stronger case if they had not and in seeking to vary the agreement when they'd find the court more sympathetic if they clearly didnt know what they were doing.. The agent has no duty of care to the guarantor and gave them the opportunity to opt out, which they failed to take.

        The contract term attempting to bind the guarantor forever is most likely unenforceable, unfortunately one bad term does not invalidate the whole contract. A guarantor can write terminating the agreement at the end of the fixed term, they should take legal advice on this urgently as by seeking to terminate an agreement you agree one exists unless you phrase in terms of I dont accept a valid contract exists but if it should be deemed by a court to have been valid I now terminate the agreement (legal advice needed on wording).

        Whether the guarantor can be said to have received the tenancy agreement before they signed is debatable and depends on the extent of the differences from the proforma. I suspect they wont be material enough - but that is where they need professional advice. Unfortunately in offering to pay later they seem to have admitted to a debt they might, with legal advice, have been able to deny.

        There has been talk of SIL and MIL - but what of the SIL's husband or the FIL? The debt is due firstly from the tenants. If I have this right it must be the sister of the guarantor's husband - what is his role in this, he should be exerting pressure on the tenants to pay? If SIL's husband is still earning why is he not paying something? The landlord should first be attempting to recover the money due from their tenants and the guarantor should be making it clear to the tenants that they will have to try and recover the money from the tenants if they have have to pay up.

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          #19
          Originally posted by JK0 View Post
          However, those of you giving advice to o/p on how to avoid paying up are making it more difficult for any landlord to ever trust a tenancy guarantee in future, by putting your suggestions online forever.
          Either we are going to give all posters our opinion of the legal position or we are not. I say it like I see it whether the poster is landlord or tenant.

          As others have suggested, failing to point out a defect in a guarantee actually does landlords a disservice as well doing the poster a service.

          As a general principle people should keep to the bargains they make. The principle is not though absolute. Lady Hale summed it up when she said that the law allows you to make an unwise decision, but not an uninformed one.

          If you choose your guarantor carefully, have a well-drafted guarantee which does not try to stitch up the guarantor and follow recommended procedure, you should be able to rely on your guarantee. If you do not do things properly you cannot complain if the guarantor discovers he has a get-out.

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            #20
            Any landlord using an agent to find a tenant is more or less forced to use agent's proceedures and paperwork, and to trust that they have been done correctly. That they usually do foul it up in some way makes it unlikely I and I suspect many others would accept a tenant requiring one that applies to an agent. Be careful what you wish for, lefties.

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              #21
              Observations on the guarantee clauses:

              1. There has to be doubt about whether you can guarantee something which does not exist when you sign the guarantee. As to the consideration expressed see here: http://swarblaw.co.uk/viewtopic.php?f=24&t=9971. The phrase "act for the tenant" just about passes muster.

              2. This allows the landlord to slip in a tenant unknown to the guarantor.

              3. Quite inappropriate.

              4. "The Rent" is not (as implied by the capital letter) defined. However, it has to be implicit that it means the rent payable under the tenancy. Otherwise the clause is fine subject to clause 6.

              5. No comment.

              6. This could unravel the whole thing. "Whichever is the longer" should be "whichever is the earlier", but that is not what is potentially fatal. Clause 4 say the guarantor has to cover any unpaid rent. "Rent" has to mean the rent payable under the agreement yet to be entered into. This clause seeks to extend it to all future rent payable in respect of the property by the tenant. tThat brings in again the above point: There has to be doubt about whether you can guarantee something which does not exist when you sign the guarantee. Apart from that, whilst it is legally possible to guarantee an arrangement that continues indefinitely (e.g. a periodic tenancy) the guarantor needs to understand very clearly that that is what he is undertaking. In this case the guarantor made it clear he was only willing to cover a fixed term, so the guarantee does not reflect what was agreed. Can clause 6 be hived off to leave clause 4 to stand on its own? I would suggest not as the clear intention is to impose a single obligation so that if clause 6 is found to be unreasonable clause 4 (and accordingly the whole guarantee) falls with it. Of course if the guarantee fails anyway because you cannot guarantee something which does not exist at the date of the guarantee the question is academic.

              7. I have not checked whether you can opt out of the Regulations.

              8. It seems that the agreement entered into was not in the same form as the copy supplied. That has to be another string to the guarantor's bow, especially if the differences are significant.

              9. No comment.

              The document was not executed as a deed nor was any consideration expressed. The point is well worth making. The landlord may not know about section 3 of the Mercantile Law Amendment Act 1856 - it never came to my notice during 30 odd years in the law!

              A reasonable case can be be made that the guarantee is unenforceable. It will be down to convincing a judge.

              Even if the landlord wins, the form of guarantee still has to be classed as inadequate as it allows so many arguments that it is unenforceable. Agents should be making sure that the legal documents they use are as watertight as possible and that they follow recommended procedure. If agents prepare inadequate legal documents they are liable for any loss the client suffers as a consequence to the same extent as a lawyer would be.

              Comment


                #22
                Originally posted by Lawcruncher View Post
                7. I have not checked whether you can opt out of the Regulations.
                That's an interesting point.

                You can't opt out of the distance selling regulations, although there are contracts to which the act doesn't apply.
                They don't apply to contracts for interests in land, but rental contracts are specifically noted as being subject to the regulations.

                There doesn't seem any way that this agreement can be excluded otherwise.

                While the right to cancel is no academic, there's a long list of information that has to be supplied by a supplier (which would be the landlord/agent) for the contract to be valid, which includes how long the agreement lasts.

                That might turn out to be quite a fruitful line of enquiry.
                When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

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                  #23
                  http://www.legislation.gov.uk/uksi/2...lation/25/made
                  I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

                  I do not answer questions through private messages which should be posted publicly on the forum.

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                    #24
                    "10(3) Subject to regulation 9, prior to the conclusion of a contract for the supply of services, the supplier shall inform the consumer in writing or in another durable medium which is available and accessible to the consumer that, unless the parties agree otherwise, he will not be able to cancel the contract under regulation 10 once the performance of the services has begun with his agreement."
                    Is a partial opt out, of the right to cancel at least.

                    Although it's undermined in this guarantor agreement which tries to opt out of the legislation that allows the opt out!
                    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                    Comment


                      #25
                      Originally posted by Lawcruncher View Post
                      The landlord may not know about section 3 of the Mercantile Law Amendment Act 1856 - it never came to my notice during 30 odd years in the law!
                      That just seems to say that the guarantee is not invalid if the consideration is not stated in a written document.

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                        #26
                        Originally posted by MdeB View Post

                        That just seems to say that the guarantee is not invalid if the consideration is not stated in a written document.
                        Indeed. Until the section came to my attention I always assumed that if the document was not a deed that the consideration needed to be stated. The puzzle is how you are going to prove what the consideration is if it is not in writing.

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