Multiple guarantors

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Multiple guarantors

    Is there any reason not to accept multiple guarantors? Obviously having 2 people legally responsible for a tenants debts is, on the face of it, a good thing. But is there any danger of them trying to play off one against the other. I assume each guarantor would be liable for a defaulting tenants full debt?

    #2
    It would be so complex to set up.

    You can't end up with two people responsible for paying all of the debt (because you could collect twice), so the agreement would have to set out who would pay what and what would happen if guarantor paid x, leaving y outstanding.

    Or they'd have to guarantee a fixed proportion of the possible debt.

    Who could be so desparate to let to a tenant unable to find an acceptable guarantor that they'd try something so complicated?
    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


      #3
      Originally posted by HemelPlumbster View Post
      Is there any reason not to accept multiple guarantors? Obviously having 2 people legally responsible for a tenants debts is, on the face of it, a good thing. But is there any danger of them trying to play off one against the other. I assume each guarantor would be liable for a defaulting tenants full debt?
      Your assumption is correct so long as the guarantee is properly drafted and expressed to be joint and several. If the guarantee is joint and several you can sue (a) guarantor 1 or (b) guarantor 2 or (c) guarantor 1 and 2. If you obtain judgement against guarantor 1 and 2 you can enforce it against either guarantor 1 or 2 or both.

      If you have a joint guarantee it is vital that both the guarantors sign it.

      Separate guarantees should be avoided as otherwise you may get the sort of problem set out in post 2.

      Comment


        #4
        Originally posted by jpkeates View Post
        (because you could collect twice)
        That would be unjust enrichment.

        A guarantee is a contract for indemnity, not a contract to pay money if certain circumstances arise. If you get paid by one guarantor you have been indemnified for your loss and have no further claim.

        Comment


          #5
          Originally posted by Lawcruncher View Post
          That would be unjust enrichment.
          I should probably have said "claim twice" rather than "collect twice."

          It does sound like an overly complex solution to a simple problem with simpler solutions.
          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


            #6
            Originally posted by jpkeates View Post
            I should probably have said "claim twice" rather than "collect twice."
            You can "claim twice" in the sense that (a) you can sue both at the same time or (b) first sue one and then sue the other if the first does not pay up. What you cannot do is sue one, get paid in full and then sue the other.

            Originally posted by jpkeates View Post
            It does sound like an overly complex solution to a simple problem with simpler solutions.
            I do not think that a joint and several guarantee is unduly complex. However, like any other guarantee it is important that the guarantors understand fully what their obligations are. In the case of joint and several guarantors that includes understanding that each is fully liable.

            Comment


              #7
              Originally posted by Lawcruncher View Post
              I do not think that a joint and several guarantee is unduly complex
              Yeah, but you read deeds for fun!!!!

              I don't use guarantors, personally, so my default position isn't sympathetic.
              And if one guarantor isn't sufficient, I'm not sure what benefit they bring to a joint agreement,
              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


                #8
                Originally posted by jpkeates View Post
                And if one guarantor isn't sufficient, I'm not sure what benefit they bring to a joint agreement,
                'Cos you're just looking at it from the legal aspect of having a guarantor.
                A large benefit of a/some guarantors is having someone close on the landlords side if things go wrong.
                (I once had a guarantor who gave his son a backhander for getting out of line.)

                Comment


                  #9
                  I don't seem to rent to many young people, where a family member guarantor might be useful.
                  But that's a fair point.
                  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

                  Latest Activity

                  Collapse

                  Working...
                  X