Guarantor agreements

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    #16
    Originally posted by CHARLIEMAN View Post
    AndrewDod
    If there was any doubt as to whether to take your advice seriously, I now have the answer
    Now that's a silly comment if ever there was one. The dog article was in fact very serious.

    But go ahead and get whatever guarantor agreement you like - and good luck - you'll need it.

    Comment


      #17
      Originally posted by AndrewDod View Post
      You CAN put that in a guarantor agreement. But the chance that it would be enforceable is remote.
      And if you increase the rent at any point, remote will become zero.

      As above if you are going to do G agreement at all - you need to get it signed in YOUR solicitors office and with guarantor armed with proof of ID. Anything else is pretty much pointless (like telling the guarantor to post back something to you signed by some random witness).

      There are very few reasons to have a tenancy agreement longer than 6 months, but having a remotely useful guarantor agreement is one of them (with a break clause).

      You need to think long and hard - if you need a guarantor is it wise to accept the tenant (special circumstances like young people excepted).
      You've raised some good points there. By the time a rent increase comes into play the T is probably either ok for further tenancy or the G will come into play.

      Your second paragraph is an excellent point.

      And paras 3 and 4 are useful too.

      Comment


        #18
        Originally posted by jpkeates View Post
        We've both signed enough deeds to know that the person witnessing the deed would usually be entirely unknown by the other party.
        This. It would mean 99% of mortgage charges in the UK would be invalid. Surely that can't be the case?

        Comment


          #19
          Originally posted by ChrisDennison View Post

          This. It would mean 99% of mortgage charges in the UK would be invalid. Surely that can't be the case?
          I think the law around deeds envisages that deed signing is administered by solicitors (albeit that is not always the case). But that builds a lot of traceability and prevention of reversal into the system (if the solicitors are honest).

          Comment


            #20
            But that isn't the case. And that's the point. Mortgage charges are routinely posted out to the mortgagors to sign, and nobody checks who acted as a witness. Not the conveyancer, not the mortgagee.

            Granted, a mortgage charge that fails to be a deed is still an equitable mortgage charge but I would struggle to believe that that's good enough for all the UK's mortgage providers. Which is why I struggle to believe your claim is correct.

            Comment


              #21
              Nobody said that if the witness is unknown or untraceable the deed is invalid. That does not make it invalid in and of itself. It does make it bloody hard to challenge a case of deed-fraud however (which is a large problem).

              But Mortgage deeds are really in a different category. The fact that deeds have to be executed in a particular way just is -- it is not totally logical. In the case of mortgages surely the real thing the mortgage company is interested in is the identity of the main signer - not the witness -- (the deed is valid **if** not challenged because it was witnessed)

              for example it is (now but not in the past) possible to sign mortgage deeds via the government gateway -- here the witness might be unknown to them but in order to submit the deed it would be necessary to sign in to the gateway AND the resulting deed would them be submitted to the solicitor or conveyancer who is acting for a client (whose identity they would also have checked.

              That is a world apart from posting out a bit of paper to a guarantor and saying "post it back signed by a witness. Here there is no evidence whatever that the person receiving the request is the named guarantor, no evidence that the person signing it is that person, and no evidence that the witness exists, and no third party credibility at all.

              Comment


                #22
                So what is it you actually want to say? Sorry but you completely lost me. Do you take issue with the problem of proving the identity of the guarantor or with the valid execution of the deed itself? You seem to be flip flopping between the two topics but they aren't really related...?

                The identity question can be fairly easily resolved I think, for the reasons mentioned by jpkeates above.

                Which then leaves your general challenge of whether a deed has been validly executed. But as I said, I would be extremely surprised if your stance on the validity of the execution (that it hinges on the witness) can be supported.

                But maybe I just misunderstand?

                Comment


                  #23
                  There is no flip flopping

                  a) A deed can be validly executed or not (there has to be some witness - who could be a dog perhaps - and it has to be in a particular form, on paper etc, the witness has to be physically present - that is a purely technical thing)

                  b) A deed can be of no value if challenged as being a fraud - or not

                  Not at ANY point did I say that the validity of EXECUTION depends on the nature of the witness -- pray point me to where I said that......

                  if the execution is INvalid the deed fails no matter who the parties are

                  but the converse does not apply -- the apparent mode of execution does not in and of itself make a deed that can be relied upon either as a
                  valid deed, or as a deed signed by the parties involved at all

                  ===

                  The practical question which perhaps you would be kind enough to answer is:

                  T says I have a guarantor Mr Smith in Leeds. So you post your wonderful guarantee form and the AST to a Mr Smith who returns it with some signature and countersigned by Mr Grimes. You have a perfectly validly executed Deed. But when you try to activate the Guarantor agreement Mr Smith denies signing it, says it looks nothing like his signature and Smith denies the existence of Mr Grimes- what do you do think happens next? because I am afraid that is exactly the way a lot of estate agent guarantor agreements are executed. Someone might have acted fraudulently, but who are you going to sue?

                  It is nothing to do with the validity of execution

                  The only reason the mortgage provider and land registry get away with it at all (and surprisingly often they do not) is that they can identify the signer of the deed and that this person did in fact sign it (so if the deed is invalid - it is invalid because that same person acted fraudulently).

                  Comment


                    #24
                    Originally posted by AndrewDod View Post
                    There is no flip flopping

                    a) A deed can be validly executed or not (there has to be some witness - who could be a dog perhaps - and it has to be in a particular form, on paper etc, the witness has to be physically present - that is a purely technical thing)

                    b) A deed can be of no value if challenged as being a fraud - or not

                    Not at ANY point did I say that the validity of EXECUTION depends on the nature of the witness -- pray point me to where I said that......

                    if the execution is INvalid the deed fails no matter who the parties are

                    but the converse does not apply -- the apparent mode of execution does not in and of itself make a deed that can be relied upon either as a
                    valid deed, or as a deed signed by the parties involved at all
                    Maybe I misunderstood you but in posts #11 and #13 you seem to argue that unless the witness' existence can be proven a deed would be invalid. Which I think goes towards your point (b) above, but which I think is a red herring here.

                    The practical question which perhaps you would be kind enough to answer is:

                    T says I have a guarantor Mr Smith in Leeds. So you post your wonderful guarantee form and the AST to a Mr Smith who returns it with some signature and countersigned by Mr Grimes. You have a perfectly validly executed Deed. But when you try to activate the Guarantor agreement Mr Smith denies signing it, says it looks nothing like his signature and Smith denies the existence of Mr Grimes- what do you do think happens next? because I am afraid that is exactly the way a lot of estate agent guarantor agreements are executed. Someone might have acted fraudulently, but who are you going to sue?
                    I think this has been explained well in post #9:

                    https://forums.landlordzone.co.uk/fo...36#post1123736

                    I don't know about you but when I used a guarantor I credit and identity checked them just like the tenants to make sure that they (a) exist (b) are sufficient from an asset point of view (c) are happy to act as guarantors. So they will have signed to agree to us getting their credit data etc. All of this means that they would struggle to simply claim they never signed the guarantor agreement. Of course if you do what you say (simply post the agreement to some unknown person who the tenant claims can be their guarantor without checking them out beforehand) then this might not be the case - but in that case I would highly doubt whether you actually are of sound mind
                    ​​​​​​​
                    It is nothing to do with the validity of execution

                    The only reason the mortgage provider and land registry get away with it at all (and surprisingly often they do not) is that they can identify the signer of the deed and that this person did in fact sign it (so if the deed is invalid - it is invalid because that same person acted fraudulently).
                    And the same applies here. Which is why I think that the question of the witness that you (not me) brought up is a red herring.

                    Comment


                      #25
                      An alternative to a deed of guarantee is to have the guarantor be a joint tenant.

                      They do not have to live in the property, but they can be pursued like any other joint tenant, and their responsibilities automatically continue when tenancy becomes periodic. They can also give notice to end the tenancy once it becomes periodic, thus limiting their costs if rent is not being paid and ending the tenancy sooner than a landlord notice can.

                      They should satisfy whatever you require for a guarantor.

                      There are no HMO issues if it would be a single tenant without the "guarantor", but might be if it would be two unrelated tenants.

                      Comment


                        #26
                        I wonder why nobody has come up with this idea before: add a random person to the tenancy at the beginning to allow the landlord (via that random person giving notice to quit) to end the tenancy for all tenants? That way you never even have to consider giving s21 notice and going to court.

                        Comment


                          #27
                          Originally posted by MdeB View Post
                          An alternative to a deed of guarantee is to have the guarantor be a joint tenant.
                          A snag with that is that if the occupying tenant loses his job or is on the sick list for a long time he may struggle to get benefit. The LA will want to see his tenancy agreement and once they see a second tenant they will suggest he should pay the rent.

                          Also bear in mind that a guarantor has far less control than a tenant.

                          Comment


                            #28
                            Originally posted by ChrisDennison View Post
                            I wonder why nobody has come up with this idea before: add a random person to the tenancy at the beginning to allow the landlord (via that random person giving notice to quit) to end the tenancy for all tenants? That way you never even have to consider giving s21 notice and going to court.
                            If you make a stooge a co-tenant he is not going to be random.

                            You would have to persuade the "true" tenant to accept an unknown person as co-tenant.

                            The stooge will want a cast iron guarantee that he incurs no liability.

                            If you successfully sue the "true" tenant for non-payment of rent he will be able to claim a contribution from the stooge.

                            It will not be too difficult to show that such an arrangement is a sham.

                            Conclusion: A non-starter.

                            Comment


                              #29
                              Originally posted by Lawcruncher View Post
                              The stooge will want a cast iron guarantee
                              Or 20 quid....

                              I too disapprove of such schemes but without effective legal recourse I can see landlords becoming a lot more creative.

                              Comment


                                #30
                                Originally posted by Lawcruncher View Post

                                Conclusion: A non-starter.
                                Yes, but if the "stooge" is the mother of the tenant (or some other person who would otherwise have been a guarantor) why is it a non starter? It seems far more secure than a guarantor agreement, and the guarantor has the ability to limit their loss.

                                Yes having a random buddy of the landlord as a co-tenant would be.

                                Comment

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