Students lets - Deposits, Guarantors and Agreement Signing

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    Students lets - Deposits, Guarantors and Agreement Signing

    A friend has approached me with a problem with a student let. I have given as much advice as I can, but thought I would throw it into the public domain with the hope that somebody with a bit more knowledge than I, will be able to give a more definitive answer.

    I will try to list the more salient points rather than go into a long text.
    Son studying at Uni finds accommodation in January 2010 ready for start of Summer 2010 term.

    Group of five each hand over £200 to hold the accommodation over the summer plus £250 deposit.

    Tenancy was signed in January when money was handed over. One copy given between the five students. IE not copy each. Tenancy states students jointly and severally liable.

    At same time ‘Guarantor Agreement’ signed by mum. No copy of this available and as this goes back 9 months, is not 100% as to its content. Gist of it being that guarantor would be liable for any unpaid rent and also any damage. No copy of tenancy agreement seen by mum before signing. Guarantor Agreement not witnessed.

    Re the deposit. This was registered with ‘mydeposits.co.uk’ (Tenancy Deposit Solutions Ltd) but not until some considerable time after receiving it. I do not use this method myself, but I understand there is a certificate issued that is subsequently signed by the landlord then the tenants. No certificate has been seen by any of the students.

    The situation to date. Friends son failed module on course and has therefore not gone back to Uni. (will be studying at home to catch up). Of the rest of five original students, two have moved in and one more is going to. The last one has not and will not be for whatever reason.

    One person has been found by landlord and has moved in to replace one of the 2 original students.

    On top of the holding deposit (£200) and deposit (£250), the landlord is demanding another £300 to release tenant from tenancy. If this is not paid the landlord is threatening to take tenant to court for £3000. (I believe this represents the full rent for the year.)

    My own belief is that the guarantor agreement is not enforceable and I also have doubts about the tenancy itself being binding. Any thoughts welcome.

    #2
    Without knowing exactly what the guarantor agreement says, it is difficult to comment. Right now, it is valid - nothing you have said automatically invalidates it - but I suspect that if the landlord sued you, you may be able to convince the judge that it isn't valid because you weren't shown the tenancy agreement beforehand (unless you signed to say you had) and because it hasn't been executed as a deed.

    I can't see a reason why the tenancy would be invalid - the fact that 2 or 3 of the tenants has moved in, proves that the tenancy has begun - only one has to do so.

    However, I would suggest that the deposit is not correctly protected and a claim may be possible for compensation to the tune of 3x the value of the deposit. Don't get your hopes up yet because it can be complex and it can be expensive. Basically, the landlord has to comply with the initial requirements of the deposit scheme. My|Deposits (iirc) have in their requirements that the deposit is protected within 14 days of receipt. It wasn't, so the LL is in breach. You would need to get some serious advice on this one from a specialist landlord & tenant solicitor - your average high street lawyer is unlikely to have the knowledge/experience required.

    Comment


      #3
      Originally posted by Snorkerz View Post
      Without knowing exactly what the guarantor agreement says, it is difficult to comment. Right now, it is valid - nothing you have said automatically invalidates it - but I suspect that if the landlord sued you, you may be able to convince the judge that it isn't valid because you weren't shown the tenancy agreement beforehand (unless you signed to say you had) and because it hasn't been executed as a deed.

      If the landlord sued me he would definitely lose, It's a friend and his son, nothing to do with me. The reason I thought that the guarantor agreement would not stand up was for the reason you stated, IE agreement not seen by guarantor. I am going to see dad tomorrow and may be able to get more info. May be wrong, but from what I can gather guarantor agreement does not refer to what is being guaranteed, IE rent amount and tenancy address

      I can't see a reason why the tenancy would be invalid - the fact that 2 or 3 of the tenants has moved in, proves that the tenancy has begun - only one has to do so.

      Not sure where I have seen it, nor whether it is correct, but I believed that a tenancy agreement was not valid if signed in advance of it starting. Also believed that each party was entitled to a signed copy. I believe the holding deposit should have been taken, which would have been lost because of failure to move in, but the tenancy not signed until such a point that the landlord was able to start the tenancy, which at the point of signing, he wasn't. What would have happened if students resident last term decided they were not moving out and landlord needed to use eviction process S21 or S8

      However, I would suggest that the deposit is not correctly protected and a claim may be possible for compensation to the tune of 3x the value of the deposit. Don't get your hopes up yet because it can be complex and it can be expensive. Basically, the landlord has to comply with the initial requirements of the deposit scheme. My|Deposits (iirc) have in their requirements that the deposit is protected within 14 days of receipt. It wasn't, so the LL is in breach. You would need to get some serious advice on this one from a specialist landlord & tenant solicitor - your average high street lawyer is unlikely to have the knowledge/experience required.

      As the deposit has at last been secured, albeit late, I do not believe the 3x penalty is applicable.
      With my own son just starting the process of Uni hunting, (off to Surrey in the morning), this has got me thinking. Potentially I could be signing a guarantor agreement for him at some point in the future and with joint and several tenancies I could just as easily be guaranteeing the rent of 4 or 5 other people who I know little or nothing about.

      Thanks for quick response. I'm glad to say this is not my mess to sort out and I will pass on all comments received

      Comment


        #4
        Originally posted by Steve C View Post
        With my own son just starting the process of Uni hunting, (off to Surrey in the morning), this has got me thinking. Potentially I could be signing a guarantor agreement for him at some point in the future and with joint and several tenancies I could just as easily be guaranteeing the rent of 4 or 5 other people who I know little or nothing about.
        Yes, your analysis is correct. It's a beggar, and no sane person would be happy to do it. It's bad enough having to guarantee your own progeny's money (mis)management, let alone that of complete strangers.

        All you can do is refuse to guarantee an amount equating to more than one quarter/fifth (or whatever) of the total rent and wring a written assurance from the LL that he will not pursue your son/you for any shortfall in the total joint rent once your son has paid him the agreed amount. It's a palaver, but nothing else will protect you from being sued for another tenant's debts since legally the concept of your son's 'portion' of the rent does not exist, of course, just the whole rent.

        Does that make sense?

        You may find this thread on the same subject, useful:
        http://www.landlordzone.co.uk/forums...tor#post230406
        'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

        Comment


          #5
          Originally posted by mind the gap View Post
          Yes, your analysis is correct. It's a beggar, and no sane person would be happy to do it. It's bad enough having to guarantee your own progeny's money (mis)management, let alone that of complete strangers.

          All you can do is refuse to guarantee more than one quarter/fifth (or whatever) of the total rent and wring a written assurance from the LL that he will not pursue your son/you for any shortfall in the total joint rent once your son has paid him the agreed amount. It's a palaver but nothing else will protect you from being sued for another tenant's debts as legally the concept of your son's 'portion' of the rent does not exist, of course, just the whole rent.

          Does that make sense?
          Makes perfect sense. Whichever uni he picks, hope they've got plenty of grass - he can have the tent. I'll even chuck in a full gas bottle for the stove. That should save a few bob. And it will mean not signing my life away guaranteeing some other little oik.

          Comment


            #6
            Originally posted by Steve C View Post
            Makes perfect sense. Whichever uni he picks, hope they've got plenty of grass - he can have the tent. I'll even chuck in a full gas bottle for the stove. That should save a few bob. And it will mean not signing my life away guaranteeing some other little oik.
            That's what I like to see - tough love

            I'm sure he'll be able to get hold of plenty grass if he want to.

            And a few year's camping will certainly make a man of him, although it can be problematic trying to use a mean lean grilling machine in a 2-man tent and the beer fridge tends to take up a lot of room.
            'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

            Comment


              #7
              Not sure where I have seen it, nor whether it is correct, but I believed that a tenancy agreement was not valid if signed in advance of it starting. Also believed that each party was entitled to a signed copy. I believe the holding deposit should have been taken, which would have been lost because of failure to move in, but the tenancy not signed until such a point that the landlord was able to start the tenancy, which at the point of signing, he wasn't.

              A tenancy doesn't even have to be in writing, so when it is signed is irrelevant. The contract is enforceable from the date of signing, however the tenancy doesn't come into effect until the tenant moves in. The 'tenant' does not refer to any individual person, it refers the them as a whole - so as soon as one moves in, the tenancy has begun.
              What would have happened if students resident last term decided they were not moving out and landlord needed to use eviction process S21 or S8
              The landlord would have been in breach of contract.
              However, I would suggest that the deposit is not correctly protected and a claim may be possible for compensation to the tune of 3x the value of the deposit. Don't get your hopes up yet because it can be complex and it can be expensive. Basically, the landlord has to comply with the initial requirements of the deposit scheme. My|Deposits (iirc) have in their requirements that the deposit is protected within 14 days of receipt. It wasn't, so the LL is in breach. You would need to get some serious advice on this one from a specialist landlord & tenant solicitor - your average high street lawyer is unlikely to have the knowledge/experience required.

              As the deposit has at last been secured, albeit late, I do not believe the 3x penalty is applicable.
              Housing Act 2004 section 213(5)(b) & 214(1)(a)

              Comment


                #8
                Originally posted by Steve C View Post
                With my own son just starting the process of Uni hunting, (off to Surrey in the morning), this has got me thinking.
                It is worth bearing in mind that the difference between the most expensive University towns and the least can translate into hundreds, if not thousands of pounds, per year for accommodation and transport costs. Obviously your son will want to apply to those places where the courses suit him best, but all other things being equal and unless he plans to live at home , I would urge him to avoid London and Edinburgh (the latter in any case has a restrictive policy towards applications from people who live anywhere other than Scotland or the far north of England, and they positively discriminate in favour of kids whose parents did not go on to HE or are socially disadvantaged).

                Stoke on Trent seems to be cheapest, according to this Times Business survey:

                http://timesbusiness.typepad.com/mon...---london.html
                'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

                Comment


                  #9
                  Originally posted by Steve C View Post
                  Re the deposit. This was registered with ‘mydeposits.co.uk’ (Tenancy Deposit Solutions Ltd) but not until some considerable time after receiving it. I do not use this method myself, but I understand there is a certificate issued that is subsequently signed by the landlord then the tenants. No certificate has been seen by any of the students.
                  From MyDeposits' rules:
                  C1 Deposit Protection Conditions (‘initial requirements’of the Scheme)
                  C1.1 The following will apply when a Member requests to Protect a Deposit with us.
                  C1.1.1 The full Deposit stated in the AST must be Protected by the Member within 14 Days of receipt from the Tenant.
                  The full rules can be downloaded from here.

                  The 3x deposit sanction does apply if the LL fails to comply with the scheme's "initial requirements" (and also if he fails to provide T with the prescribed information). However, the LL could get round it by protecting the deposit with the DPS, as their requirements allow late protection.

                  Edit: Neither T nor LL need sign anything when the prescribed information (what you are calling a certificate) is provided to T.

                  Comment


                    #10
                    Originally posted by mind the gap View Post
                    Stoke on Trent seems to be cheapest, according to this Times Business survey:

                    http://timesbusiness.typepad.com/mon...---london.html
                    Woooh - Blackpool has a University. Would that be the "Blackpool Tech" that I went to? Can I now claim to have had a University Educashun?

                    Comment


                      #11
                      Originally posted by Steve C View Post
                      My own belief is that the guarantor agreement is not enforceable and I also have doubts about the tenancy itself being binding. Any thoughts welcome.
                      Guarantee possibly not enforceable, but tenancy agreement highly likely to be binding on all signatories.

                      Comment


                        #12
                        Originally posted by Snorkerz View Post
                        Woooh - Blackpool has a University. Would that be the "Blackpool Tech" that I went to? Can I now claim to have had a University Educashun?
                        Probably. I was however using the term 'university' in its loosest possible sense!

                        This is a really useful resource for prospective university students and their parents:

                        http://www.guardian.co.uk/money/2010...-accommodation
                        'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

                        Comment

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