Guarantor for only 1/3 of the rent?

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  • Grrr
    replied
    I see what you're saying lawcruncher, but doesn't that then suggest "all tenants are jointly and severally liable, apart from tenant X who only has to pay up to his share and no more" ?

    On the other hand I guess that just releases the Guarantor from any further responsibility, but not tenant x (even though x probably hasn't got any money!) ?

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  • Lawcruncher
    replied
    What you do is make guarantor y for tenant x guarantee all the tenants' obligations, but include a deeming provision that those obligations are complied with so far as guarantor y is concerned if tenant x pays a designated share of the rent and other sums due.

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  • PaulF
    replied
    Surely guarantor(s) are not just guaranteeing rental payments but all of the tenants joint and several liabilities of the contract too? Wouldn't this make any guarantor liable for the whole contractual liabilities of all tenants no matter what proportion of rent was being guaranteed? Otherwise it becomes messy and unworkable.

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  • mind the gap
    replied
    Originally posted by jeffrey View Post
    The trouble is: each T is liable for all the rent- so each T's G is too.

    Well, it was the solutiuon you proposed in #16 of this thread:
    http://www.landlordzone.co.uk/forums...ight=guarantor

    It has worked for me.

    In any case, I do not see why a G's liability should not be limited, even if the T's is not.

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  • jeffrey
    replied
    The trouble is: each T is liable for all the rent- so each T's G is too.

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  • mind the gap
    replied
    The way to do it is for the Deed of Guarantee to bind the Guarantor only:

    (i) for an specified amount equal to the amount his T offspring would normally expect to pay (i.e. as his contribution to the joint rent - in this case, one third) and no more, and
    (ii) if and when the LL has not already received rent equivalent to that amount from the named T's bank account.

    I have found that most parent Gs are happy with this arrangement.

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  • jeffrey
    replied
    If L is letting to T1/T2/T3, each of whom has a guarantor (G1/G2/G3), maybe there could be a Deed between G1/G2/G3 only in which they agree and declare that each will cover only his/her own T's debts. Still, nothing in that Deed would bind L who will still want to make T1/T2/T3 jointly and severally liable for 100% of the rent.

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  • Grrr
    replied
    Yes - I foresee the same problem. The G would still be reluctant to cover 1/3 if it is not their own child/friend/etc who has defaulted.

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  • jeffrey
    replied
    Originally posted by jjlandlord View Post
    You and the guarantor may agree any level of guarantee. So there should be no issue limiting the guaranty to, say, 1/3 of any rent/compensation for damage due.
    But OP was trying to see if G could guarantee "G's" tenant's one-third only. I'd say not.

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  • jjlandlord
    replied
    You and the guarantor may agree any level of guarantee. So there should be no issue limiting the guaranty to, say, 1/3 of any rent/compensation for damage due.

    Leave a comment:


  • jeffrey
    replied
    The trouble is: there are no 'shares' of a joint/several rent, at law.
    But G could guarantee one-third of the total, irrespective of which of the three tenants has paid nil.

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  • Grrr
    started a topic Guarantor for only 1/3 of the rent?

    Guarantor for only 1/3 of the rent?

    Where 3 joint tenants are jointly and severally liable, can one of them have a guarantor who only covers their 'share' of the rent - ie one third?

    I have assumed not, and in the past insisted that any guarantor needs to cover the whole rent for the property as is the responsibility of any one tenant.

    Needless to say, potential guarantors have politely declined.

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