Guarantor Arrangements in Joint Tennancies

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    Guarantor Arrangements in Joint Tennancies

    Hello

    Apologies for the length of this message - I'm just a little concerned!

    I am currently looking to move out of my house (currently living with parents) to move into a flat / house share in London so I can be closer to my place of work. I have spent quite a bit of time looking into joint tenancy agreements so I can find out what I would be required to agree to and how the leaving arrangements for fixed term / periodic tenancies work.

    One of the things that is bothering my the most is guarantor agreements (if these are used in any contract I may sign) and how long if at all they would last for after I have moved out. Firstly I have read that some landlords may require me to act as a guarantor for any replacement I find if I move out during the fixed term. This is something I would never agree to but just so I know if the landlord does require this would it have to be stated in my tenancy agreement / the joint tenancy agreement that we all sign? I want to make sure I'm not caught out by signing a tenancy agreement that doesn't list this requirement, only to move out and find that the landlord can legally make me do this.

    The second point I would like to ask please refers to guarantor agreements once the tenancy agreement is in a periodic phase. I understand that once the contract is in this stage any individual tenant on the joint agreement (so myself) could end the agreement without having to seek agreement from the other tenants. I assume that if I did this any guarantor agreement that I / my parents may have agreed to would immediately cease to apply once I had served my notice? What about if I found a replacement for myself as a favour for the remaining house mates - Would this mean that the original contract hasn't actually been ended and therefore any guarantor agreement I / my parents had signed would still be in place and me / my parents would then be liable as a guarantor for the person who has moved in? I doubt this would be the case as if so that would mean me / my parents acting as a guarantor for an indefinite period of time as the periodic nature of the contract would mean it doesn't have a fixed end date? This would be ridiculous as me / my parents could in theory be a guarantor for my replacement for the next ten years! Therefore I assume that even if I did find a replacement (as opposed to simply leaving after serving my notice) a new contract would be issued with the new (and remaining) tenants names on it?

    Finally, in general how common / often do landlords require guarantors? I'm hoping its something that is mainly used for student lets as opposed to letting to people who are in full time stable employment such as myself?

    Sorry for all of these questions. I really want to move out and do a flat share. I just want to make sure I'm not signing up to anything that would be unfair and would subject me to unfair landlords! BTW I know most landlords are perfectly reasonable but there are always some bad apples!

    Thanks in advance for any help or advice.

    Jarv

    #2
    1. Any one of several tenants can end the tenancy either at the end of the fixed term or by serving appropriate Notice when periodic.
    2. It is the landlord's responsibility to find a replacement tenant if you want to leave as in (1).
    3. You might find it difficult if you want to replace yourself during any fixed term.
    4. Guarantors are only normally required where students are concerned or possibly in a house-sharing arrangement.
    5. An individual guarantor normally guarantees the whole contract as might any other guarantor, unless specifically stated otherwise, and not just the rent.
    The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

    Comment


      #3
      Originally posted by Paul_f View Post
      Any one of several tenants can end the tenancy either at the end of the fixed term or by serving appropriate Notice when periodic.
      The fixed term tenancy will end at expiry of the term no matter what.
      The only way to prevent a statutory periodic tenancy to replace it is for all the joint tenants to leave by expiry date. A single joint tenant can do nothing at that point. Only option is to serve once to quit once tenancy is periodic.

      Comment


        #4
        Hi Both

        Thanks for the replies. Paul you mentioned that I might find it difficult if I wanted to replace myself during a fixed term, why is this? Websites such as Spare Room list lots of adverts where a current flat mate is looking to replace themselves?

        The answers are both really good, however I am still confused. My initial post was long so I have listed and numbered a couple of my more pressing questions below, again I would be grateful for any answers on these:

        1) If I was required to act as a guarantor for a replacement that I had found for myself for the remainder of a fixed term would this requirement be stated on the tenancy agreement? I assume this is the case and if it wasn't stated on the tenancy agreement then no such requirement would apply as it would have to be on the agreement (as opposed to anywhere else / stated verbally) to apply?

        2) If the contract was periodical I assume I couldn't be asked to act as a guarantor for a replacement I had found for myself one because the contract wouldn't have an end date and this simply wouldn't be fair to impose such a term and two because I would have the power to end the whole contract by giving appropriate notice. Am I correct with these statements?

        3) As I have mentioned above I am aware that I could bring a periodical contract to an end on my own by giving appropriate notice. If however my flat mates wanted to stay on and I wanted to remain on good terms with them (It's easy to imagine a situation where they become annoyed with me if I was to end the tenancy on my own) I may agree to find my own replacement during the months notice or they may actively look for a replacement also during the months notice as I have seen people do on spareroom.com for example. If a replacement was found in these ways either by myself or the remaining flat mates (as opposed to me having to end the contract) would the new flat mate going on the contract (signing a new contract) end the contract for me and therefore end any liability I would have? Eg would this happening have the same effect as if I was to give notice and end the periodical contract for everyone? I just want to make sure I would not be liable in any way, shape or form for the property after I have moved out after having given appropriate notice.

        Apologies again for the length of this. I just want to make sure I get this all correct and it can be difficult to say all of this using words as opposed to speaking!

        Thanks again in advance, its much appreciated.

        Jarv

        Comment


          #5
          Originally posted by Paul_f View Post
          1. Any one of several tenants can end the tenancy either at the end of the fixed term or by serving appropriate Notice when periodic.
          2. It is the landlord's responsibility to find a replacement tenant if you want to leave as in (1).
          3. You might find it difficult if you want to replace yourself during any fixed term.
          4. Guarantors are only normally required where students are concerned or possibly in a house-sharing arrangement.
          5. An individual guarantor normally guarantees the whole contract as might any other guarantor, unless specifically stated otherwise, and not just the rent.
          1 Disagree, a single joint T can only void T for all if due Notice is served during SPT
          if 'the Tenant' wishes to vacate on/by last day of fixed term, then all joint Ts should vacateto avoid an spt creation at midnight. All existing joint Ts remain liable

          Comment


            #6
            Thanks and that last point does make sense.

            Are you able to help with all or any of the three questions I listed above?

            Thank you

            Comment


              #7
              Originally posted by Jarv;
              1) If I was required to act as a guarantor for a replacement that I had found for myself for the remainder of a fixed term would this requirement be stated on the tenancy agreement? I assume this is the case and if it wasn't stated on the tenancy agreement then no such requirement would apply as it would have to be on the agreement (as opposed to anywhere else / stated verbally) to apply? This is entirely at the landlord's discretion if he will allow you to replace yourself with another person as tenant, and you must expect to pay all the landlord's reasonable expenses if he agrees to it.

              2) If the contract was periodical I assume I couldn't be asked to act as a guarantor for a replacement I had found for myself one because the contract wouldn't have an end date and this simply wouldn't be fair to impose such a term and two because I would have the power to end the whole contract by giving appropriate notice. Am I correct with these statements? If the tenancy becomes periodic then you can serve a NTQ to end the tenancy giving the appropriate Notice, as you already state in the next paragraph so why don't you do this?

              3) As I have mentioned above I am aware that I could bring a periodical contract to an end on my own by giving appropriate notice. If however my flat mates wanted to stay on and I wanted to remain on good terms with them (It's easy to imagine a situation where they become annoyed with me if I was to end the tenancy on my own) I may agree to find my own replacement during the months notice or they may actively look for a replacement also during the months notice as I have seen people do on spareroom.com for example. If a replacement was found in these ways either by myself or the remaining flat mates (as opposed to me having to end the contract) would the new flat mate going on the contract (signing a new contract) end the contract for me and therefore end any liability I would have? Eg would this happening have the same effect as if I was to give notice and end the periodical contract for everyone? I just want to make sure I would not be liable in any way, shape or form for the property after I have moved out after having given appropriate notice.
              Sorry I don't follow this argument as if you serve NTQ then this automatically requires the other tenants to enter into a new agreement so what is the problem?
              The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

              Comment


                #8
                Thanks again Paul.

                For the first question when you say 'To expect to pay all of the landlords reasonable expenses' what exactly do you mean by this? Do you mean I would have to agree to cover the rent (act as a guarantor) for a replacement I found to take up the rest of the fixed term if I was allowed by the land lord to do this? If that is the case I can understand why a landlord may request this but it is something that I would never agree to. Once I am off the contract and someone else has their name on it in replacement of mine then as far as I am concerned I would then be free of all liability. If I was required to act as a guarantor I assume this would have to be listed on the contract?

                I am aware that serving a NTQ during a periodic tenancy would require the remaining tenants to enter into a new agrement but I am also aware that there is an unwriten code amongst tenants to try and find their replacement. It is fairly clear to me that if I served a NTQ during a periodic tenancy I should make at least some effort to find a replacement. On this point if I did serve an NTQ when the contract is in this stage what is the best way to confirm with the landlord that I served the notice? I can imagine a situation where the landlord could refuse to acknowledge that I served the notice and this could cause me a problem as my name would still be on the periodice or rolling tenancy agreement and therefore the landlord could start to claim that I am missing rent payments etc. Is this just me worrying too much? Ive heard stories (on these forums) of landlords refusing to accept notice or claiming that one tenant cannot end an agreement on their own, even though I know that is the case when it is periodic. Basically im worried that a landlord could deny my notice had been given and claim that im liable still and missing rent payments.

                Thanks again for your advice which is much appreciated.

                Jarv

                Comment


                  #9
                  Any thoughts? Sorry to request again. I just really do want to move out soon but need to make sure I am getting this right!

                  Thanks, Jarv

                  Comment


                    #10
                    Originally posted by Jarv View Post
                    1) If I was required to act as a guarantor for a replacement that I had found for myself for the remainder of a fixed term would this requirement be stated on the tenancy agreement?
                    A tenant is not a guarantor. A guarantor is a third party (for example a T's friend or relative) who agrees to take on liability for any potential debts of the T.

                    So, you wouldn't be required to act as guarantor for a T you replaced. You'd already be liable because you'd be the T.

                    If a joint tenancy is periodic, then any one of the joint tenants may unilaterally end the whole tenancy by serving notice to quit. The tenancy will legally end at expiry of the notice. Therefore, your questions about 'what if?' and finding a 'replacement' aren't relevant. You serve the notice, you leave at notice expiry, and at notice expiry the tenancy and your liability for rent ends. If the others don't move out at expiry of your notice/end of tenancy, then whatever problems which arise are not your problems.

                    It may be an 'unwritten code' to find a replacement, but it's actually a recipe for creating further problems, like the whole 'tradition' you describe in your other thread of paying the deposit to the outgoing T. You seem to be living in a rental world operating under a tenant-agreed 'system', but the purported system does not reflect the legal position, it's a fantasy constructed by flatsharers.

                    if I did serve an NTQ when the contract is in this stage what is the best way to confirm with the landlord that I served the notice? I can imagine a situation where the landlord could refuse to acknowledge that I served the notice and this could cause me a problem as my name would still be on the periodice or rolling tenancy agreement and therefore the landlord could start to claim that I am missing rent payments etc.
                    If you serve a NTQ in a periodic tenancy, then the notice must be in writing, and it must be sent to the address for serving notices (usually given in the tenancy contract). If you pay rent monthly, the notice must be at least a month long. It must also expire on the last day of a tenancy period. You should keep a photocopy of the notice, and obtain evidence of the date of service of the notice. If you deliver by hand, then take a witness. If you post the notice, then ask the post office for a certificate of posting (free, not a signed for service).

                    If you do the above, then it is very unlikely the LL could succeed in arguing that you did not give proper notice.

                    Note, the date of service is not included in the notice period. Note, if you post the notice, it will not be deemed served until two working days after posting.

                    To calculate tenancy periods (because you need to know the last day, for your notice to end on the last day) - a statutory periodic tenancy arises on the day after a fixed term expires, and the tenancy periods begin the same day, and their length is the same length as the rental periods. For example, a fixed term of six months commencing 15th January 2011, rent payable monthly. On 15th July 2011 the periodic tenancy starts, with tenancy periods running 15th - 14th, so the NTQ must expire on the 14h of a month.

                    Comment


                      #11
                      Thanks Westminster.

                      This is what I though the case to be (as its the way that makes most sense) and you are right in saying many things have been invented by the tenants when it comes to periodic contracts. The problem could potentially be however that in doing things by the letter of the law (which I know im entitled to do and should do) this could bring about problems with the other flat mates who may be operating under the informal agreements made amongst each other. The 'flat mate code' as I have heard it described as before.

                      The guarantor question related to if I moved out and someone replaced me during a fixed term. Ive read that some landlords require you to act as a guarantor for your replacement to ensure they pay the rent for the remainder of the fixed term. This is something that I could ever agree to. I assume if this was required it would have to be written into the contract? I also assume it couldn't apply to a periodoc contract as that would be silly - it could potentially mean I would be a guarantor for the person who has moved in for an indefinite period of time!

                      Cheers again, Jarvis

                      Comment


                        #12
                        Originally posted by Jarv View Post
                        The problem could potentially be however that in doing things by the letter of the law (which I know im entitled to do and should do) this could bring about problems with the other flat mates
                        Maybe, but as I said before, it is not your problem.

                        The guarantor question related to if I moved out and someone replaced me during a fixed term. Ive read that some landlords require you to act as a guarantor for your replacement to ensure they pay the rent for the remainder of the fixed term. This is something that I could ever agree to. I assume if this was required it would have to be written into the contract?
                        Sorry, I think I misunderstood you before.

                        I suppose it is possible that a LL could refuse to agree to assign your position as a JT of a fixed term tenancy to a replacement unless you agreed to act as guarantor for the replacement JT (though the LL would be better protected by insisting on a home-owning guarantor). The correct way to create the guarantee would be by executing a Deed of Guarantee, separate to the contract.

                        You could not be forced to act as guarantor. Equally, the LL could not be forced to agree to assign your position on the tenancy.

                        I also assume it couldn't apply to a periodoc contract as that would be silly - it could potentially mean I would be a guarantor for the person who has moved in for an indefinite period of time!
                        If the tenancy was periodic then all you'd have to do to is serve notice to quit to end the tenancy. The question of replacements and guarantees doesn't come into it.

                        Comment


                          #13
                          Originally posted by Paul_f View Post
                          Sorry I don't follow this argument as if you serve NTQ then this automatically requires the other tenants to enter into a new agreement so what is the problem?
                          If Jarv serves valid notice then that ends the joint tenancy, full stop. Upon expiry the landlord may grant a new tenancy to the remaining occupiers but he could just as easily treat them as trespassers & have them out within 3-4 weeks (inc bailiffs!).

                          Comment


                            #14
                            It's perfectly valid to have a guarantee contained within a simple contract. The usual reason for using a deed for a guarantee is because the guarantor is a third party and there is no, or arguably no, consideration for their promise. If the guarantor is the original tenant then the agreement to act as guarantor for their replacement during the fixed term would be part of the deal, there is consideration (as there is for every other part of it) and the issue doesn't arise.
                            Disclaimer:

                            The above represents my own opinion, derived from personal knowledge and should not be relied upon as definitive or accurate advice. It is offered free of charge and may contain errors or omissions or be an inaccurate opinion of the law. I accept no liability for any loss or damage suffered as a result of relying on the above.

                            Comment


                              #15
                              Originally posted by bhaal View Post
                              If the guarantor is the original tenant then the agreement to act as guarantor for their replacement during the fixed term would be part of the deal, there is consideration (as there is for every other part of it) and the issue doesn't arise.
                              I was thinking along the same line. In this specific case, acting as guarantor is in exchange of the landlord agreeing to release T from the tenancy.

                              That being said I would consider whether this is a good deal....

                              Comment

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