Guarantor legality?

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    Guarantor legality?

    Hi

    My daughter has an AST agreement on which my husband is named as Guarantor. The AST is 5 pages long, and the Guarantor's obligations are set out in 'Appendix 5' (not a deed). The landlord has not signed the agreement. My daughter and husband have signed but the signatures are not witnessed. The Tenant's, Guarantor's and Agents initials are on the bottom of all 16 pages, but not the Landlord's.

    My questions to anyone who may be knowledgeable enough and kind enough to help are:

    1 Is this legal?

    2 Regarding posts I've seen about 'consideration' in an agreement - the first paragraph in Appendix 5 says "In consideration of the Landlord agreeing to the Guarantor's request to accept the Tenant as the Tenant of the Premises upon the Terms and Conditions of this Tenancy Agreement the Guarantor agrees that if the Tenant default to 1) pay the Rent as it falls due and 2)fully compensate the Landlord for any loss, damage, costs or other expenses arising either directly or indirectly out of any breach of the Tenancy Agreement" There are several more paragraphs of obligations! Do you think that this is fair consideration?

    Thank you

    #2
    1) It is legal - it may not be enforceable

    2) That is a courts decision. It has been raised a number of times on here and senior members have varying opinions. Personally, I have had deeds of guarantee refused by the court so your husband must be in with some chance if it is merely a contract.

    How many days were between daughter receiving tenancy agreement and signing it?

    Comment


      #3
      Daughter and husband met in agents office and were presented with the AST and signed.

      Comment


        #4
        In that case they would both have a good defence.

        This is a list, in law, of some clauses that the law considers unfair.
        http://www.legislation.gov.uk/uksi/1...chedule/2/made
        look at (i)

        Comment


          #5
          Many thanks Snorkerz for your information and opinion - much appreciated.

          Comment


            #6
            In consideration of the Landlord agreeing to the Guarantor's request to accept the Tenant as the Tenant of the Premises
            I am no expert on the law of contract and what amounts to the consideration required for there to be a contract can get quite involved. What follows is my understanding of the position.

            The law requires that the consideration for a contract should be sufficient, but not that it should be adequate. Sufficient means that what is expressed to be consideration must be capable of being consideration in the eyes of the law. Once the sufficiency test is satisfied any question of whether the consideration is adequate does not come into it. A clear example is an agreement to sell a house for one pound. The payment of money is sufficient consideration and accordingly such a contract would not fail for lack of consideration.

            Where the consideration expressed is not money or something of value (however small) there is a danger that the contract will fail for want of consideration. It is a common misconception that merely stating that something is consideration will do and I fear that the draftsman of the words quoted above may have fallen into that trap. We have to ask what the guarantor is getting in exchange for giving his promise to make good any loss suffered by the landlord and the answer would seem to be nothing. The consideration must move from the person to whom the promise is made. The guarantor is making a promise to the landlord and nothing is moving from the landlord to the guarantor.

            Comment


              #7
              Originally posted by Lawcruncher View Post
              Where the consideration expressed is not money or something of value (however small) there is a danger that the contract will fail for want of consideration. It is a common misconception that merely stating that something is consideration will do and I fear that the draftsman of the words quoted above may have fallen into that trap. We have to ask what the guarantor is getting in exchange for giving his promise to make good any loss suffered by the landlord and the answer would seem to be nothing.
              I'm sure this has been raised here before but I can't recall the outcome - but doesn't the provision of a roof over the head of one's beloved offspring (as opposed to, say, just a close but impecunious friend) count as a consideration?

              Comment


                #8
                Thanks Lawcruncher

                I can't see any consideration either - in fact I think my husband has been stitched up! There are 5 pages to the AST and 11 pages of 'rules'!

                I'm not sure what Snorkerz meant in answer to my first question re whether the Guarantee was legal. How can it be legal but not enforceable (in layman's language please so I can attempt to understand!)

                There is more to the story though. D was told when she viewed the flat (built late 1800's) that the fireplace was 'blocked off' and she couldn't use it. Two years later she was told by workmen on the adjoining roof that her chimney was unsafe (wobbly bricks and mortar stuff). She passed this on to the agent. Agent says their builder says chimney is safe (without accessing the roof which would need scaffolding as its 3 storeys high. D worried about chimney falling through roof into her bedroom or her child's bedroom underneath. Tells agent she will withhold rent until chimney is properly fixed. There are also damp issues and no insulation anywhere. Nothing happened. D writes to the landlords (2 solicitors) stating her concerns and why she is withholding rent. Nothing happened. So, D has not paid her rent for several months. Husband had a letter from agent 5 months after she stopped paying her rent asking for the money. D said she would 'sort it out' and not to worry. Husband gets a phone call from agent after another 3 months saying going to issue a Section 8 Notice and can he pay the rent arrears. D is adamant she is not in the wrong as this is a safety issue and she is happy to go to court. So what happens next I have no idea - except that my husband will NEVER be a Guarantor for anybody ever again!

                Comment


                  #9
                  Originally posted by JJ-Chester View Post
                  How can it be legal but not enforceable
                  Presumably if it had been "illegal" then the landlord would have been committing an offence simply by preparing the agreement and having your husband sign it. I don't anyone's suggesting that he should be arrested just for doing that (or maybe you do...!!

                  Comment


                    #10
                    Thanks for that Ericthelobster.

                    Comment


                      #11
                      Your post number 8 does open up some problems.

                      D does not have a right to withhold rent - only a court can make that decision. However, in this situation it is not clear what a court will decide. Unfortunately D has but minimal evidence of 'danger' and there has been no event to confirm the chimney was dangerous. There are specific actions she should have taken - see here and google the Housing Disrepair Pre Action Protocol.

                      IMHO daughter does not want a CCJ against her name and to be evicted. We all know that for many people, access to credit can be vital during kids early years. I strongly suggest she gets the amount of rent owing below 2 months worth, or even better clears all arrears. I also suggest she talks to the Environmental Health Officer at the local council about her concerns and starts looking for a new property in which she can feel safe to bring up the little one.

                      Comment


                        #12
                        Thank you Snorkerz for your advice.

                        Ironically, the next door neighbour who was having his roof repaired is a judge! D has discussed the problem with him and now has the bit between her teeth! His builder said he was able to lift a brick off the chimney and a couple of weeks ago a neighbour on the other side had to have the chimneys rebuilt on his property because they were unsafe. So maybe she is right. She has been in touch with the council and has a chap coming to inspect. Goodness knows what will happen next.

                        Comment


                          #13
                          Originally posted by Ericthelobster View Post
                          I'm sure this has been raised here before but I can't recall the outcome - but doesn't the provision of a roof over the head of one's beloved offspring (as opposed to, say, just a close but impecunious friend) count as a consideration?
                          Not really. The benefit, i.e. the provision of housing, is provided to the tenant. Further, the agreement to grant the tenancy and the guarantee are two separate transactions even if made by one document. The thing guaranteed has to come into being before the guaranteeing and that raises the point as to whether such consideration as there may be is past consideration - something else not allowed.

                          Any argument over these technicalities can easily be avoided by either making the guarantee a deed or providing for the landlord to pay the guarantor a nominal consideration.

                          Comment


                            #14
                            Originally posted by Lawcruncher View Post
                            Any argument over these technicalities can easily be avoided by either making the guarantee a deed or providing for the landlord to pay the guarantor a nominal consideration.
                            We've been here before LC. What do you consider to be a 'nominal' consideration?
                            I offer no guarantee that anything I say is correct. wysiwyg

                            Comment


                              #15
                              Eric, t'was I who suggested that the G is getting something ie a reward, for his troubles, not a monitory one but the security of a roof over the head of his offspring.

                              Yes, jta, I would like to know what such a consideration might be? a fiver a year, bottle of wine, certificate to say 'well done, you have been a successful G for 6 months'?

                              Comment

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