UK Landlord Forum / Life

I received this email earlier today. What do you guys think? (I've slightly edited the original email)

I have offered to go as Guarantor for my friend (I know, bad idea but i was put on the spot).

My friend has quite a lot of money in the bank and is a self employed tradesman so he's loaded to say the least. However, he's recently sold his house after finding out his wife was basically the work bike (while they were married though) and swiftly kicking her to the curb.

Anyway, long story short - he is now looking to rent and requires a guarantor.

I have advised the letting agent that i am happy to Guarantee him for his initial 6 month agreement but for no longer. The (as yet unsigned) Deed of Guarantee states:

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'The guarantee shall continue throughout the period that the property is occupied by the tenant or by occupier(s)licenced by the tenant including any extension or continuation or any statutory periodic tenancy which may arise following the end of the period set out in schedule 1 of the tenancy agreement'

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Now, i know that if i sign this he can essentially stay there forever and i'm still responsible for any unpaid rent / fee's / expense etc. I can technically afford to pay his rent and should the need arise, i would pay it - no questions asked. I am however, planning to jack in work completely as of the end of August so i could not cover it after that.

I have requested something, anything in writing from the letting agent stating that i am released from all responsibility from X date - to which they stated "That wouldnt be legal"; I advised that i really dont care if its legal - it would look really good for me in county court if they didnt remove me from X date though.

They have now offered to serve his notice tomorrow (this is why its an urgent query - he's due to sign tomorrow night) to state that he must vacate at the end of the 6 months, meaning he would need to sign a new agreement with a new guarantor or vacate at the end of six months from tomorrow - therefore releasing me at that point.

I telephoned them and asked if they HAD to enforce this document or if in fact they could just rip it up as soon as i signed the deed of guarantee and allow him to stay there forever - the agent advised they could in fact do that.

I find it strange (Not strange - just c*ntish) that they refuse to write me a simple note stating that they are acting on behalf of the landlord / release me from X date / quick couple of signatures - Job's a good'n.

The whole thing seems a bit fishy - and they're quite a large letting agent (Reeds Rains).

What's your take on the whole 'Serve notice to vacate now and he'll need a new guarantor' thing?

Any advice would be great (and please dont say "Dont be a guarantor" because i do want to help my mate) 

Many thanks.

You say he is loaded, and that has me wondering why he really needs a guarantor, though I also know that many of us landlords like to have them as a safety net? 

So, the agent is saying that it wouldn't be legal for you to say you only wanted to be guarantor for the initial six month period, yet it seems legal for them to serve notice when your friend is moving into his rented property stating that he must vacate at the end of the 6 month period or sign again with a new guarantor?  Doesn't quite seem logical somehow, and may amount to much the same result in the end.  If that is all they will do then I would take it, just to have an end in sight, and also because I prefer to keep my friendships and finances separate as far as I can.  After all, if you stop working at the end of August your circumstances may change sufficiently to make you less able to guarantee someone else's rent, so I would see no other choice.

Anyway, that is my "take" on it, though I guess it doesn't really help very much.  I don't have a legal brain. 

My advise is: Don't do it. Tell your friend he should pay 6 / 12 months in advance, plus offer 2 months deposit, that should sort out the issue imho.

-Armin

Hello Admin,

Yes, I've had the "that would not be legal" verbage when an agent is asked to vary a standard form.  What I actually hear is "we can't be bothered to change our standard form".  The law tries to give a wide lattitude to people to contract with each other on any terms they mutually agree to.  It's perfectly legal for your friend to be a guarantor for the first six months of the tenancy.  They're perfectly bone idle.

And don't be fooled by them ripping up a copy of the contract.  That is destroying ~evidence~ of the contract.  You need to prove physical destruction was accompanied by an intention to release you from your obligations.  If you're released, you need to get it in writing.

I'm also confused how we can be very well off and need a guarantor.  Something not stacking up.  It may be difficult, because you really want to help your friend, bu I wonder if they are as wealthy as you think they are.  You may be more likely to be called upon than you think.  If they were, they'd get the kind of credit check report which does not lead to a guarantor being requested.

You say you would be more than happy to pay his rent should he default in the next six months, whilst you can afford it.  Then do that.  When six months is up and he's got a good payment record and been a great tenant for the landlord, the letting agent might take a different view on the matter.  It gets him out of his problems today and allows him to plan for what he's going to do in the summer.

I'd be very cautious about being a guarantor. For a number of reasons;

many people can appear to be loaded but it's all on credit ie borrowing money for a high lifestyle, I know so many people that are more concerned with material things and how they are perceived instead of being prudent and sensible. I don't need to wear Gucci sunglasses but can guarantee if I wanted to buy them I have cash on the hip!

If they need a guarantor something is amiss, he may have failed a credit check (borrowing loads, not repaying, see above!!) If he is self employed they would ask for accounts and proof of ability to pay the rent, possibly contacting his accountant. If he cant provide this, then be cautious.

Finally, if he is strapped for cash, borrowing loads, unable to repay etc it's only a matter of time before he defaults on rent and you are liable. For example if he enjoys the fine life he is more likely to spend his £700 rent on holidays/clothes/nights out and leave you to pick up the bill.

I'd be very cautious - then again thats my nature, I work hard for what I have and don't particularly like giving it away. Also working in a bank makes you extra prudent, if I'm lending thousands I need to know all the facts etc. I apply the same rules to my own lifestyle..

Hi All,

Thanks for the advice - the Landlord posted this for me as i couldn't get registered.

He emailed me to advise of this and also that he had edited the original email as there was something in there that probably shouldn't be made common knowledge - unfortunately, this raised the question 'If the guy has money, why does he need a guarantor?'

Simply, he's behind with his books.

He has no credit cards or debt but a wedge of money in the bank. As he didn't have payslips to show them (or an SA302)  they wouldn't credit score him. He never puts any cash in the bank either (Other than savings) so his credit history as it is wouldn't get him past a credit check.

I'm ex-taxes so i'm sorting his books now and working on building up / repairing / maintaining his credit rating which should only take 3-4 months and he should really pass any credit scores in future but my worry was, should he not pass - the agency would rely on my guarantorship (is that a word?) and potentially let him sign up for another year therefore tying me in.

Not that i dont trust him but should he lose an arm or something like that then he wont be able to work and those savings would soon vanish i would think - Did i mention he has no insurance against such things?   

Anyway, i now have in my possession:

Letter from LL and LA stating that my responsibility as Guarantor ends as of X date.
Confirmation from LL and LE that notice has been served and tenant must vacate / re-sign with new guarantor from X date.

They advised that the first one wouldn't stand up in court but should the worst happen, we shall see   
Realistically, you cant get much more black and white than that.

Oh yes, the other thing was - the D.O.G itself - this was misprinted so the copy they got back didn't actually state D.O.G. on it - one side had the letter on that they sent me and the other had all of the boxes to complete but no terms and conditions just empty boxes for signature / address / witness - No mention of 'D.O.G'.

According to some posts on the forum, this goes a long way in court?

Last thing - i got a cheque off him for the full amount for 6 months in case he gets hit by a bus (Takes them longer to freeze an account on death than to cash a cheque) so i should be ok.

Like i say - i know for a fact he has the cash because i now manage it for him and i know what he earns so there's no problem there. Also, even though i have put the above measures in place - i doubt there'll ever be a need (In the next 6 months) for me to step in and pay, i just don't want a nasty shock in 5 years when i'm well into semi-retirement.   

Once again, thanks for the comments and any more subsequent thoughts on the matter. 

Hello Pedro,

A bit off your original topic but: Many years (in fact a couple of decades ago) I used to work in the insurance industry.  Your friend might want to think about taking out a Personal Accident policy.  Provides lump sums and up to two years income replacement if he has an accident that robs him of a body part, like an arm.  Many moons ago, this cover used to be cheaper than you'd think.  Maybe it's still good value now?

Hope it works out all right for you.

Thanks for your input Jeremy, but its already top of the list :-)