My tenants guarantor wants to be set free from the contract as they have fallen out. The contract has been rolling for just over two years. My tenant doesn’t have a replacement guarantor and wants to stay. She’s always been a good tenant and has young children.
I really don’t want to issue a Sec 21 but the guarantor is asking me too. The tenants rent is mostly paid by income support. If I issue a section 21 it is very likely that the council will tell her to wait to be evicted. Looking at clause 9.38 below it looks like any eviction cost would need to be covered by the tenant and therefore potentially the guarantor. Am I correct?
9.38. To return the keys of the Premises to the Landlord by 2pm on the day of vacating the Premises, otherwiseemphasized text
all costs of gaining entry to the Premises and resecuring the Premises will be borne by the Tenant.
Also the guarantor says that her solicitor says that if I increase the rent (which I would like to do) then they are able to get out of the contract. 15.1 below suggests to me that so long as the tenant and myself agree to a rent rise the guarantor has agreed to go along with it. Am I correct?
15.1. In consideration of the Landlord agreeing at the request of the Guarantor to accept the Tenant as the Tenant of the Premises the Guarantor hereby agrees to fully cover and compensate the Landlord for any loss, damage, costs or other expenses arising directly or indirectly out of any breach of this tenancy or any extension of continuation of the tenancy including any rental increase agreed between the Landlord and the Tenant.
Thank you in advance for your responses.
Just my view:
Realistically, what are your avenues for pursuing a guarantor for unpaid rent? Court action? Can not be worth the hassle or cost on top of almost certainly having to issue a S21. The guarantor’s request to be let out of a rolling (I assume periodic) tenancy isn’t unreasonable given that they have fallen out with the tenant. These things happen.
Why would you evict a tenant if she has always been good for the rent ?
Guarantor has signed a legal document if sign as a deed , very difficult for them to get out and rent rise makes no difference.
It could be fact or it could be fiction, regardless of this the position still and should stand. I dont see how this changes anything other than perhaps more resistance to paying by the guarantor. Agreements such as this don’t change just because of feelings. It would render the guarantor process just worthless if they think they can just shirk their responsibilities. If there was a replacement only then I would consider.
15.1 seems certainly seems to allow for rent increase to which guarantor still remains responsible. (In my opinion)
Where was the guarantor contract from?
Your guarantor is bind by the contract. the fact they have fallen out with the tenant has nothing to do with you. If the tenant is is a good one then just tell the guarantor that they are bound by contract law and just have to suck it up.
Offer to accept another guarantor f the tenants can find one - but if not warn them that if you start an at their request eviction at their request they will be liable for any costs - and will have to cover any rent the tenants fail to pay during the eviction process . Make clear to them you will not release them while the tenants are in the property.
Agree with others here. Guarantor cannot be released from their legally binding contract - a bank, mortgage lender would not release a guarantor from their contract so would should you. This is the risk a guarantor takes when sigining the contract.
If your tenant is good and pays the rent then no need to spend time and money to evict them.
Rent increase will not make a difference to the liability of the guarantor.
Its openrents contract. Confusingly though when I go to open rents rent change section it says words to the effect of make sure you agree this with any guarantor. I concerned at this point that the contract might not be worth the paper its written on.
Its the openrent contract.
Nilesh is spot on guarantors seem great but collecting it? Do you absolutely know they own their own house for example ?
Just release the guarantor and keep your tenant and move on.
What is the point of a guarantor if you just release them when they request it?
Do not release the guarantor, even with rent increase they are still liable. They signed as guarantor having read the AST which should have section covering rent increases.
Do not serve a section 21 if your rent is being covered
To increase the rent write to the tenant with a clear months notice.
That letter will then be fw to the UC team and she should get more allowances.
If she says she cannot afford it the she must leave as sad as it is. If she doesn’t serve a section 21
Keep a written log of letters, calls, texts, WhatsApp and email.
I had exactly this situation.
As there was no replacement offered I declined. Good job I did, later on the tenant stopped paying and later on still when they moved out the damages were extensive.
They stopped all contact and the only way forward was when I contacted the guarantor.
So if a guarantor has signed a contract and guaranteed it for the last 2 years does that mean they HAVE to temain for the rest of theirvlives. I certainly wouldnt sign such a thing with no way out no matter who or what the tenant is to me. I wont rent to someone who needs a guarantor. At the end of the day it is a business. If it was a business purchase would you sell to them knowing they cant afford it. Landlords have enough issues currently without this.
@Christine2 A guarantor will become standard soon. I will protect myself as much as possible regardless of how the tenant appears to be.
It’s about risk assessment. They may afford it today but not tomorrow. Jobs in public sector are more secure for example.
Like I said I would consider removing a guarantor but only if replaced with another.
I usually just say no in this situation and don’t let the guarantor be released from their responsibilities. It’s not your fault they have fallen out and chances are they may make up again and become friends again but thats besides the point.
The guarantor agreed to be guarantor and that’s that. I would just simply say the only way the guarantors responsibilities will end is when the tenant actually moves out the property and while the tenant remains in the property they are the guarantor and it’s as simple as that.
I can also see on the agreement that it clearly states any rent increases the guarantor has also signed to agree to this, so increasing the rent effects nothing!
I have had many situations like this and been to court where the tenant has left owing rent or damage to the property and the guarantor has put in a defence to the court to say say they asked to be released as guarantor and the judge has dismissed their defence and said you clearly signed to be guarantor and that’s that!
I would just simply say they can not be released as guarantor until the tenant moves out and leave everything as it is and increase the rent as you intend to.
So presumably you will expect every tenant to have someone willing to sign their life away guatanteeing someone elses debt. I think unrealistic comes to mind seeing as no one not even the guarantor knows whats around the corner. If thats the way it goes I couldnt be involved. I certainly could not sleep at night if 2 people go under instead of 1.
@Christine2 While I have typically 70 plus applications for a property then yes maybe I will. Certainly if things get tougher on LL. Not unrealistic at all based on previous experience, in the areas i have property.
If section 21 is scrapped then it will be all the more common.