Can Guarantor give notice to end tenancy that has become periodic?

Can Guarantor give notice to end tenancy that has become periodic?

10:08 AM, 8th June 2021, About 2 months ago 22

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We have stood guarantor for a rental property for almost 2 years to allow the tenant to build up their credit rating. Up to now, the AST has been renewed every 6 months, and we have had to resign as guarantor. The landlord has now decided not to renew the lease and allow it to proceed as periodic. We do not see the need to stand guarantor any longer as the tenant has a credit rating now.

The tenant does not want to move and is happy for the current situation to continue. We would prefer not to be guarantors any longer than necessary as it affects our credit rating in terms of acquiring new mortgages for other rental investments.

Can we give notice on the tenancy as we are joint and severally liable?

Many thanks

Steven



Comments

by Gunga Din

11:15 AM, 8th June 2021, About 2 months ago

I think I'm correct in saying that the guarantor agreement duration is that of the tenancy agreement. If the LL insisted on a new one after the 6 month fixed term, they would have had to sign up a new guarantor agreement for each renewal.

If it was allowed to transition to periodic, the original guarantor agreement would still be valid, because no new tenancy has arisen.

by Robert Mellors

11:16 AM, 8th June 2021, About 2 months ago

I believe that if you are the guarantor then it will depend on the specific terms within the Deed of Guarantee that you signed, but in most cases you cannot end your guarantor status or liability, it will continue for as long as the tenancy continues (periodic or otherwise). The liability remains after the ending of the tenancy, i.e. you can be sued for the liabilities arising within the tenancy, for many years into the future.
If you are named on the actual tenancy agreement as a joint tenant, then I believe that you could give notice to end the tenancy, however, that would end the tenancy for the person living in the property (all joint tenants), and the landlord could then evict them (or charge mesne profits at double the rent level if the person remains there after the expiry of your notice).

by Judith Wordsworth

12:57 PM, 8th June 2021, About 2 months ago

Reply to the comment left by Robert Mellors at 08/06/2021 - 11:16
Brilliant to find out that "The liability remains after the ending of the tenancy, i.e. the guarantor can be sued for the liabilities arising within the tenancy, for many years into the future."
Found where the guarantor is so will send them a demand for what my tenant from hell still owes.

by Gunga Din

13:00 PM, 8th June 2021, About 2 months ago

I stand corrected and appreciate the education.

by steventayfield

15:51 PM, 8th June 2021, About 2 months ago

Thank you for your replies I was under the same understanding about the guarantor remains in place while the tenancy is in place. Which is the reason why I would like to end the tenancy as the tenant is of the opinion that it does not make any difference and is therefore not prepared to do anything.

I am named on the agreement but not as a joint tenant, only as the guarantor as I never intended to live there. My thoughts are that if I can give notice on the tenancy this will force the current tenant to find a new guarantor on a new AST or that the landlord will accept his credit rating as sufficient to enter into a new AST on his own.

This is why I would like to give notice.

by Robert Mellors

16:09 PM, 8th June 2021, About 2 months ago

Reply to the comment left by steventayfield at 08/06/2021 - 15:51

If you are not a joint tenant then you cannot end the tenancy. Only the tenant (or the landlord) can end the tenancy.
If you are a guarantor then you cannot end your liability as a guarantor, unless the terms of the Guarantor agreement allow for this (which is unlikely), otherwise every guarantor would simply cancel their liability once the tenant has moved in, in which case the guarantee would not be worth the paper it's written on and the landlord would have no protection against bad tenants.

by steventayfield

17:29 PM, 8th June 2021, About 2 months ago

Thank you for your clarification

by Paul landlord

0:40 AM, 9th June 2021, About 2 months ago

Reply to the comment left by Robert Mellors at 08/06/2021 - 16:09
Thats exactly how my guarantor agreements have been written for years. If the guarantor wanted out then it would have meant a section 21 for the tenant with the guarantor liable for all the costs up to vacation. Always been simple for me- no guarantor no tenancy. I've found in the last 30 years of being in this business you can always be surprised by a good tenant turning bad on you. No such thing as a tenant building up a 'credible rating' with me and not requiring a guarantor- burned too many times in the past to risk it.

Recently I decided to look at the NRLAs guarantor stuff- never used it before even though been a member for15 years. Had to phone them up to question the point of their agreements the stuff was so 'wishy washy' it was pathetic. They told me in their view holding the guarantor past the fixed term could now be seen as an unfair clause and hence in their agreements the guarantor can walk at the end of the fixed term and liability ended! They question the deeds we speak of and suggest that a judge could decide its an unfair clause that could invalidate the guarantor agreement in it's entirety!

Could do with clearing this question up especially in todays toxic anti landlord climate.

by Gunga Din

9:47 AM, 9th June 2021, About 2 months ago

That (NRLA guidance) must have been what I was thinking of in the first post.

by John Frith

10:34 AM, 9th June 2021, About 2 months ago

Yes, from when I last looked at it, the view was that the transition to a periodic tenancy was a new contract which cancelled the statutory tenancy. That if a new guarantor wasn't found, then there was no guarantor.
Unless case law has interpreted it differently, as it was with Superstrike?

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