Guarantors – Unfair Terms in Consumer Contracts Regulations 1991

Guarantors – Unfair Terms in Consumer Contracts Regulations 1991

9:51 AM, 5th May 2015, About 6 years ago 59

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I let out one of my properties and the estate agent that dealt with the letting obtained a guarantee. The guarantor is a 20 year old who was a friend of the tenant earning one quarter of the tenant’s salary. The guarantee was drafted by the letting agent so that it continued to apply to any increased rental and/or to any continuation, extension or renewal of the tenancy.

The tenant trashed what was a newly refurbished house, but the AST had expired in the September and we obtained possession by the following January. We couldn’t renew the tenancy because he was in arrears. We have taken action in the small claims court against the guarantor and this is being defended on the basis that the guarantee has fallen foul of the Unfair Terms in Consumer Contracts Regulations 1999.

I was wondering whether it is worth pursuing the claim in light of the terms or whether anyone thinks we would have a reasonable chance of success. The guarantee was witnessed and as I say it was produced by the estate agent not us.

Nicolaunfair



Comments

by Tessa Shepperson

13:18 PM, 9th May 2015, About 6 years ago

You need to make it very clear in the evidence given to the Judge that the damage was done during the time the guarantee was indisputably in operation.

If may even be worth doing a formal response to the defence stating this.

Don't expect the Judge to pick this up without you telling him. It is up to you to explain your case.

by

13:22 PM, 9th May 2015, About 6 years ago

Reply to the comment left by "Tessa Shepperson" at "09/05/2015 - 13:18":

Thanks Tessa that's really helpful and I will make sure that I go for that angle.

by Puzzler

13:24 PM, 9th May 2015, About 6 years ago

How come the guarantor was accepted in the first place? Seems as though she didn't understand (and was also totally unsuitable from your point of view). If she didn't realise the implications then she can possibly invoke the UTCCR as one of its terms is that both sides agree their liability. What has the agency got to say about it? They would appear to be the ones at fault.

by Tessa Shepperson

13:46 PM, 9th May 2015, About 6 years ago

by

14:00 PM, 9th May 2015, About 6 years ago

Reply to the comment left by "Puzzler " at "09/05/2015 - 13:24":

The letting agents have been very quiet on the whole subject! Initially the guarantor tried to wriggle out of it by saying that she is only 20 but backed down when I told her that you have legal capacity at 18. She then went along the lines that she was coerced into signing it but again I pointed out that it was signed in front of an independent witness. The guarantee does not however say to take legal advice and she thought she was just guaranteeing that he would pay the rent but it does clearly state that the guarantee is for the covenants under the tenancy as well as the rent. I guess this could really go either way at court. I did have the same guarantee a few years ago and the guarantor paid up after taking legal advice and the tenancy had been renewed a number of times over the years. It's worth trying for the sake of £205 court bill and see where it goes.

by John Frith

14:38 PM, 9th May 2015, About 6 years ago

Reply to the comment left by "Nicola Everden" at "09/05/2015 - 14:00":

If it was me, I would, at trial, point out that the UTCCR 1999 specifically applies to contracts, and that a guarantee is usually not a contract (whether or not it is executed as a deed). That should nullify the main thrust of their defence.

Then point out that the rent has NOT been increased, there has been NO new AST, and that the terms of the contract that was guaranteed have NOT been altered, so you are not trying to enforce any allegedly unfair terms. To me that seems to leave them with no defence at all. They would have to be pretty hot to come up with any alternative defence with no notice.

by Lucy McKenna

14:39 PM, 9th May 2015, About 6 years ago

I read through all the replies looking for this answer given by Tessa at 11.27.
"2. Bring a claim for your losses against the agents – they should have used a proper deed of guarantee and got it re-signed when the rent went up or the tenancy changed."

This surely must be the simple answer. Take the agent to the small claims court. They charge landlords huge fees and the least they can do is supply good water tight contracts that are enforceable or tell you the risks that their contract may give, as in the case of a guarantor, giving you the chance to accept or decline. It is a one off cost to the agent for all their clients and so very affordable. I don't know if the small claims court can be used for this type of case, if not I have found that just one letter from a good lawyer will get estate agents to back down. They may not want to write you a cheque but they could let your next two or three properties free of charge. The other point I picked up was beware of costs being awarded against you.

Good luck.

by Tessa Shepperson

14:42 PM, 9th May 2015, About 6 years ago

@LA You need to be careful about this. It now looks as if this guarantee IS enforceable in which case a claim against the agents may not be sustainable.

Unless of course you can reach agreement with them short of going to court ...

by

14:46 PM, 9th May 2015, About 6 years ago

Reply to the comment left by "John Frith" at "09/05/2015 - 14:38":

John

Thank you this is really sound advice.

by Neil Robb

18:48 PM, 9th May 2015, About 6 years ago

Hi All

We see all these things all the time Tenant does not pay rent.

Tenant wrecks the property.

The tenant does a runner taking the furniture.

The guarantor Claims they are not responsible even the though they signed the agreement.

If a tenant takes on a property with the intention not to pay rent surely this should be a criminal offence fraud.

The tenant wrecks the property causing damage. Again Criminal offence vandalism.

The tenant takes the furniture. Theft

Guarantor signing Stupidity.

Agent not doing there job correctly and taking money for it. Should be obtaining money by deception.

Agent getting rent and not paying it to landlord. Fraud ? Theft.

Councils and shelter informing tenants how to stay in the property and not pay the rent. They should be held liable to pay landlord costs it will amaze you how they would no longer be telling people how to abuse the system.

Housing benefits tenants claiming money for rent then keeping it. Fraud

Housing benefit tenant fiddles the system and they go after the innocent Landlord who knew nothing about it.

Sorry but now to my point why is the law not simple and clear on this. It would save a huge amount of time and court costs for all concerned.

If people where held to account for there actions then there would be less problems.

Nicola I personally think you should claim from both the tenant and the guarantor. And I hope you get something back even if it is only knowing the satisfaction that they had a judgement against them. Put the tenants name on the landlord reference site for bad tenants.

Eventually when they grow up and want to achieve something and this back fires on them because of their actions. Then karma will teach them treat people the way you want to be treated.


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