Guarantors – Unfair Terms in Consumer Contracts Regulations 1991

by Readers Question

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

Guarantors – Unfair Terms in Consumer Contracts Regulations 1991

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Guarantors – Unfair Terms in Consumer Contracts Regulations 1991

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


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Comments

Dinah Pickering

16:04 PM, 19th May 2015
About 6 years ago

Reply to the comment left by "Ian Narbeth" at "19/05/2015 - 15:36":

Hi Ian,

Thank-you for your reply, much appreciated. The guarantor in this place pays the rent and on the first fixed term they offered 5 months in advance (which I accepted!!) now they are into their last month and my tenant who is 19 but on a low income wants to stay the parents who live in Oman want to only pay month to month. I have in fact requested minimum 2 months advance in any given time as quiet simply the tenant signed the AST not the parents. Can I state how many months I wish as long as the AST states this?

13:06 PM, 29th May 2015
About 5 years ago

Hi - as a lawyer I would need do see the paperwork but I am at a loss how the guarantor is using the Unfair Contracts Act.

Dinah Pickering

16:30 PM, 29th May 2015
About 5 years ago

Hi Peter, Thank-you for your comment. The father has now agreed to pay the requested advance payment which allows myself as the Landlady 2 months deposit. Since the AST states monthly rental I am planning to protect the additional payment as 'additional deposit' and issue the correct information accordingly. What a great forum this is....:-)

Simon Topple

23:38 PM, 31st May 2015
About 5 years ago

It is generally accepted that guarantees should be for the initial term of the contract and not for any ongoing committment once it becomes periodic. You can state on the guarantor deed that the guarantor is liable for any extensions, but don't expect this to hold water if you go to court.

9:09 AM, 1st June 2015
About 5 years ago

Hi - A guarantor is a guarantor for the term and will, in my view, continue during periodic as well unless it states in the deed that it is for a certain term.

Chris Brown

11:29 AM, 1st June 2015
About 5 years ago

Reply to the comment left by "Ros ." at "05/05/2015 - 12:30":

Ros

That is a useful bit of info: obviously the Agent concerned will need to show he checked the guarantor met that criterion. In my ignorance, I had always assumed that the ideal guarantor had a real asset [e.g. owned their own dwelling].

Chris Brown

11:29 AM, 1st June 2015
About 5 years ago

Reply to the comment left by "Ros ." at "05/05/2015 - 12:30":

Ros

That is a useful bit of info: obviously the Agent concerned will need to show he checked the guarantor met that criterion. In my ignorance, I had always assumed that the ideal guarantor had a real asset [e.g. owned their own dwelling].

Roy B

21:08 PM, 4th June 2015
About 5 years ago

Reply to the comment left by "wayne carson" at "05/05/2015 - 13:17":

What use is a guarantor if you persuade your clients not to chase them for the money?

8:40 AM, 5th June 2015
About 5 years ago

Hi - I would not let this go and go for the guarantor and the tenants. Tenants need to realise they can not keep causing problems, especially financial to the landlord / owner, and get away with it. I deal with cases like this all the time as a lawyer and feel strongly on this subject.

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