Urgent – Guarantor form advice?

Urgent – Guarantor form advice?

9:37 AM, 7th February 2024, About 2 weeks ago 17

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Hello, I have been asked to sign as a witness to a deed on a guarantor agreement.

My friend’s daughter is renting a property in Belfast from July along with 4 other students. The students have all signed the TA (they signed today) along with the LL (signed last week) and now the agents are asking for guarantors.

I am not 100% sure if she actually HAS to fill in the guarantor deed. I have seen the TA it states:
“The rent is XXX pcm and shall be payable by standing order. All tenant guarantee forms and standing order mandates must be handed into to XXX (agency) within 1 week of signing the lease. In the even that the standing order or mandate and guarantee forms are not returned by this date the then landlord reserves the right to deem the Tenancy Agreement null and void and the landlord reserves the right to re-let the premise and retains all monies paid as a security deposit for the said premises. Until the property is re-let the tenants shall be responsible for the payment of any rent becoming due.”

(NB they paid £200 as a holding deposit to take it off the market and stop other viewings).

My questions –
1. I can’t understand how the agent can now ask for any guarantor to sign a guarantee form AFTER the TA has been signed. Surely if having a guarantor was part and parcel of the tenancy being offered and agreed, then this would be requested before the TA was signed and written into the TA as “A guarantor is required…..?” then the above wording would make sense.

2 The only reference inside the TA is under the heading Guarantor suggests it is optional – “If there is a guarantor, the guarantor hereby guarantees that the tenant will comply…….(usual stuff)”

3. Neither my friend (nor I suspect the other parent of the students) received a copy of the TA themselves at any point from the Agent before either the student (or indeed the landlord!) signed it.

Finally 4, If the TA is joint and severally, then surely they don’t need 5 separate guarantors anyway as one will do?

I’m confused what to advise her to do –
a) sign and return it, knowing it is going to be difficult for the LL to enforce (should he need to) it given the fact that they have never agreed to be one in the first place nor necessarily had sight of the TA before the students signed it themselves?

b) refuse to sign it because it the tenancy has clearly already been signed by all the parties involved (the LL and tenants already) and so the TA is no longer conditional upon the guarantee being signed.

c) advise that only 1 parent needs to sign one guarantor form (one of the parents who actually live in NI)

Obviously the wording about the LL deeming the TA as void is worrying her (the students need a property for the start of next academic year) so she doesn’t to lose the property for them.

Advice please!

Reluctant Landlord


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Comments

Noseyrosey

10:29 AM, 7th February 2024, About 2 weeks ago

Hi a guarantor should be signed same time as the tenants .with a witness it is a legal requirement because if the tentant fall into arreas the guarantor cannot be relied on for unpaid rent hope this helps .

Judith Wordsworth

10:58 AM, 7th February 2024, About 2 weeks ago

Probably the agents bog standard TA.
In the first instance get your friend to call the agent and speak to them. Explain her concerns.

I would be more concerned re the payment by standing order. Is this from 1 students bank account as lead on the TA? Would be preferable to have each student have a SO for their share of the rent but beneficial for the landlord to have a lead tenant in an HMO responsible and that lead tenant to have the guarantor.

Is your friends child the lead tenant? If so only need your friend to be guarantor.

But to answer your questions

1. Within one week of the signing of the TA depends on when the landlord signed it. There is no lease until the landlord signs and dates.

2. The landlord has probably asked for this. If renting out student accommodation I certainly would want guarantors.

3. Pure supposition. Did your friend ask their child to forward them a copy before they signed their copy of the TA? If not why not?
But best practice to send copy of TA along with the guarantor agreement so the guarantor knows what all the T’s and Cs are, not just covering the rent and damages.

4. Technically correct but could be deemed unfair to burden a guarantor for any breach of non payment by one party to the contract unless 1 student is the lead tenant.

a. Ask for sight of the TA. Prior to signing. Amend after speaking to the agent the guarantor agreement to state only guarantor to their child. If your friend acts as guarantor for solely their child what’s the problem?

b. The TA clearly states guarantor agreement to be signed within 1 week of the signing of the TA. There is no lease until the landlord has signed

c. If you are advising, then if it goes pear shaped you as advisor could carry the can. Get your friend to seek advice from the Uni student accommodation dept, Citizens Advice etc etc. Why the parent who lives in NI to be guarantor? Doesn’t matter to your friend where the guarantor lives, but does matter to the landlord should they have need to use the guarantee.

Get your friend to speak to the agents

DAMIEN RAFFERTY

12:50 PM, 7th February 2024, About 2 weeks ago

As a student Landlord with a HMO.
We ask for parent Guarantors for all tenants.
Are TA and addendum clearly state that the parent Guarantors are only responsible for their child and not the whole group.
Near all TA,s for students are Joint and Several.
The whole group is responsible for the whole rent
Would you hand the keys to a £3/4/500,000 Property to a group of 19/20 year old students with No credit history ?
This is why HMO Landlords ask for parent Guarantors.

Reluctant Landlord

13:44 PM, 7th February 2024, About 2 weeks ago

Reply to the comment left by Judith Wordsworth at 07/02/2024 - 10:58
Yes the agent states the full rent has to come from one account each month and it will be person named on the TA as the lead tenant (one of the 5 students).

I was thinking myself it might be best if the parent of the lead tenant is the guarantor. There is no need for all 5 students to all provide a guarantor if anything on the basis it is joint and severally TA anyway.

I have contacted the TDS who the agents use to ask about the deposit - that again goes in the Lead Tenants name and all the others are listed even though they are all putting equally towards it.

Seems to me to keep it simple for the students themselves to contact the agent and state this is what they propose.

Reluctant Landlord

13:55 PM, 7th February 2024, About 2 weeks ago

Reply to the comment left by DAMIEN RAFFERTY at 07/02/2024 - 12:50
I get the need for a LL to want a guarnator - not disputing this - maybe just the way the agent has gone about this is more the issue here?

The TA says nothing about the guarantor other than what I put in the original post.

The guarantor form they sent to my friend AFTER the TA was signed, is a bog standard one - saying nothing specific about the parent guarantor being responsible only for their child.

I cant see how, even if a guarantor is called upon how they can determine what damage is done or what rent part has not been paid if the TA is J&S and the rent paid by only the lead tenant? Am I being a bit dim here?

Surely one guarantor is all the LL and agent would need precisely BECAUSE the TA is J&S?

and as a student LL yourself, wouldn't you have wanted to check the status of the guarantor before the TA was offered as part of the initial checks?

I find it a bit odd the agent is asking for this now only after the TA is signed. Seems back to front to me???

Yvonne Francis

14:42 PM, 7th February 2024, About 2 weeks ago

I do think it a bit strange for the agent not to check out the guarantors before signing tenants on. I have let to students for 44 years and always check their guarantors before I sign them on, and I insist on parents, and ALL of them. I know in a Jointly and Severally liable lease its possible to make any tenant/guarantor responsible for the whole but if every tenant produces a guarantor then, as I have been advised, it's best to take all of them if they fail on the rent, or as many as its legal to take. Its simply UNFAIR to expect one tenant/guarantor to take directly the liability for the whole of the rent.
In my case for all the years I have let I have never lost rent, and no one else has ever paid anothers rent. So it does work.
My advice is negotiate with the agent and see what you can get away with if you have reservations .

Reluctant Landlord

16:44 PM, 7th February 2024, About 2 weeks ago

Reply to the comment left by Yvonne Francis at 07/02/2024 - 14:42
thanks for everyone's comments.

Have advised my friend that in light of the comments here and thinking all this through that if the agent is requesting that 5 forms are filled in, that each parent guarantor makes it clear in the guarantor form that they are guaranteeing only that child and therefore 1/5 of any claim if one needs to be made against it.

To be honest as the form is badly worded (isn't the landlords name supposed to be on it not the Agent and at least signed by the landlord too??), the fact that they have not done this before the TA was signed by LL and all tenants and that clearly no reference checks have been made, I fail to see how they can make a successful claim against this anyway as it doesn't even state anywhere on the form it is even a deed.???

Isn't the guarantor chased by the Landlord anyway not the Agent acting on their behalf

Simon M

16:55 PM, 7th February 2024, About 2 weeks ago

I agree the phrasing of the TA and the agents process could be better, but the terms are not uncommon, apart from the standing order/mandate.
I used to let to students, suffered some of the costs and problems, including parents in complete denial their child might be anything other than perfect.
Our sons rented when students and I refused to be a guarantor unless all students in the share also provided a parent guarantor. Otherwise J&S means I'd have been liable as single guarantor. Often a landlord cannot prove which student did the damage.
Tenants responsible for rent until the property is re-let is because landlord has agreed the rent for the year. If a tenant leaves that tenant and their guarantor should be liable. If they don't pay, liability falls to other tenants and their guarantors. It should encourage everyone to think about whether they will get on with and trust the others, though I think few do.

On a different tack, your friend might want to consider their daughter's alternatives. Personally I'd be asking how well the agent and landlord look after the property.

Martin

17:13 PM, 7th February 2024, About 2 weeks ago

Don't forget Holding deposits must be no more than the equivalent than 1 weeks rent and retaining it by setting a deadline is highly dubious, rent must of been around £900/month

Reluctant Landlord

17:20 PM, 7th February 2024, About 2 weeks ago

Reply to the comment left by Simon M at 07/02/2024 - 16:55
thanks for your insight. I think she is planning to go over with her daughter to pick the keys up on the start date and do a full inventory for her own peace of mind and check the place over, as the TA says nothing about an inventory being undertaken - which strikes me as odd.

My gut feeling on all of this is the LL has just handed the property over to an agent who clearly is doing the basics/bare minimum and expects the tenants not to bother questioning anything (as I expect a lot of students do!) I've checked with her that the HMO licence is in place and the LL is registered himself etc.

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