Will a guarantor letter be valid if the tenancy agreement is renewed?

Will a guarantor letter be valid if the tenancy agreement is renewed?

9:18 AM, 5th March 2024, About 3 months ago 8

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Hello, Does anyone know if a guarantor letter is still valid, if I renewed the original tenancy agreement with the same tenant? I have got a guarantor letter when the tenant first moved in 2009.

A year later, a new agreement was issued changing payment terms from weekly to monthly to help the tenant managing their finances, although they never changed their payment term and continued to make weekly payment instead of monthly payment as stated in the new agreement. No further agreement was raised since then.

Can I still use the guarantor letter to chase for unpaid rent?

Thank you,

S


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Comments

Judith Wordsworth

10:10 AM, 5th March 2024, About 3 months ago

Depends on what your Guarantor Agreement states. Hopefully you have one signed, dated and witnessed by the Guarantor which includes a clause that covers renewals and running on to a periodic tenancy.
If you are relying on a letter for the original tenancy what does that letter state re the term? If states the term of the original tenancy then no, highly unlikely you could use it to obtain your tenants arrears.

DPT

10:26 AM, 5th March 2024, About 3 months ago

If its just a letter then it may not have even been enforceable from the start. Guarantor agreements are usually signed as a deed with a witness to ensure they are binding. I think its unlikely that any original agreement would survive a tenancy renewal or a rent increase.

Kate Mellor

14:13 PM, 5th March 2024, About 3 months ago

No, a tenancy renewal is a new tenancy. You should have had an unlimited deed of guarantee and even then it wouldn’t survive a tenancy renewal. You can make a demand, but if they don’t pay you won’t really have legal recourse. Sometimes the threat of a claim against a guarantor can be enough to get the tenant to pay their arrears, or for the guarantor to put some extra pressure on them to pay.

Felicia Osinowo

17:25 PM, 5th March 2024, About 3 months ago

Hi there
I had a similar situation. My tenant was in the house for 15 years until January 2023. She refused to pay any rent increases & as a result accumulated rent arrears. Luckily for me I applied to the housing benefit section and received direct payments.
Shortly before court hearing unexpectedly her brother paid money into my account because the council would not rehouse her because of rent arrears. The guarantor was not traceable.

Julesgflawyer

21:27 PM, 6th March 2024, About 3 months ago

Reply to the comment left by David at 05/03/2024 - 10:26
Just need to be in writing and signed. Section 4 Statute of Frauds Act 1677.

DPT

14:02 PM, 7th March 2024, About 3 months ago

Reply to the comment left by Julesgflawyer at 06/03/2024 - 21:27At a minimum a guarantor agreement would need to be a contract, but the consideration is lost if the tenancy agreement is signed first, in which case it would need to be signed as a deed, (Law of Property Act 1989)

Julesgflawyer

14:12 PM, 7th March 2024, About 3 months ago

Reply to the comment left by David at 07/03/2024 - 14:02
Surely the consideration (for the guarantee) in the absence of a deed (where no consideration is required) is the granting of the tenancy, and if that is the case I'm not sure the sequence of events matters. Id be interested to know of any authority on the point though, as it isn't one I've considered. I agree that in practice most guarantee agreements are by way of a deed, to avoid any uncertainty.

DPT

10:14 AM, 8th March 2024, About 3 months ago

The only case I can find is that of Signature Living Hotel Ltd v Sulyok [2020] EWHC 257 (Ch).

I understand there has also been some debate about whether the tenant being housed is sufficient consideration for the guarantor in a contract, but most legal articles I've read seem to think it is.

As you say, to be certain it's usually better to go for a deed.

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