Unfair term in guarantee contract

[hjg159]

Would appreciate some advice on whether the following should stand in a guarantee agreement as I have just left a solicitor who seems to think I don't have a leg to stand on. I got charged handsomely for the privilege of telling me this, even though citizens advice seemed to think it was unfair...

I have served notice that I no longer wanted to be guarantor but the tenant will not move out regardless so I am not sure what I am supposed to do next, I can't force them out but can't see how I am ever going to get out of this otherwise, I have paid out over £2,000 already and there is another £3,000 they could come after me for...

The actual wording is "If the tenancy is periodic or becomes so by the agreement or operation of law, then this guarantee may be terminated by written notice by the guarantor subject to the tenant vacating at the earliest legally permissible date required for possession. If the tenant fails to vacate on this earliest date then the guarantee shall continue until the tenant vacates"

I gave written notice and asked what would happen next and they said they would issue s21 and start court proceedings for eviction, yet have done none of this and since then there is another £1000 owed. I am feeling totally hopeless after seeing this solicitor today, if anyone can help I'd be grateful

[R0b]

Re: Unfair term in guarantee contract

I'm no expert on guarantees but based on another thread i've looked into there is obviously certain formalities that must be met for a guarantee to be legally binding. A guarantor does have rights against the debtor however these could be excluded depending on the wording of the guarantee.

so, do you have a copy of the contract to upload, and omit any personal information on there? Secondly, I a solicitor is saying that you have no leg to stand on but Citizen's Advice says otherwise, what were their reasons for saying so - could you expand a bit further?

If you want to rely on an unfair term then it will be subject to the reasonableness test under the unfair contract terms Act. Additionally where the guarantor is signing on standard terms without any negotiation and is an individual consumer, then the unfair contract consumer regulations may also apply.

[stevemLS]

Re: Unfair term in guarantee contract

That's an unusual one IMHO.

I can see the purpose of the clause in that if a guarantor could by written notice escape their liabilities it would defeat the nature of the guarantee.

However, by definition, the tenancy has gone beyond the initial term and what you have, it seems to me, is a perpetual obligation which you never intended to enter into.

What is your relationship with the tenant - can you not exert any pressure on him/her?

In theory you could apply to the court, in my view, for an injunction that requires him to take steps to evict her, but that would, no doubt, be time consuming and costly.

Personal guarantees are notoriously tricky though and there are a few other Beagles with much more experience of them. They may be along to offer other thoughts.

(And apologies, I started writing this hours ago but was diverted by work, so there may be some intervening posts)

[MissFM]

Re: Unfair term in guarantee contract

Hi hjg159 & to LB,

It seems you're caught in a real double bind - because you can't issue proceedings to evict the tenant & if the tenant has no money there would be little point in you suing them (although I would be inclined to send an LBA to recover all your present & future losses nevertheless - it might galvanise them).

Meanwhile Landlord and tenant are sitting pretty at your expense. There's an unfair term there somewhere!

Neither can the LL evict with a section 8 on non-payment of rent, (which would be much faster than a sec 21), as the rent is being paid.

Although if you refused to honour the guarantee they could (serve notice on grounds of non-payment of rent) - but it would probably be more attractive to them to sue you, as you have the money.

I'm certainly not an expert (hope one will come along) but, on the face of it, the contract states that you can withdraw from guarantorship with notice at the end of the fixed term and you've given that notice. It falls apart, though, if you can't prevail upon the tenant to leave and the landlord takes no action to evict.

They should have served the section 21 immediately and if they haven't I would imagine - hope - that you could challenge any liability beyond what you would have paid had they initiated eviction proceedings at the earliest opportunity.

Was the solicitor you consulted experienced in this area of law?

[hjg159]

Re: Unfair term in guarantee contract

Thankyou to everyone for taking the time to reply. R0b and MissFM - the tenant is not able to pay the full amount of the rent so every month there is a shortfall of hundreds accruing which they are looking to me for. I'm not a homeowner and have no assets so to speak, and I can't afford for this to carry on forever as it seems likely to. The tenant has nothing of value. I will try and upload a copy of the paperwork I signed tomorrow as requested.

Citizens advice were of the opinion that the wording of the contract in terms of both the notice and the fees to be charged was too vague and to see a solicitor. The solicitor said he was able to assist after an initial discussion but when the paperwork was in front of him didn't seem to know anything worthwhile about the unfair terms in consumer contracts regulations and his best advice was to get the tenant to vacate - as if I hadn't already tried that countless times. Maybe I should have been more specific with him but I've never used a solicitor before and was pretty much going in blind (as I seem to have a habit of doing).

stevemLS they are a close relative, but I cannot do much as they prefer to bury their head in the sand. There is apparently a social worker assigned to them now who may prove helpful but nothing ever seems to be the breakthrough they need.

[dan_1207]

Re: Unfair term in guarantee contract

Generally speaking, your guarantor agreement must be renewed whenever the tenancy is.

[D2016]

Re: Unfair term in guarantee contract

Hi - did you successfully find a way of terminating the guarantor agreement, or limiting it to any degree? I am in the same situation and I am worried sick over it. I also have a close relative who has stopped paying rent as she says she can't afford to anymore as her benefits payments were stopped. She says she can't move out anywhere as she has a young child (claims the council told her she is not a priority on council waiting lists because she is already in a house).