UK Law

I am signing as guarantor for my niece and am concerned at…

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I am signing as guarantor...
I am signing as guarantor for my niece and am concerned at what I am being asked to sign: If I die during currency of agreement then my estate will be liable as surety; for any overpayments if rent paid by housing benefit I am liable for the amount of any claims and up to seven years afterwards.

Should I sign or ask for them to be deleted... Read full answer
I am signing as guarantor for my niece and am concerned at what I am being asked to sign: If I die during currency of agreement then my estate will be liable as surety; for any overpayments if rent paid by housing benefit I am liable for the amount of any claims and up to seven years afterwards.

Should I sign or ask for them to be deleted
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Answered in 5 minutes by:
11/21/2012
Jo C.
Jo C., Barrister
Category: UK Law
Satisfied Customers: 73,700
Experience: Over 5 years in practice.
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Hi

Thank you for your question and welcome to Just Answer. I will try to help with this. Please RATE my answer OK SERVICE or above.


What type of contract is it?
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Customer reply replied 6 years ago


Guarantor agreement for tenancy for flat

James Mather
Category: UK Law
Satisfied Customers: 22,630
Experience: Senior Partner at Berkson Wallace
Verified


I have been asked to look at this for you. Is this the
landlord asking you to sign this? Who is it for?

The wording is standard and he is most unlikely to remove
anything because, if I was being asked, I would tell him not to remove anything.
However, it is his decision. He wants to make sure that he does not lose out in
the event that the tenant has missed declared when claiming housing benefit and
also if the tenant does not pay the rent.



Basically, you are at risk for the full tenancy period if
the tenant does not pay rent. There is usually no way out of it, so it could
cost you thousands of pounds, depending on the term of the tenancy and the
amount of the rent. If part of the rent is being paid by housing benefit, which
goes to the landlord and the tenant has over claimed and the housing benefit
people want it back, and the tenant does not have it, the landlord will not
give it to them or the landlord will give it to them and ask for the money from
the guarantor, you.



If you die, the money that you leaving your estate is at
risk once again, if the tenant does not
pay rent, the money will come out of what would normally have gone to your
beneficiaries.



The only way to guarantee that there is no claim made
against you or, if you die, your estate is for the tenant to be completely
honest, when claiming housing benefit and for the tenant to pay the rent on
time every time. Provided that happens when you have no problem and can sign
with impunity.



I imagine this is for a family member you trust implicitly.
But I have had literally hundreds of these over the years I have been a
solicitor, where the guarantor trusted the family member implicitly and the
family member simply let them down without second thought.



My advice to anyone being asked to go to guarantor is don't
do it. I accept that the tenant may not get the tenancy if they do get a
guarantor, but the only usual reason for asking for a guarantor is if the
tenant has bad credit history. Although some circumstances are tragic, or
unfortunate and circumstantial, most bad credit history is because the person
with the bad history does not have a good history of paying. That told you lot
as to whether you should do this.



I appreciate that this is not the answer you wanted and I
have probably exaggerated to prove the point, but you are pot at financial risk
by signing this.



Can I help further?



Please do not forget to rate my answer positively because I
have not been paid for my advice until you do.. It is really important that you
rate my answer positively. It does not close the thread which remains open for
us to continue this exchange. If you wish. Thank you.

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Customer reply replied 6 years ago


Hello


 


Thanks for the response, just a further question the housing benefit and guarantor dieing are in two separate clauses, I have given the death one below, does it mean that even though I have died that if the agreement is still in place that my estate continues to be liaible even if the debt is accrued after I die?


 



  1. The Guarantor shall pay and make good to the Landlord on demand all losses, damages, costs and expenses of the Landlord arising from or incurred as a result of any default by the Tenant in the performance or observance of the Tenant’s covenants under the Tenancy Agreement. Any failure of the Landlord in demanding or collecting the Rent when it falls due, and any time to pay which may be given to the Tenant by the Landlord shall not release or exonerate the Guarantor or in any way effect the liability of the Guarantor under this agreement. Should the Guarantor die during the currency of this agreement, the Guarantor’s estate will be liable as surety and co-principal debtor.


Kay


 


 



It basically says that it makes no difference whether you are
dead or alive!

There is one stipulation that you do want in there and that
is that this guarantee only extends to the extent of the initial tenancy and
not any renewal tenancy or holding over (extension).



Otherwise, it can come to the end of the term, the tenant
can sit tight pay no rent and the landlord has no interest in getting the tenant
out because the landlord can sue you for the rent.



Please do not forget to rate my answer positively because I
have not been paid for my advice until you do.. It is really important that you
rate my answer positively. It does not close the thread which remains open for
us to continue this exchange. If you wish. Thank you.

Ask Your Own UK Law Question
Customer reply replied 6 years ago

Hello


 


Last question - he has also put an exclusion regarding cancellation, as below in but not sure why?


 



  1. It is agreed that there shall be no right to cancel this Agreement once the tenancy has begun and the Consumer Protection (Distance Selling) Regulations 2000 shall not apply in this case.


Excellent service and thanks for the honesty, much appreciated



Under the Distance Selling Regulations, if you have not been
in the office to sign this but they sent it in the post, email, whatever, you
have seven days to cancel after signing it.

What he is saying basically is that if you have been sent
this and signed it and the tenant has moved in, you cannot cancel it within the
seven day statutory period.

Please do not forget to rate my answer positively because I
have not been paid for my advice until you do.. It is really important that you
rate my answer positively.

James Mather
Category: UK Law
Satisfied Customers: 22,630
Experience: Senior Partner at Berkson Wallace
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