Legality of a Guarantor Deed

[Linda0704]

Hi, I would be very grateful if someone could advise me on a Deed of Guarantor. I will try to be brief! I was a Guarantor for my daughter & partners Tenancy agreement in 2018. I was told it would only be for the first 6 months until a new Lease was agreed. I did not receive any paperwork about a subsequent change in the Tenancy Agreement 6 months later which became a Periodic tenancy agreement because the Landlord tried to charge a fee which was, by then banned. Due to Covid and lockdown, my son in law's work completely stopped and he was one of the 3 Million Excluded. They were on a small amount of UC to pay toward the rent but this, in no way covered it. In spite of intense negotiations, the Landlord & his agent refused to come to any agreement about the payment of arrears. In spite of the Government advice about eviction, they were issued with a Section 21 after 3 months. I have subsequently discovered that the Deed of Guarantor & the Tenancy Agreement is issued in the name of a subsidiary of the Landlords company and is, in fact a Dormant Company and files no tax returns and shows no income. Is this Deed Legal please?? Can it be enforced? It has turned into a bit of a nightmare to be honest!

[nightwatch]

Hi, linda,

Sorry i know nothing about tenancy agreements, I will see if PlanB is about to see if she knows about anything that may help.
NW

[Linda0704]

Thank you

[Joanna Connolly]

Hi Linda

It is difficult to help without seeing the personal guarantee you signed. You say in your post that you were told it would be for the first 6 month period- was that confirmed in writing any where or if not was someone else present at the time?

[Linda0704]

Hi, The landlord is, of course, disputing this. I have a signed Agreement although it is signed in the wrong place. The Agent was a bit hopeless. However, my main query is about how a Dormant Company showing no income from Rentals or Tenancies, can issue a Deed of Guarantee for a Tenancy. It is quite clearly in this Company's name. They are also still holding the deposit for the Tenancy, which was not actually placed in a Deposit Scheme but "insured" which means, they still hold the money. They are refusing to even discuss that and have not yet deducted it from the amount owed. I really need to know whether you would know if the Deed would be legal if issued by a company who is not trading. Thank you.

[Joanna Connolly]

Hi Linda if you would like to send me a copy of the signed agreement I will be able to advise further. Companies house accounting records are not up to date. The company may have been dormant when last accounts filed but had started to trade subsequently

[Linda0704]

Hi, No, we have checked. They have been dormant up until last accounts filed last tax year. This Tenancy was taken out in 2018 and when we checked it has never filed any income from the Tenancy or the other tenancies it may manage. I only wondered if there is something in law about Dormant Company issued Deeds. It is going to court as they are being so difficult about the arrears and even though my family still have no real income until they can go back to work on the 12th April, they will not negotiate any agreement. I am a pensioner with only my home as an asset. The Landlord is a multi millionaire. So much for pandemic policies but I guess there will be so many tenants going through the same thing as there appears to be no help for tenants and their arrears, through no fault of their own.

[Joanna Connolly]

Hi Linda

If the tenancy was taken out in 2018 then it would seem the the company was not trading at the time which is problematic for them. The guarantee itself could be unenforceable but I would need to see it to help further.

[Linda0704]

Hi Joanne, I have emailed you direct.

[Joanna Connolly]

Hi Linda

I have received the email. I have reviewed the guarantee and I consider that a court would find that the following provisions to be unfair terms and therefore unenforceable:

1. The guarantee to continue so long as the tenant is in occupation and notwithstanding any changes to the tenancy

2. The guarantee applies to the continuation of the tenant's occupation after the agreement expires whether it be by a new agreement or a periodic tenancy.

The guarantee doe not provide any provision to allow the guarantor to give notice of cancellation.

[Linda0704]

Thank you so much! I feel much less worried! You're a star!

[Linda0704]

Sorry, one more thing - what about the Dormant Company bit? Is it true that a Dormant Company cannot issue a Deed of Guarantor when they are not trading or showing any income from the Tenancy (or even Tenancies for other people) Thanks

[Joanna Connolly]

Simple answer is they shouldn't but if they did then they have an issue with the Dormant accounts they have filed.

[Linda0704]

Cannot Thank You enough Joanna - I will update you when it is over thank you