Common problem, common question.
Unfortunately, the question is usually asked by weepy-eyed do-gooders that were only too happy to accept liability if any rental debt is incurred by a loved one, no questions asked. That’s usually the problem, that no questions were asked, and most people don’t actually realise what they’re signing up for when agreeing to being a guarantor. When reality does hit home, they often want out.
The reality being that the Guarantor only vouched for sweet and responsible Elizabeth because they NEVER imagined she would ever rack up any debt with her landlord. She has. Now the Guarantor needs to step up.
Horrible lesson learned. But now, how do you stop being a guarantor for a tenant?
I’m pretty sure a lot of guarantors don’t fully understand what their legal responsibilities are until they’re actually forced to step up and swallow the consequences of their duties.
Being a Guarantor is no joke, and it’s probably the only selfless good deed in this snake-oil industry. However, sadly, I’ve yet to witness anyone gain any joy from being one, so it’s important to fully understand the risks of being a Guarantor… before actually agreeing to be one. It’s not exactly rocket science.
I’m no expert in this field, but I’ve read many cases from both external sources and comments left on my blog, so I’ve managed to pick up a few nuggets of information. From what I’ve aware, there are a handful of ways in which a guarantor can actually stop being a guarantor, which are as follows:
- The landlord allows the guarantor to surrender their legal obligations as a guarantor. In this case, the guarantor should get this in writing from the landlord.
- If the Deed of guarantee contains a termination provision (allowing the guarantor to withdraw on say two months’ notice)- the provision can allow the termination during the fixed term.
- If any term of the tenancy changes (e.g. rent increase) the guarantee will automatically come to an end.
- Death of either party.
- If a new tenancy is entered into, the guarantee will automatically come to an end, unless a term in the guarantee states an automatic continuation.
In most cases, the conditions above depend on the wording of the Deed of guarantee, so it’s important to read the terms with due diligence, and seek legal advice if uncertain.
If anyone believes any of the above to be untrue, or can expand on any of the escape routes, please let me know. Also, has anyone successfully or unsuccessfully got out of being a guarantor? If so, which route did you go down?
Disclaimer: I'm just a landlord blogger; I'm 100% not qualified to give legal or financial advice. I'm a doofus. Any information I share is my unqualified opinion, and should never be construed as professional legal or financial advice. You should definitely get advice from a qualified professional for any legal or financial matters. For more information, please read my full disclaimer.
If a new contract is issued do the guarantors.
Have to resign a new contract