Tenant absconded owing rent. Are her two guarantors liable?

[judeinsussex]

I own a little property which I bought to help boost my retirement income and let it out to a single young woman. After a year, tenant should have gone when her Agreement was up but she just stayed on and said that she wished to rescind. While I understand that it was legal for her to do this, it didn't mean that no further rent would need paying. From the tine that she rescinded she paid no rent at all, and neither did her guarantors. I tried to do a Money Claim through the courts but as the tenant had absconded I had no forwarding address for her. However, on the money claim form, I still listed her as Defendant No. One, just giving her e-mail and phone number, but also saying that she refused to give forwarding address. On the form I also listed her two guarantors and gave the address for these two. The court, however, has returned the claim form to me complete with my cheque. They say that they cannot process the claim as I did not provide an address for Defendant No. 1 (former tenant). I rang court for help but they said that they were not allowed to advise. The person who answered the phone said that I should put on the form the last known address for the tenant, which would be the address of my property! I now think that I should do a fresh claim leaving tenant's name off completely but just claiming against the two guarantors. Would this be feasible - without the name of the tenant? By the way, the 'managing' estate agents did manage to get the return of the deposit for me which I kept towards the debt, but the agents have done very little else for me as they said their fee doesn't cover this sort of thing. At present, I am owed £4,500. Apart from owing rent, the tenant left the property in a very bad condition which meant that I had to engage a rubbish disposal firm to clear it, followed by a deep professional clean. I waited months for the court to get back to me following my claim, only to be told that the claim couldn't be processed because I didn't provide an address for one of the defendants (the tenant who absconded!). All this has been so very stressful. I can well understand why landlords often do not follow up on this sort of claim but when I met the guarantors (at the start of the tenancy)they seemed such nice and well heeled people. You live and learn I suppose. I don't want them to win over this but I feel that I'm crumpling.

I then researched the use of a lawyer and found one for which I pay £80.00 a year for unlimited advice, over the phone, with a lawyer.

I strongly suspect this is not a real lawyer

I can recommend a no win no fee bailiff which will be cheaper than court worth a try before incurring more fees

Not worth the paper it’s written on, we did a money claim and had legal cover and it was incredibly hard (money claim is shit) to get anywhere, the ‘legal’ team just wrote email after email and did fuck all else to resolve the problem, they just wanted the money for as little work as possible, yes Irwin Mitchell I’m talking about you!

https://www.linkedin.com/in/garyainley/. This guy is amazing 😍

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I have learnt my lesson and would never take on an unemployed person again. Never.

I've been trying to move house for over a year but I'm unemployed (I'm a carer for a family member) and suspect this is why I struggle to get viewings and get rejected for every place I view. I have a years rent upfront, a guarantor, rent paid for by Universal Credit etc but can't find anywhere because of attitudes like this. I'm a great tenant, have good references, look after my home, never missed a rent payment etc.

Your tenant did what she did because she's an arsehole, not because she's unemployed. Please don't write off all unemployed people!

When you had the tenant and guarantors reference did you pay for the referencing guarantee? They’ll usually pay out in circumstances like this and then they chase the debt.

Unfortunately, solicitors cost a lot and if I lose I will have to pay the expenses of the defendants too. I think that I will go ahead naming just the two guarantors as defendants as I'm able to give their full address. If I mention the tenant again, on the claim form, as one of the defendants, without providing her address, then the court will just throw it out again. Its at this point that people start to give up. Ive researched a company on-line who charge £60 to trace the addresses of people but I have nothing to go on and they do require a certain amount of information from you before they start their search. All I know is that former tenant is on benefits through Runnymede Borough Council but I shouldn't think that they will give anything away. I might give them a ring though to talk things through. I have tried Citizens Advice before and they just will not help landlords. It would help if the Court would give some advice over what best to do but they say they are not allowed to. I have been trying to ring the solicitor for whose advice I pay £80 a year, all day yesterday and again this morning but Answerphone still on. I will try again on Monday.

I'd name the tenant as defendant at her last known address - the flat she rented from you. The two guarantors can then be named as co-defendants. If the guarantee is any good then when you get judgment I think it would be "joint and several" against any of the three of them. You'd enforce it against the person with the asset that cannot be hidden - the guarantors. My knowledge of litigation is rather rusty though.

Guarantees are often unenforceable, especially if the judge thinks the guarantors didn't really know what they were getting into. Does the guarantee have a stern warning on the front of it recommending that the guarantors take legal advice before signing it? If not then the judge may take pity on them. Can you post the wording of the guarantee here?

PS

I have been trying to ring the solicitor for whose advice I pay £80 a year, all day yesterday and again this morning but Answerphone still on. I will try again on Monday.

The service is that price for a very good reason. £80 would buy you about half an hour with an unqualified trainee. Forget it.

@judeinsussex I'm a member of the National Residential Landlords Association and it's been really helpful. There is lots of advice on their website and a helpline. I'm afraid good lawyers come at a cost and the ones that charge next to nothing usually do nothing either. So the NRLA are a good option. It's not legal advice but it is useful.

Best of luck x

My experiences aren’t going to make you feel much better. We had a tenant move in and not pay a single penny in rent. It took us 8 months and a whole heap of legal fees. Honestly, you were lucky to be spared court and bailiff fees. We were told by our solicitor the best case scenario was getting occupancy of the property and we wouldn’t see any of the rent arrears (£8000).

I’m unclear what’s happening now, is it empty? Can you rent it unfurnished? It is unfortunately the reality of renting, you can’t assume anything and you have to have a buffer to protect you financially. We rented our family home because we were working overseas. It still made more as an asset than any other revenue stream. It’s just riskier and I don’t think landlords always get that.

This

She has, that's not the question!

Thank you for all your advice and suggestions. Just to update you - the place is now empty as the furniture had to be removed because much of it had been badly damaged or stained which meant that I had to pay to have it removed, along with all the personal rubbish left behind. I've decided to rent it out unfurnished next time. I have seen a different estate agent who understands that it will be redecorated and he has said that he can find me a tenant tomorrow, once it has been put back to a good decorative condition. On the strength of this, I have arranged a loan to get this done as I can't afford to have the place empty for very long. The agent also said that many tenants now prefer to take in their own things, to put their own stamp on it. He has suggested a fair rental and a fair commission - a bit more than I was paying other agent but I don't mind paying more for a better service. This time I will definitely take out Landlord's insurance and have discussed this with new Agent. I spent most of yesterday very stressfully working on the court papers, once again, and have decided to for the guarantors, leaving tenant out of it. I think that guarantors paid all the rent for the rental term anyway, as tenant was out of work. I have looked through their guarantor agreement and there doesn't appear to be any warning to guarantors of what they are about to sign. I hope that this won't be a problem.

Anyway, below I give a brief outline of what the guarantors' agreement says:

START OF AGREEMENT:-

Rent Guarantee dated xxxxxxxxxx Supplemental to agreement dated xxxxxxxx
Parties (Names) xxxxx (the guarantor) of (Address) xxxxxxxxxx
and myself xxxxxxxx as Landlord of xxxxxxxxxxxxxxxxx
Property xxxxxxxxxxxxxxxxxxxxx
Commencement Date : 18.11.21.
EndDate: 17.11.22
Agreement: the agreement of the same date as this guarantee by which Landlord agreed to let the property to : The tenant: (Name) x xxxxxxxxxxxxx

Whereas the Landlord has entered into the Agreement at the request of the Guarantor and because the Guarantor has agreed to give this guarantee.

The Parties agree as follows:

1. This guarantee supplements the Agreement
2. The Guarantor guarantees to the Landlord that while the tenant remains bound by the terms of the Agreement, the Tenant will pay the rent payable in respect of the property under the Agreement in accordance with those terms amounting to £xxxxpcm and for any dilapidation costs (if in excess of the tenant's security deposit) which may be deemed to be the tenant's responsibility as stated in the Agreement.

Signed by the above named (the guarantor)
Signed by the above named (the Landlord)

END OF AGREEMENT

Any constructive comments helpful! Thanks.

That is an incredibly shoddy guarantor agreement and I’d swap estate agents.

Sorry @judeinsussex, I don't think that guarantee agreement is great to be honest.

The guarantor has not actually undertaken any explicit obligation. I'm looking at the agreement which we last used. It says, for example:
The Guarantor shall pay and make good to the Landlord on demand all reasonable losses and expenses of the Landlord incurred as a result of default by the Tenant in the performance or observance of the Tenant's covenants under the Tenancy Agreement.

Your agreement just says that the guarantor guarantees that the tenant will pay, not that the guarantor will pay if need be. The obligation on the guarantor to pay is I think implicit in giving the guarantee. But it's quite possible that a judge would say that relying on that implication is not fair on the guarantor, and that they may not have understood what they were getting into without legal advice.

Our guarantee agreement says on the front in big bold letters:
The effect of this document is that the guarantor becomes financially accountable for any breach of the tenancy agreement by the tenants. If the guarantor does not understand its terms it is recommended that they seek legal advice
Without that sort of warning, again a judge may use his discretion to let the guarantor off the hook.

Final problem - I think the agreement should have been "executed as a deed". In other words the signature clause at the end should use a particular form of wording, and be signed in the presence of a witness. This (as I understand it) is because the guarantor is "getting no consideration" ie giving something (a massive potential liability) and getting nothing back in return.

I could be wrong on all of this, but my guess is that you will have trouble enforcing that guarantee at all. It's worth emphasising that because of their particularly draconian effects for the guarantor, guarantee agreements more than any other legal document need to be drafted and executed in an absolutely water-tight fashion. I would not trust even a fairly competent agent to manage the process, and frankly most letting agents are not particularly competent.

Thank you for your helpful messages - especially the last one - Laura.
Its all now become very worrying indeed, especially as, if I lose the case, then I believe that I would probably have to pay guarantors' costs also. I've only met guarantor the once, but he seems a very smooth operator to me and probably would hire some slick lawyer or something. Would it be better if (a) if I just dropped the case and put it down to experience, or (b) try to find an address for former tenant and put the papers in her name. This would be very difficult as all I have to go on is a car registration number taken when a member of her family took her to the estate agents to collect something after she had moved out. Would I be able to get an address through this registration number if I contact a firm who carry out these sort of searches, and would it be very expensive? There are a few on-line that I've seen, but don't want to pay any high amount as that would be counter-productive. I know that even if found tenant would not pay her debt but it might make the guarantors more sympathetic to her - not wanting her to appear in court etc. Maybe I should just move on and put this down to a very expensive lesson. I have never been involved in this sort of thing before and even completing all the forms is stressful in itself.

Is there any advice about trying to get an address through a car registration number? If possible, then no doubt it would be very expensive and the company would need to be reputable?

Sorry you're struggling with all this, very stressful and horrible I'm sure.

I've never tried tracking anyone down like that. I don't think that there is a recognised way of getting an address from a car reg. I think that there are people who will do it on a don't-ask-us-how basis, but probably expensive and bit dodgy. And anyway even if you find her and win, actually getting the money out of the tenant will be an even harder battle. I'd drop that line of attack entirely.

Can you claim against the guarantor through the "small-claims track"? If you can then it's done on a no-costs basis. In other words if they choose to get expensive lawyers that's up to them. Each side pays its own legal fees no matter who wins. Check that - I don't know for sure. If you can push ahead on that basis it's worth a go I reckon. The most you stand to lose is the court fee, and even if the guarantee is unenforceable they might not realise that, and they may offer to settle, or nag the tenant to pay something.

If you would be on the hook for their legal fees however I'd probably quit now, and put it down to experience, because chances are they'll win.

You were a good way to doing the right thing with the guarantee. It provides you with a solvent person with a fixed address for exactly this situation. But unfortunately it has to be properly drafted.

I was exactly the same, had to claim benefits because I was caring for my son, but in fourteen years of private renting I never missed a payment. There are people on benefits who have deep integrity. There are people who work but don’t. You were unlucky because you got one of the bad ones.

Thank you, Laura, for another helpful reply. I knew, probably, that I wouldn't get anywhere with trying to find former tenant through a car registration, but it was just a thought.

As per your suggestion, however, I have just tried to call the British Landlords' Association, to whom I pay annually for legal advice, to ask how I might go about doing a claim on a 'no-costs' basis, but no reply at the moment. If I could do it this way then it would save me a lot of worry and I certainly wouldn't mind paying just the court costs. Money is tight at the moment on account of having the property empty, on top of paying all the contractors fees to put the place back into good condition.
Anyway, whilst getting the guarantor's agreement ready to send off to BLA once again, I noticed that I had missed out a clause when I copied this agreement into these posts (my post dated 16.5.23. refers) and with this extra clause added, it may make things a little better, I hope. I probably missed it off as I was feeling stressed at the time and was also typing from my mobile instead of using my main computer where the keyboard is much quicker and easier. Anyway the part of the agreement I accidentally missed off says:-
3) The Guarantor will make good to the Landlord any loss or expense that the Landlord may suffer or incur as a result of any failure by the Tenant to pay the Rent in accordance with those terms amounting to xxxxx pcm and for any dilapidation costs (if in excess of the Tenant's security deposit) which may be deemed to be the Tenant's responsibility as stated in the Agreement.

The Agreement wasn't witnessed, but signed by both guarantors and myself.

Actually, I wouldn't mind dropping all this now but, as you say, I'm almost there
and I hate to give in as its not as if the guarantors seemed down at heel at all - they looked quite wealthy business people and I think it disgraceful how they are behaving. They have the means to pay but I think that they just want to see if they can pull a fast one if they can which is very dishonourable and unfair. Its not as if I have a portfolio of 'buy to let properties'. I just have the one little place, still mortgaged. I've just come across a receipt from Agents to tenant which I found at the property when I was clearing out earlier, acknowledging a sum of money (a whole year's rent paid upfront). I had it monthly so agents would have held on to this I suppose. Tenant would not have been able to pay this amount herself - so money would have come from her guarantors over to her, which she then she handed over to agent - so receipt is in her name not guarantors name.

The good news is that new agents have found me a a very nice couple who want to take the place over asap. Their references are good and they will be moving in in one week's time, as soon as decorator finished. They are also happy to take their own furniture. This time I will definitely be taking out Landlord's insurance.

What do you think of Clause (3) which I missed out. I do hope that it will make the agreement a bit more water tight.

I would ask the agent to do a proper guarantors agreement fully setting out their responsibility, what happens if the tenancy goes onto periodic etc… I really wouldn’t do it yourself if you don’t know what you are doing!

Look at something like this and how in depth it is - https://www.davidandrew.co.uk/downloadable-forms/Sample-Deed-of-Guarantee.pdf

Also have you had them properly referenced by a referencing company? If not, get it done with a rent guarantee service. It’s not expensive but worth it, something like this - https://www.letalliance.co.uk/letting-agents/rent-guarantee-insurance/

Give her adddress as care of the guarantors, they are liable.