Can a guarantee be enforced if not a deed?
The Guarantor's Covenant in the agreement states: "That the rents reserved by this Agreement will be duly paid and that all the Tenant’s obligations will be performed and observed and on any default by the Tenant (not withstanding any waiver by the Landlord) the Guarantor will pay on demand any sums outstanding and perform any obligations which the Tenant has failed to perform." There is no further requirement in the clause.
On the strength of that clause, I have started proceedings against the guarantor but their defence is that because no new tenancy agreement was signed after the initial 6 months, their liability ended at that point. Although the agreement stipulates that the tenancy will continue on a periodic basis, it does not stipulate the guarantor's ongoing obligations.
They go on to say that they might even argue that the guarantor was not liable for the initial agreement as it was not given in a deed, only in the tenancy agreement itself. In fact, I had also had them sign a separate form, which gave their personal details and that was witnessed. However this was not “signed as a deed” and, in reading more about what a Deed is all about, I do not think it would stand scrutiny as a deed.
The agreement I used was quite old and the law has obviously changed since I started using it. However, is what they say correct. Even though it was obvious what the parties intentions were, I can effectively “whistle” for my money?
Needless-to-say, I have now downloaded the latest AST agreement and Guarantor deed from RLA website and will be using these from now on.
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