Can a Guarantor Be Released from Liability?

Question from Hughenden, Can a Guarantor Be Released from Liability?

Answer from AI:

When you agree to be a guarantor for a rental property, you enter into a legal agreement to cover certain financial responsibilities if the tenant fails to meet them. This can include unpaid rent or damages to the property. However, circumstances can change, and you may find yourself unable to fulfill this role due to financial hardship, such as redundancy. Here’s what you need to know about your situation:

Understanding Guarantor Liability

As a guarantor, your liability is typically outlined in the guarantor agreement you signed at the start of the tenancy. This agreement is legally binding, and your responsibilities as a guarantor generally continue until the end of the tenancy agreement, or until all debts covered by the guarantee have been paid.

1. Am I able to stop being liable for this debt?

• Review the Guarantor Agreement: Check the terms of your guarantor agreement for any clauses that allow for early termination of your responsibilities. Some agreements may include specific conditions under which a guarantor can be released.
• Negotiate with the Landlord: If the agreement does not explicitly allow for your release, you may still be able to negotiate with the landlord. They may be willing to release you from the agreement, especially if you can provide evidence of your change in circumstances.
• Replacement Guarantor: Offering to find a replacement guarantor may convince the landlord to release you from your obligations.
• Legal Advice: It’s advisable to seek legal advice to understand your options fully. A legal professional can review the agreement and advise on the best course of action.

2. How should I write to the landlord to ensure he does not come after me for the money?

• Formal Letter: Write a formal letter to the landlord explaining your situation. Be clear and concise, and include any relevant details about your change in circumstances.
• Documentation: Provide evidence of your redundancy and any other factors that affect your ability to act as a guarantor.
• Propose Solutions: Suggest reasonable solutions, such as finding a replacement guarantor or coming to a payment arrangement that reflects your current financial situation.
• Keep Records: Keep copies of all correspondence with the landlord and any evidence you provide. This can be important if there is a dispute later on.
• Seek Assistance: If you’re unsure how to draft the letter, consider seeking help from a legal professional or a service like Shelter, which provides advice on housing issues.

Final Considerations

Remember that the landlord can pursue legal action to recover the debt from you as the guarantor if the tenant fails to pay. If you are unable to reach an agreement with the landlord, they may take you to court, and you could be ordered to pay the outstanding amount.

It’s crucial to address the situation proactively and seek advice as soon as possible. While the information provided here is general, a legal professional can offer personalized advice tailored to your specific circumstances.