Readers account of an ongoing eviction by their agents

Hi
I don't have the solution to this situation, it is beyond my scope, but it was my understanding that a guarantor is only liable for the defined period of an AST and if it is renewed or goes periodic the guarantor should be asked to sign again; it can't be assumed they will remain liable for possibly many years to come. This follows a case around June 2011 ish I read about, which I thought made case law. Is this correct and does it influence this reader's problem in getting the guarantor to pay up?
Thanks.

Reply to the comment left by "Tilly Mint" at "12/07/2013 - 16:25":

I think it depends what type of document the Guarantor signs. If they are simply a co-signatory to the tenancy they may only be liable for the initial agreement. However if they sign a Deed of Guarantee drafted correctly I understand they are responsible as long as the tenant continues in residence.

Ray Davidson is right about the guarantor. As far as the eviction is concerned a section 8 could have been issued as soon as the rent went 2 months in arrears, ( 1 month and 1 day ) if rent is monthly in advance.

WHY would ANYONE who had the GOOD fortune to have a guarantor NOT have RGI on that guarantor!!!???
It cost's £99.00 for RGI on a tenant's guarantor for 1 year!!
Cover includes £50000 per claim including legal fees!!
PROBLEM solved!!!

Hi All

Many thanks to you all for your useful comments. Here are some points:

Tilly Mint - Many thanks for that, have learnt something new

Ray Davison/Mark Leach - Again thankyou. Thats helps futher clarify Tilly's point

Paul Barrett - Thanks very much. We actually already have RGI, however for some unexplained reason by the letting agent who we have cover with Ensleigh.. the rent is not covered on this occasion but the legal expenses are. Did not realise we can and would need to get additional RGI on the gurantor from what you are saying.
Am really baffled why rent is not covered and the agent is not answering to our questions on this.

Thank you

Jiten

Reply to the comment left by "Jiten Karia" at "13/07/2013 - 21:32":

This is why LA are pretty useless when it comes to RGI.
They tend to use expensive offerings.
You could have used this site's RGI offering or best insurance and it would have cost you £99.00!!!!

I have recently been paid £10333 as a consequence of a recent RGI claim.
It took 10 months to evict the tenant.
It cost me £99 and I didn't lose any other monies apart from having to redec the flat AGAIN!!
If the RGI costs more than this you are being ripped off..
You CANNOT trust most LA.
I believe the package that this site offers is a great deal.
Just a shame it wasn't around when you instructed your LA.
I don't have the link for the service; I'm sure Mark might add the link to this post.to assist you.
With regards to RGI on the guarantor; effectively what happens with best insurance is the tenant fails and then a RGI check is carried out on the guarantor who passes.
You effectively have a RGI policy on a failed tenant but who has the guarantor.
So you will be paid out and the guarantor will be pursued for the losses the insurance company paid out.
Personally I would NEVER be a guarantor; I think most who do have NO idea as to what could happen to them if a tenant defaults!!
I'm NOT surprised the LA is NOT answering questions on this.
I would terminate the LA agreement immediately; they are clearly idiots; the have missold a RGI policy and if you believed that you were covered for loss of rent then you could take legal action against them for breach of contract.
You will lose a lot of money before your tenant is evicted.
Don't use this LA ever again and make sure you only source tenants or their guarantors that will pass a RGI check..........................UNLESS you wish to take a financial hit again in the future if it all goes wrong.
You are one of many LL who are finding out how USELESS the eviction system is; the bottom line being you MUST pay your mortgage by other means or the property will be repossessed and destroy your financial future, you could even be made homeless......................................all for the sake of £99!!!!!!!
Of course it all depends on how robust your finances are; but I think you would be pretty annoyed if you had to use savings or credit lines to pay the mortgage because your wrongun tenant wasn't paying the rent and that remains until evicted!!
I would not wish to risk my financial future on ONE tenant as I do NOT have the spare resources to pay a mortgage whilst a tenant is being evicted.
£99 covers most things for me!!!
YOU have to decide on how much you wish to risk on a tenant if you don't take out RGI on them.
The reason your LA did not offer RGI was because they did NOT carry out an RGI check.
They would have failed and then the LA would NOT be able to offer the tenant and then receive the fees.
LA business model is fundamentally flawed; in that they must pass any old rubbish onto the LL as that is how they make their money.
Very few tenants can pass RGI checks.
There are a few decent LA that are honest and WILL carry out full DD including cheap RGI checks and offer CHEAP (GOOD VALUE) RGI polices
They will advise the LL as to how the tenant has performed and then leave it to the LL to make a decision.
Not many LL would take on a tenant who fails RGI checks.
LA would lose millions if they only offered tenants or their guarantors to LL if they pass RGI checks.
Not many LL will do the right thing as it conspires against them making money
There are some LA who post on the fora who I believe are these honest LA.
There are a couple on the LRS site.
It is a shame you have been stitched up by your LA
NEVER give this LA business again
Most LA are inherently corrupt because of the issue with sourcing tenants.

Thanks Paul,
This is the link to our Lettings page for reference including RGI.

http://www.property118.com/find-me-a-tenant/

Or see the Lettings tab at the top of all pages.

Jiten,

Random points;

1. Are you getting the housing benefit paid direct? If not, why not?

2. Without seeing your policy, it would seem you have legal protection to recover rent. That is different (and cheaper) than policies that pay you the rent. If this is not the policy you wanted, then you bear some responsibility for not checking (sorry). It's better than nothing (maybe).

3. If your guarantor agreement is watertight and they have the assets, then go for them with a money claim. Now.

4. If you are using section 21 to evict, the court will not decide about the arrears payable either by the tenant or the guarantor. It is irrelevant to a section 21 claim.

5. If you are evicting under section 21, then start a seperate money claim. If the tenant claims no income and paying only a fiver a week, get her in court to disclose all her assets. In particular the savings account left by her late husband.

6. Enforce the judgements. Look at all methods of enforcement. If you don't enforce it the chances are it won't go on the CCJ register and she will do this to someone else. You stand a better chance of getting paid as it will severely affect her credit rating for 6 years. Particularly if 'unsatisfied'.

7. Investigate your rent guarante policy thoroughly. Hopefully it should pay for a solicitor to advise and pursue the above. It should pay the court and enforcement fees. Do not be fobbed off with "in our view it is uneconomical to pursue" -although there might be a clause letting them do that.
If you do get fobbed off (and I don't think you will, as your insurance company is reputable), let us know, it may stop others getting stitched up.

8. Your letting agents seem to be out of their depth.

Regards, HB Welcome

HBs advice is sound and succinct.

i would just add one more point about the Agents - did you have an agreement for them to collect rent /manage the property or a tenant find only? If no agreement for rent collection or management, arguably they have no case to answer, but if you have appointed them to do this, they seem to have failed you miserably. Check your contract for termination provisions before you fire them, and if they are part of a recognised professional body (RICS, ARLA etc), they should have indemnity insurance and you may wish to pursue a claim in due course to recover (some of) your losses, which from what you say seem have grown significantly as a result of inaction earlier in the tenancy.

Meantime, you may wish to advise them that they should put their insurers on notice of a potential claim, which in the short term might make them pick up their game and support you more. If they have several branches there could be someone in the network with more experience who can help you.

Reply to the comment left by "Mark Leach" at "12/07/2013 - 21:04":

Can you provide reference to relevant case law, please?