What To Do When A Tenants Guarantor Dies?

Hi Fred

You don't HAVE to do anything.

How long has this tenant been in situ?

Are they in a fixed or periodic tenancy?

You could request or even insist upon a new guarantor or you may just decide that the tenant is a good risk. That's a commercial decision for you to take. Why do you think you need a guarantor? Is it simply a case of belt and braces security or is there another more compelling reason?

If you are adamant that you must have a replacement guarantor and your tenant is unable or unwilling to introduce an acceptable person then you may serve notice. How quickly you will be able to seek a possession order via the Courts will depend on your answers to my other questions.

As an alternative to a guarantor you could purchase a rent guarantee insurance policy, create and create a new tenancy but you will only be able to purchase the policy after your tenants has passed professional referencing.

I will be happy to provide more details regarding your options when you answer my questions.

What To Do When A #Tenants Guarantor Dies - http://t.co/Nyklnlaa3e - question from a #landlord

— Mark Alexander (@iAmALandlord) May 20, 2014

Seems a little harsh to try to evict them when their guarantor (presumably a close relative) has just died. Rent guarantee insurance would give you this protection, and it's tax deductible.

The tenant has two children and is on benefits, which are now paid direct because she fell into areas. She doesn’t respect or look after the property and has caused damage, the guarantor was the only security.

The Guarantor although deceased will remain responsible for this contractual agreement and any debts should be paid from the Estate.

If the estate has already distributed the assets; after you obtain possession! then I have no idea.

As @Sam Cowen says, timing is an issue.. but .. you grant a tenancy on the strength of the applicant and the guarantor. Without one the tenancy is weak and fickle and put yourself at financial risk. You should protect your assets - as all financial institutions do. Banks for instance often freeze joint-accounts on death of a partner.

You can "ask" for a guarantor or use leverage of possession to ensure one is provided promptly. As i am not aware of requirement to "replace" a guarantor legally.

Reply to the comment left by "Fred Jones" at "20/05/2014 - 12:52":

Hi Fred

Thanks for that explaination which goes a long way towards vindicating your apparent lack of sympathy in your initial post.

As Adam Hosker has said, any debts must be settled by the estate of the guarantor before probate is granted and the estate is settled. If you have a claim get in in ASAP and note that the potential claim could increase due to the nature of the guarantee. The executors of the estate are likely to want to settle any claims quickly in order that they can get on with distributing any assets.

I still can't answer your questions about giving notice if a replacement guarantor isn't forthcoming. To do so I need to understand the current basis of the tenancy, i.e. is it still in the fixed term?

Your explanation so far has pretty much ruled out the rent guarantee option.
.

As we don’t regularly contact the guarantor, we where only told by tenant last week that he died.
We contacted the guarantor’s wife, only to be told he had passed away in September last year.
I'm sure any estate would have passed to her.

Sorry, the tenancy is now a periodic one.

If you haven't needed to contact the gurantor for the last 8 months+ then it appears that the tenant is not causing you any real problems.
I don't think you can have any claim on the estate as if she was in arrears you would have contacted the gurantor previously.

So I think in your situation I would let her stay untill she does cause a problem, if she does - then start the eviction process asap

Assuming you are in England or Wales you could serve a section 21 notice immediately if you have not already done so. The one you need is section 21 (4a).

Serving notice doesn't mean the tenant has to move out and you can let them know that. What is does mean though is that after two months have elapsed, if you tenant does fall into arrears you could immediately apply to the Courts for possession without having to serve notice again.

I do recommend you get a professional to serve the notice for you though as it's so easy to mess up with a section 21 (4a) as you need to get the dates right. To cover your own backside you should also serve new prescribed information now if you have not done so since the tenancy became periodic.

Would the wife of the deceased be prepared to stand as guarantor?
.

Ok, to clarify. The tenancy started in June 2012 and she fell into areas within a couple of months, the rent was the issued direct to me.
Damage was caused over a period of time, with a large amount due to her unsociable a relationship a guy. The police had to be called due to the level of noise and the door kicked in by her boyfriend, much of the damage was resolved by the guarantor. However, we agreed that some of what appeared to be more minor damage would be sorted over time, this is the damage we where now pushing to be resolved.
Initially the tenant asked us not to involve her granddad as he had been ill and that she would sort it, this was in March.
so you may now understand why it’s taken so long.