For shared houses the standard practice has long been to have joint and severally liable tenancy agreements whereby the landlord treats the tenants collectively as a group and can claim losses against any liable person he chooses.
In practice, it is often the case that each person in the group will informally agree with others in the group that they will pay a certain share of the rent or a share of the bills, etc.
Unfortunately, this can unfairly end up with one T or G paying out over a default caused by another T.
Also, guarantors are rarely happy to provide guarantees that make them liable for the conduct of people they do not know. (e.g. a mother guaranteeing their child in a student let with other students they do not know).
In order solve this problem and provide a recourse for unfairness, I have come up with an idea for a contract where the tenants and guarantors could potentially guarantee to reimburse one another according to whoever is responsible for the loss.
I am not legally trained so I suggest that no one should use the information below without it being properly executed by a qualified solicitor - as I will, if I think it is worth using. This is a first draft below but could be adapted for a greater number of T's. I have included a full example only so that people can see exactly what I am trying to do.
I am aware that it is possible to make a limited guarantor agreement with stated maximum rent liability but this does not provide as good protection for L especially when it comes to damage to the property. Neither does is give any recourse to an unfairly claimed against T.
Please feel free to point out any defects or possible improvements or to comment on whether it is a worthwhile idea as to put this to a solicitor for professional drafting will be an expensive waste of money if it is not workable. There may also be negative ramifications in getting involved with the tenants personal business. Thanks
Joint Tenant and Guarantor Indemnity Agreement
“A” represents 1st tenant named as:(name of 1st tenant)
“B” represents 2nd tenant named as:(name of 2nd tenant)
“C” represents the guarantor of 1st tenant (name and address of 1st guarantor)
“D” represents the guarantor of 2nd tenant (name and address of 2nd guarantor)
This agreement is a contract between ABC and D and relates to A&B's tenancy of (property address) from (start date) to (end date) and the guarantees provided to the landlord by C&D.
This agreement has been made separate to the tenancy agreement or any guarantor agreements relation to (property address) and is a contract between the above named people and is not a contract made with the landlord. This agreement is made without prejudice to the landlord's legal rights in any way.
Each of the tenants & guarantors is jointly and severally liable to the landlord under the tenancy/guarantor agreements.
This agreement is made in consideration for A and B entering into the tenancy agreement and for C and D providing guarantees.
The tenancy of (property address) requires that rent is paid from (1st payment date) to (final payment date) in (X) monthly installments each totaling £total. It is agreed here between A&B that A & B will each pay a “share” of £total/2 by standing order to the landlord on the 1st day of each month from (1st payment date) up to and including (final payment date).
It is agreed here that:
A guarantees to B,C & D that they will reimburse on demand B,C or D any money recovered from B,C or D by the landlord:
* owing to A's failure to pay their share of the rent (as detailed above).
* owing to damage caused to the property or its contents where A is to blame.
* owing to any other costs recovered from B,C or D by the landlord relating to the tenancy of (property address) where A is to blame.
B guarantees to A,C & D that they will reimburse on demand A,C or D any money recovered from A,C or D by the landlord:
* owing to B's failure to pay their share of the rent (as detailed above).
* owing to damage caused to the property or its contents where A is to blame.
* owing to any other costs recovered from A,C or D by the landlord relating to the tenancy of (property address) where B is to blame.
C guarantees to B & D that they will reimburse on demand B or D any money recovered from B or D by the landlord:
* owing to A's failure to pay their share of the rent (as detailed above).
* owing to damage caused to the property or its contents where A is to blame.
* owing to any other costs recovered from B or D by the landlord relating to the tenancy of (property address) where A is to blame.
D guarantees to A & C that they will reimburse on demand A or C any money recovered from A or C by the landlord:
* owing to B's failure to pay their share of the rent (as detailed above).
* owing to damage caused to the property or its contents where B is to blame.
* owing to any other costs recovered from A or C by the landlord relating to the tenancy of (property address) where B is to blame.
Any person party to this agreement must inform the other parties of any change of address within 14 days.
Signed and dated:
A
B
C
D
In practice, it is often the case that each person in the group will informally agree with others in the group that they will pay a certain share of the rent or a share of the bills, etc.
Unfortunately, this can unfairly end up with one T or G paying out over a default caused by another T.
Also, guarantors are rarely happy to provide guarantees that make them liable for the conduct of people they do not know. (e.g. a mother guaranteeing their child in a student let with other students they do not know).
In order solve this problem and provide a recourse for unfairness, I have come up with an idea for a contract where the tenants and guarantors could potentially guarantee to reimburse one another according to whoever is responsible for the loss.
I am not legally trained so I suggest that no one should use the information below without it being properly executed by a qualified solicitor - as I will, if I think it is worth using. This is a first draft below but could be adapted for a greater number of T's. I have included a full example only so that people can see exactly what I am trying to do.
I am aware that it is possible to make a limited guarantor agreement with stated maximum rent liability but this does not provide as good protection for L especially when it comes to damage to the property. Neither does is give any recourse to an unfairly claimed against T.
Please feel free to point out any defects or possible improvements or to comment on whether it is a worthwhile idea as to put this to a solicitor for professional drafting will be an expensive waste of money if it is not workable. There may also be negative ramifications in getting involved with the tenants personal business. Thanks
Joint Tenant and Guarantor Indemnity Agreement
“A” represents 1st tenant named as:(name of 1st tenant)
“B” represents 2nd tenant named as:(name of 2nd tenant)
“C” represents the guarantor of 1st tenant (name and address of 1st guarantor)
“D” represents the guarantor of 2nd tenant (name and address of 2nd guarantor)
This agreement is a contract between ABC and D and relates to A&B's tenancy of (property address) from (start date) to (end date) and the guarantees provided to the landlord by C&D.
This agreement has been made separate to the tenancy agreement or any guarantor agreements relation to (property address) and is a contract between the above named people and is not a contract made with the landlord. This agreement is made without prejudice to the landlord's legal rights in any way.
Each of the tenants & guarantors is jointly and severally liable to the landlord under the tenancy/guarantor agreements.
This agreement is made in consideration for A and B entering into the tenancy agreement and for C and D providing guarantees.
The tenancy of (property address) requires that rent is paid from (1st payment date) to (final payment date) in (X) monthly installments each totaling £total. It is agreed here between A&B that A & B will each pay a “share” of £total/2 by standing order to the landlord on the 1st day of each month from (1st payment date) up to and including (final payment date).
It is agreed here that:
A guarantees to B,C & D that they will reimburse on demand B,C or D any money recovered from B,C or D by the landlord:
* owing to A's failure to pay their share of the rent (as detailed above).
* owing to damage caused to the property or its contents where A is to blame.
* owing to any other costs recovered from B,C or D by the landlord relating to the tenancy of (property address) where A is to blame.
B guarantees to A,C & D that they will reimburse on demand A,C or D any money recovered from A,C or D by the landlord:
* owing to B's failure to pay their share of the rent (as detailed above).
* owing to damage caused to the property or its contents where A is to blame.
* owing to any other costs recovered from A,C or D by the landlord relating to the tenancy of (property address) where B is to blame.
C guarantees to B & D that they will reimburse on demand B or D any money recovered from B or D by the landlord:
* owing to A's failure to pay their share of the rent (as detailed above).
* owing to damage caused to the property or its contents where A is to blame.
* owing to any other costs recovered from B or D by the landlord relating to the tenancy of (property address) where A is to blame.
D guarantees to A & C that they will reimburse on demand A or C any money recovered from A or C by the landlord:
* owing to B's failure to pay their share of the rent (as detailed above).
* owing to damage caused to the property or its contents where B is to blame.
* owing to any other costs recovered from A or C by the landlord relating to the tenancy of (property address) where B is to blame.
Any person party to this agreement must inform the other parties of any change of address within 14 days.
Signed and dated:
A
B
C
D