claimform for being a guarantor on a rent agreement - help

[msorganised]

Could I please have opinions as to whether this guarantor agreement linked below would be legally upheld - the landlord referred on this to is actually the letting agent, and the witness is also an employee of the same agent.

 

A county court claim has been issued for an amount of rent oustanding less than £1000 but has nearly doubled due to their charges and fees despite the claim form stating no solicitor has been instructed... No breakdown of fees was given with the tenancy agreement (referred to as an appendix but not provided) and has been requested twice but not provided so we are minded to dispute the claim based on the unreasonable fees (the rent is still being paid by the tenant)

 

 

http://s6.postimg.org/hcha1cpm9/img023.jpg

http://s6.postimg.org/god0w5ga9/img024.jpg

http://s6.postimg.org/th14w2rw1/img025.jpg

 

Any views welcome please

[dx100uk]

can you pop all the pics into amultipage word doc please

 

 

then pdf iy

 

 

and attach it via the go advanced button bottom right

then manage attachments

 

 

dx

[steampowered]

Its a bit strange that the letting agent is mentioned as the landlord on that agreement. Is that different to the actual landlord mentioned in the underlying tenancy agreement? If so, I would argue that there is no valid guarantee at all.

 

 

The tenancy agreement only talks about rent and reasonable costs and expenses incurred as a result of default by the tenant under the tenancy agreement. In my mind this does not cover rent collection expenses and certainly does not cover arbitrary fees and charges. Also, interest should only be payable from 10 days after receipt of a written demand for outstanding rent from the landlord.

 

 

I would file a Defence contesting liability for the whole whack on the basis that there is no liability for the charges and fees claimed by the agency under the guarantee. You don't want to admit liability straight away for even the original rent as that would result in an automatic CCJ.

[msorganised]

can you pop all the pics into amultipage word doc please

 

 

then pdf iy

 

 

and attach it via the go advanced button bottom right

then manage attachments

 

 

dx

 

dx100uk - the attached is it pretty much word for word - does that help? The copy we have does not include this -

 

IMPORTANT NOTICE

This Guarantor Agreement creates a binding legal contract

. If you do not fully understand the nature of the agreement, then it

is recommended that you take independent legal advice before signing.

 

 

 

 

 

 

 

Its a bit strange that the letting agent is mentioned as the landlord on that agreement. Is that different to the actual landlord mentioned in the underlying tenancy agreement? If so, I would argue that there is no valid guarantee at all.

 

 

The tenancy agreement only talks about rent and reasonable costs and expenses incurred as a result of default by the tenant under the tenancy agreement. In my mind this does not cover rent collection expenses and certainly does not cover arbitrary fees and charges. Also, interest should only be payable from 10 days after receipt of a written demand for outstanding rent from the landlord.

 

 

I would file a Defence contesting liability for the whole whack on the basis that there is no liability for the charges and fees claimed by the agency under the guarantee. You don't want to admit liability straight away for even the original rent as that would result in an automatic CCJ.

 

Steampowered - thankyou, this was our thinking - currently for court action for approx £700 of rent, there has been over £1100 of court costs and legal fees charged - this to me is in blatant disregard of the OFT guidance on about 15 different clauses - namely 3.44 Schedule 2, paragraph 1, states that terms may be

unfair if they have the object or effect of:

(e) requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation.

We have requested on three seperate occasions an appendix outlining charges and fees referred to in the claim form which was never provided and cannot see how the charges are proportionate to the rent outstanding... I am now thinking this does not exist but there is no way they can justify this amount

[msorganised]

Bumping this in the hope that some more advice may be offered....

 

Court defence needs to be filed next week. Have had some legal advice stating the clause 7 relating to notice of guarantor is likely to be deemed as against the guidance of the OFT's unfair terms and so notice should be given and any further than the notice period argue is not the guarantor's liability. Also the letting agent has admitted the breakdown of fees in the tenancy agreement does not exist so no formal setting out of fees was ever provided despite this being referred to in the tenancy agreement. Hoping this is grounds to claim the fees are unfair also and just settle the outstanding rent to fulfil the remaining period of liability if we follow the notice route? That or look to have the whole agreement declared invalid but would need further legal advice on that

 

With the court paperwork, do we just state the grounds we dispute some/all of the amount on (like above), and send this off to the court to decide? Will there need to be a hearing to attend? Can the agent decide not to take it further or does the court make that decision for them?

 

Having queried the statement they admitted they had added in excess of £500 of fees "in error" - this could easily have not been picked up on and just paid and they'd have just pocketed the money. They are so disorganised and flippant it infuriates me no end

[SabreSheep]

£1000+ court fees.

 

This should be dealt in the small claims track, those "court fees" are not acceptable. they are trying it on.

 

As discussed above, you defend ALL

Admitting part of the claim will result in a CCJ against you

[SabreSheep]

Post up the POC that has been issued against you minus all personal details.

 

Then that can be used as a basis to formulate a defense.

 

Also go here http://www.consumeractiongroup.co.uk/forum/showthread.php?419198-You-have-received-a-Claim-What-you-need-to-do.-**UPDATED-December-2014**

 

Paste the answers here so timeframes can be checked.

 

ALSO

 

Have you acknowledged the claim?

[steampowered]

Court defence needs to be filed next week. Have had some legal advice stating the clause 7 relating to notice of guarantor is likely to be deemed as against the guidance of the OFT's unfair terms and so notice should be given and any further than the notice period argue is not the guarantor's liability

I don't understand why you think clause 7 is an unfair term. It is common for any guarantee to last for as long as the tenant remains in the property. In any event, clause 7 is not relevant to the claim against you.

Hoping this is grounds to claim the fees are unfair also and just settle the outstanding rent to fulfil the remaining period of liability if we follow the notice route?

Yes, I would be offering to settle the outstanding rent but nothing else. I don't understand what you mean by 'notice' route.

That or look to have the whole agreement declared invalid but would need further legal advice on that

You can't have the whole agreement declared invalid, provided that you signed it. Unfair terms would only prevent that term from being enforceable not the entire thing.

With the court paperwork, do we just state the grounds we dispute some/all of the amount on (like above), and send this off to the court to decide? Will there need to be a hearing to attend? Can the agent decide not to take it further or does the court make that decision for them?

Dispute all and briefly explain the reasons. I would steer clear of talking about unfair terms to be honest - better to just focus on not having any liability of the amount claimed for which no explanation has ever been provided. If the landlord on the tenancy agreement is different to the letting agent I would also deny all liability on the basis that the letting agent does not have any standing to bring a claim, and that the proper claimant would be the landlord. The case would then advance to a hearing unless the agent withdraws the claim.

[msorganised]

Post up the POC that has been issued against you minus all personal details.

 

Then that can be used as a basis to formulate a defense.

 

Also go here http://www.consumeractiongroup.co.uk/forum/showthread.php?419198-You-have-received-a-Claim-What-you-need-to-do.-**UPDATED-December-2014**

 

Paste the answers here so timeframes can be checked.

 

ALSO

 

Have you acknowledged the claim?

 

 

My damn scanner has stopped working - will scan it at work and post it here tonight. Yes we sent back the acknowledgement of service last week so we have until next week to respond fully

[msorganised]

I don't understand why you think clause 7 is an unfair term. It is common for any guarantee to last for as long as the tenant remains in the property. In any event, clause 7 is not relevant to the claim against you.

 

Because the advice we were given was that the clause ("when tenancy is periodic the guarantee may be terminated by written notice by the G subject to the T vacating at the earliest legally permissible date required for possession. If T fails to vacate on this earliest date the guarantee shall continue until T vacates") is unfair as he is bound by the actions of the T - who will not vacate - and so has no control over the agreement whatsoever. If you think this is not unfair please say so as I appreciate all opinions

 

Yes, I would be offering to settle the outstanding rent but nothing else. I don't understand what you mean by 'notice' route.You can't have the whole agreement declared invalid, provided that you signed it. Unfair terms would only prevent that term from being enforceable not the entire thing.Dispute all and briefly explain the reasons. I would steer clear of talking about unfair terms to be honest - better to just focus on not having any liability of the amount claimed for which no explanation has ever been provided. If the landlord on the tenancy agreement is different to the letting agent I would also deny all liability on the basis that the letting agent does not have any standing to bring a claim, and that the proper claimant would be the landlord. The case would then advance to a hearing unless the agent withdraws the claim.

 

The LL on the agreement is the LA as well - they are a guaranteed rent agent so "sub-let" I guess

[msorganised]

I have to go back to work now but will post more and what's been asked for later - please bear with me and I appreciate everyone's input

[msorganised]

As requested SabreSheep here are the particulars of claim...

 

It was received by hand 9th Feb and the acknowledgment of service sent back 23rd Feb recorded - filled in as intend to defend part as we weren't sure what to do...

 

Some payments have been made by T but rent is still in arrears - an offer was made to catch up which they rejected (they also issued claim forms against her seperately)

[steampowered]

Thanks for posting up the POC. It is totally unclear where the £480 has come from. They refer to 'breach of covenant' so it may relate to some sort of damage to the premises, but I am only guessing given that it is not explained. I think you have to defend unless an adequate explanation is provided.

 

 

Because the advice we were given was that the clause ("when tenancy is periodic the guarantee may be terminated by written notice by the G subject to the T vacating at the earliest legally permissible date required for possession. If T fails to vacate on this earliest date the guarantee shall continue until T vacates") is unfair as he is bound by the actions of the T - who will not vacate - and so has no control over the agreement whatsoever. If you think this is not unfair please say so as I appreciate all opinions

I do not think this is unfair. It seems reasonable to me that the guarantee should remain in place while the tenant remains in the premises. I think that is the nature of the guarantee, that if the tenant does not make good his obligations the guarantor will instead.

[msorganised]

There is no damage to the property - the £480 is 2 x £240 "tenant legal costs" based on fees for them sending letters that were never received by tenant or guarantor. The tenancy agreement says their fees were set out in an appendix which they have admitted this week does not exist - they actually had the cheek to say if we wanted to know what the breakdown of the £240 was contact the "enforcement agent" who delivered the claim paperwork ourselves.

 

At one point they had another £480 on the statement on top of this but since querying they have said it had been applied in error and removed it - to me that seems like trying it on

 

My intended argument would be that the costs aren't reasonable (£560 fees inc. court fees) for a £730 debt, and as there was no prior detail of the fees (as admitted by them in writing) how can we be held by it? This is based on my interpretation of the OFT unfair contract terms - 3.80

We consider terms that bind tenants to unseen obligations unfair. It is a basic requirement of contractual fairness that consumers should always have an opportunity to read and

understand terms before becoming bound by them (see Chapter 5, Group 19).

3.81

Some terms appear to bind tenants to accept rules and regulations that are not embodied in the tenancy agreement.

Terms like these, that require acceptance of rules made

afterthe agreement is signed, may also be unfair because they allow landlords to vary the agreement to their advantage (see

Group 10).

If I am barking up the wrong tree please let me know...

[steampowered]

I agree that you should be contesting liability for the costs.

 

I don't think the stuff about unfair contract terms is relevant to be honest. Unfair terms legislation is used to attack terms in a contract - broadly speaking, if a term is judged 'unfair' against a consumer, it is not enforceable. You would need to identify the specific term in the guarantee which you are saying is not legally binding because it is an unfair term. Unfair terms law attacks particular, specific unfair words in a contract - it doesn't do anything else and it doesn't affect how contract terms are interpreted. In any event, the OFT's guidance is not legally binding.

 

I also do not think the guidance you have posted is relevant. The guidance you posted is talking about contracts which say something like 'the tenant shall be bound by rules and regulations issued by the landlord from time to time' - i.e. a contractual term which binds the tenant in advance to contractual terms he is not aware of. That is not the case here because there is no such term in the guarantee.

 

I personally would focus more on what the guarantee actually says. In particular, the facts that (1) the agreement does not include any provision making the guarantor liable for arbitrary fees, and (2) such fees would not be 'reasonable' wtihin the meaning of the agreement.

[msorganised]

I agree that you should be contesting liability for the costs.

 

I don't think the stuff about unfair contract terms is relevant to be honest. Unfair terms legislation is used to attack terms in a contract - broadly speaking, if a term is judged 'unfair' against a consumer, it is not enforceable. You would need to identify the specific term in the guarantee which you are saying is not legally binding because it is an unfair term. Unfair terms law attacks particular, specific unfair words in a contract - it doesn't do anything else and it doesn't affect how contract terms are interpreted. In any event, the OFT's guidance is not legally binding.

 

I also do not think the guidance you have posted is relevant. The guidance you posted is talking about contracts which say something like 'the tenant shall be bound by rules and regulations issued by the landlord from time to time' - i.e. a contractual term which binds the tenant in advance to contractual terms he is not aware of. That is not the case here because there is no such term in the guarantee.

 

I personally would focus more on what the guarantee actually says. In particular, the facts that (1) the agreement does not include any provision making the guarantor liable for arbitrary fees, and (2) such fees would not be 'reasonable' wtihin the meaning of the agreement.

 

 

 

The clause is point 4 - "the G shall pay and make good to the LL all reasonable losses and expenses incurred as a result of default by the tenant in the performance or observance of the Tenant's covenants under the tenancy agreement". The tenancy agreement states "we reserve the right to charge the tenant fees as appropriate and as advised in the Tenant Fee Guide attached to this agreement in appendix B". When we asked for this now (four times) as this wasn't provided at the time so we have no idea what they could charge - they have come back in writing and said that document doesn't exist - "We do not use a tenant fee guide".

 

Sorry I am struggling to see how we have come to the same conclusion but seem to have gone about it different ways, and as I will be the one filling in the defence I'm trying desperately to get my head around it. Apologies if I'm frustrating you

[steampowered]

Hi - no worries, there is certainly no frustration, noone is expecting you to be a lawyer, it is important to kick around different ideas as you need to be prepared to be challenged in court. The unfair terms argument would I think lead you down the road of asking the court to declare that the whole of clause 4 is invalid as being an unfair term and I think that is a difficult argument to make.

 

Clause 4 only seems to make the guarantor liable to pay reasonable losses and expenses incurred as a result of default by the tenant. I personally would file a Defence along the following lines:

1) Fees charged by the landlord are not a 'loss or expense' to the landlord. They are a monetary gain bearing no relationship to the actual loss or expense suffered.

2) The fees which have been charged are patently not 'reasonable' - unreasonable in amount and unreasonable in transparency.

3) The tenant is not under any liability to pay the fees under the underlying tenancy agreement, given that the fees were not included in that agreement. As the tenant is not liable for fees, the guarantor can't be liable either.

4) Fees in the order of what has been charged are a 'penalty clause' designed to deter breach of contract and do not bear any relationship to the actual loss suffered by the landlord. Accordingly any provision requiring payment of such fees is not enforceable as a penalty clause under common law.

 

If they have not provided you with a signed copy of the guarantee, put them to proof that this exists. Under the Statute of Frauds Act 1677 a guarantee requires a signature to be valid - this is obviously very old legislation but it remains in force and remains commonly used.

[msorganised]

Thankyou once again steampowered. There is a signed copy of the guarantee so no debate on that. As it stands at the moment the LA believes they have done enough to justify the fees but I guess I shouldn't give them the upper hand by telling them we don't think they have. If we send back the part defence and the court awards them at least the rent if not more, am I right in thinking there is a period of a month to pay before a CCJ is issued? As in, if paid within that time nothing would appear on a credit file? And am I also right in thinking this will take a couple more weeks anyway for any further contact from the court?

[steampowered]

If you accept liability for some of it but contest the rest you would get a CCJ straight away, but it should be removed from your credit file if paid in 28 days. I personally would defend all but separately offer to settle for the outstanding rent - once the LA have a CCJ for part of the amount they are unlikely to just withdraw the rest; but if you are going to a hearing for all of it they might settle for the outstanding rent.

[msorganised]

If you accept liability for some of it but contest the rest you would get a CCJ straight away, but it should be removed from your credit file if paid in 28 days. I personally would defend all but separately offer to settle for the outstanding rent - once the LA have a CCJ for part of the amount they are unlikely to just withdraw the rest; but if you are going to a hearing for all of it they might settle for the outstanding rent.

 

Thanks. I guess we need to be seen to be taking the complaint re the fees further rather than just leaving it at branch level or they will keep pursuing it - will trading standards look at it from a CAB referral or is it better to escalate the complaint to the agents head office then the ombudsman? Or should we just see what the court decides?

[steampowered]

Now that court proceedings have been issued, I doubt any other organisation will look at it to be honest. Head office / the Ombudsman are not going to second guess the court.

[msorganised]

Now that court proceedings have been issued, I doubt any other organisation will look at it to be honest. Head office / the Ombudsman are not going to second guess the court.

 

 

Thanks stampowered - at least we know not to waste any energy on those channels now then. I am just collating all the information we've had so the defence form can be filled in and send back - will let you know how it goes...

[msorganised]

Hi, hoping to just clarify a couple of things before completing and sending this back to the court (relates to my other thread about guarantor agreement).

 

Does a lay representative need to be listed under the witnesses box in Section D or do they just tag along on the day?

 

Also how should the papers be served on the other party to show to the court this has been done as they asked? Was thinking post office certificate of postage would look better than service by hand to their premises, or will that suffice?

 

Many thanks

[SabreSheep]

Hi there

I have merged this with your main thread. Please help Caggers by keeping to one thread per issue

 

Regards

 

SS

[msorganised]

Hi there

I have merged this with your main thread. Please help Caggers by keeping to one thread per issue

 

Regards

 

SS

 

Thanks, I created a new post as I thought I may get a reply from someone in the know who didn't necessarily need to know the background but just had experience with the court forms