You have agreed to act as Guarantor and signed an Assured Shorthold Tenancy Agreement for a family member or friend. The lease Agreement was for a fixed period which has now expired. The landlord is now looking to you for payment of the rent but the lease has expired. Why then are you liable to pay when the lease was only for 6 months?
It is a common misconception that a guarantor will only be liable for payments for the initial period of a lease agreement. Under an Assured Shorthold Tenancy (AST) the term of the tenancy may be typically stated as 6 or 12 months, however the tenancy must be brought to an end, it will not just run out at the expiry of the fixed term.
In order to end an AST formal notice must be given by the landlord or tenant to bring the tenancy to an end. If notice is not given, the AST will continue to run until such notice has been served, that is given to the other party.
The effect of this of course is that the AST could run on for years.
For a party who is considering becoming a guarantor and to be liable for payments not made by the tenant, this is a very important decision to make.
Often guarantors will be family members or close friends who have agreed to be a guarantor to help the other party out and people will enter into these agreements without being fully advised or informed about what it actually means. If that person stops paying the rent either through choice or through financial difficulties, the landlord will come to you for payment. This means that they might issue a claim against you for payment, which may result if a CCJ being registered against you. You will also have to pay the Court fees and costs. Once this happens, you may encounter visits from bailiffs or charges may be put on your own property.
For a party considering becoming a guarantor, we would always advise taking legal advice before signing any documents so that you are better informed.
If you are a guarantor and no longer wish to be, you must obtain the consent or agreement from the landlord before you will be released from your liabilities, which, if the rent is in arrears, the landlord is unlikely to agree to.
In summary, you may find that you are liable for all unpaid expenses the landlord has until the Tenancy is ended.