Here is a question to the blog clinic from Teresa (not her real name) who is a guarantor
I know it’s not a pretty subject but I need some help please.
I am in the unfortunate situation of being a guarantor of a tenant who has died.
The flat was rented through a private landlord who has said despite the tragic circumstances, that I am now responsible for the rent. Is this true?
A tenant dying does not end the tenancy. What happens to it depends on whether the tenancy fixed term has ended or not.
If the fixed term is still running, then the tenancy will pass to whoever inherits under the tenants will or intestacy. However pending this the rent will be payable by the estate of the deceased.
If the tenancy is a periodic one, then it will pass under the succession rules, but in this case I assume that the tenant was living there alone. In which case again it will pass under the tenants will or intestacy, and initially will be the responsibility of the personal representatives.
I am not a trust and probate solicitor but my feeling is that the guarantee will not be ended by the tenant dying. So you will be liable as guarantor during the administration of the estate.
If the tenancy was then formally assigned to someone else by the executors I think your liability would end (as you did not sign to guarantee the new tenant), but realistically this is unlikely to happen.
So to get you ‘off the hook’ the tenancy needs to end. If the tenancy is a periodic one, then the executors can serve a notice to quit on the landlord which will end it. There may also be scope for you to terminate your guarantee – have a read of exactly what it says.
However if the fixed term still has some time to run, you will be in difficulties. However you will have the legal right to claim against the tenants estate (if he owned anything of value) if you have to pay any money out.
Most guarantor agreements I have seen contain a clause stating that the guarantor’s liability specifically does not end with the death of the tenant.
A tenancy agreement is a contract just like a mortgage or a credit card and contracts do not end on death of the person who took it out. As Tessa has mentioned there are certain rights for 3rd parties to inherit tenancies but if the tenancy ended automatically on the death of the named tenant then this wouldn’t be possible and people could be forced from their homes.
It may seem unfair in the circumstance where no one wants to inherit the tenancy, but is it fair that the landlord should be out of pocket? As an example, for that one tenancy the landlord may have paid 1% of the property value in transfer fees on the sublet and letting agency fees, as well as the costs of an EPC, electrical safety inspection, deposit registration, inventory/check in etc. They were expecting to have the property income producing for a set period of time to off-set those costs and then hopefully get a return.
The best bet is to try and negotiate. In these situations most landlords will agree to release people form their obligations once the property is re-let, although the estate/guarantor may still be liable for any additonal costs relating to the re-let.