British Landlord Association asks – How watertight is your Guarantor Agreement?
When you have a tenant with a poor credit rating or the tenant falls in the category of high risk, taking on a guarantor may make you feel comfortable taking the tenant on.
Amigo Loans -v- Hafiza Abbas
The case Amigo Loans -v- Hafiza Abbas, although not a landlord & tenant case, is never the less an interesting case. Landlord Advice UK one of the leading tenant eviction companies, took on a major UK Loan company. Landlord Advice UK assisted the defendant the Guarantor Miss Hafiza Abbas against Amigo Loans and successfully defended Amigo Loans claim.
Mr Sasha Charles from Landlord Advice UK said
Mr Sasha Charles CEO of Landlord Advice UK said “This case ought to focus the minds of all landlords and lettings agents when preparing guarantors agreements. Ideally, the Guarantors agreement should be incorporated in the tenancy agreement. where the Guarantor and the tenant(s) all sign the agreement so there can be no contention.”
Brief case details: – Guarantor loan provider Amigo Loans, which markets itself as a loan option for people with bad credit, has had a recent claim against a guarantor dismissed by a district judge. It was found that the company had breached principal obligations under the Consumer Credit Act 1974, as well as other acts and regulations. This has resulted in the guarantor agreement being deemed unenforceable.
Amigo Loans was seeking from the guarantor, Miss Abbas, to pay the debt in excess of £5,000. However, the Amigo Loans case was dismissed and permission for Amigo Loans to appeal refused. District Judge Beck concluded, that the guarantor agreement could not be enforced because there was no evidence to suggest that a copy of the borrower’s agreement was provided to the defendant. Although Miss Abbas requested from Amigo Loans a copy of the borrower’s agreement this was persistently denied. Initially, it is understood that Amigo Loans believed the guarantor was not entitled to the agreement, due to data protection laws. The evidence also highlighted that Amigo Loans failed to serve a cancellation notice on the guarantor.
Sasha Charles, Housing Lawyer of Landlord Advice UK, said, “The case highlights the poor conduct of Amigo Loans and their failure to protect consumers as required. The conduct of Amigo Loans may put guarantors at an unfair disadvantage due to non-compliance. The case should also serve as a warning for landlords and agents, who commonly use unenforceable guarantor agreements and may not be able to claim back their debts should their tenants’ default on payments.”
The Amigo Loans Limited v Abbas trial took place at Reigate Country court on 14th September 2016. Amigo Loans did not attend the court but was represented and submitted a witness statement as evidence. The district judge advised that the evidence was heavily disputed on a point of law before adjourning the hearing, so the claimant’s representative could take instructions, they decided to continue and did not succeed in claiming they had complied with relevant laws.
The Lawyer who dealt with the Amigo Loans case was Mr Sasha Charles.