Summary
In summary, a guarantor will only last for the fixed term unless there is a term to the contrary. In order for the guarantee to continue into any periodic tenancy, there must be clear words detailing this (see below). The guarantor may give adequate notice during a periodic term (for “adequate” see below). It may be possible to require a replacement guarantee if notice is given but this latter point is to be tested. If a renewal tenancy is granted, the guarantor should always sign again.
Case Law
Subject to contrary terms, a continuing guarantee can be revoked in respect of liabilities accruing after the date of revocation, provided that the consideration is suitably divisible, and the creditor is given adequate notice [Wingfield v De St Croix (1919)].
In the absence of clear words, a surety’s liability under his contract of guarantee will extend only for the duration of the contractual term; it will not
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As it is not always possible or practical to get the guarantor to sign again on every renewal and even though the Guilds deed of guarantee has a provision for that, (but not tested in court yet) there is a risk a judge may rule against as there is no end date to the obligation as guarantor.
Is there any merit in having an end date on the guarantee of say 5 years (or whatever date you chose) to strengthen the deed and help cover for renewal of tenancies.
I personally don’t think this is necessary because it ends on an event i.e. when the tenancy ends. As long as there is some mechanism such as the tenant leaving, in my view it continues perfectly and doesn’t need any amendment.
I would always recommend signing the guarantor again (which I know can be difficult) on any renewals. That part of the clause has not been tested as you say and I would rather not test it wherever possible!
Many thanks
Guild of Residential Landlords