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Jo C.
Jo C., Barrister
Category: Law
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Experience:  Over 5 years in practice
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I am being pursued of a debt rent on a lease to

Customer Question

I am being pursued of a debt for unpaid rent on a lease to a limited company that I personally guaranteed.
The landlord's solicitors put in writing that the landlord would forego 50% of the amount of rent outstanding at the time the company went into a CVA.
Solicitors now say that this does not release the personal guarantee. My view is that if a sum is foregone, ie relinquished or waived, the guaratee is irrelevant - there is no debt to guarantee.
Submitted: 1 year ago.
Category: Law
Expert:  Jo C. replied 1 year ago.
Hi.
Thank you for your question. My name is ***** ***** I will try to help with this.
It depends on what was said.
Was there a condition attached to this? Seems to be an odd offer for no condition at all.
Customer: replied 1 year ago.

No obvious condition - the wording was

"Curtis (landlord) agreed to forego 50% of the rent then outstanding"

The "then" was at the time of the CVA

Expert:  Alex J. replied 1 year ago.
Hi,
Thank you for your question and welcome.
My name is ***** ***** my colleague has asked me to assist you.
Do you have the exact wording of the guarantee?
Kind regards
AJ
Customer: replied 1 year ago.

The guarantee guarantees the rent payable by the company, this is not in dispute.

If however a portion of rent has been foregone that portion is not due therefore there is nothing to guarantee within that portion

Expert:  Alex J. replied 1 year ago.
Hi,
Thank you.
Does the guarantee or lease contain a non-waiver clause that says something like:
"Waiver. A party's failure to exercise or delay in exercising any right, power or privilege under this Agreement shall not operate as a waiver; nor shall any single or partial exercise of any right, power or privilege preclude any other or further exercise thereof."
For you to claim that the landlord has given up the right to this rental you would need:
(i) At the very least something in writing from the landlord; or
(ii) A potential defence of estoppel, where you relied on the landlords promise that he would give up a claim to have the rent to your detriment and changed your position accordingly.
If the landlord only made this statement verbally it may be nothing more that an indulgence. Did the landlord make this statement to the CVA administrator?
Kind regards
AJ
Customer: replied 1 year ago.

Unfortunately there is such a clause with similar wording [but without the actual words "non-waiver" but I would have thought that this would be over-ridden by the landlord's solicitor stating, in writing, that part of the debt was foregone.

I have nothing directly from the landlord, only from his solicitor. The landlord was present during the meeting with the solicitor and the letter indicates that he concurred with the decision.

Regardless of any non-waiver clause or similar, I cannot see how a guarantor can be liable for a debt that has been written off

Expert:  Alex J. replied 1 year ago.
Hi,
Thank you.
What is the exact wording of the waiver that the solicitor gave you?
Did you act in this waiver in any way? Did you do anything that was to your detriment?
Kind regards
AJ
Customer: replied 1 year ago.

letter dated 15th January 2015

The property is owned by Curtis. UK Coasters Ltd had financial difficulties in early 2014 and entered into a company voluntary arrangement.

Curtis agreed to forego 50% of the rent then outstanding.

Do not understand the question " did we act in this waiver in any way?"

As far as I know, we did nothing that was to our detriment

Expert:  Alex J. replied 1 year ago.
Hi
Thank you.
What I mean by "did you act on this waiver" - did you do anything in reliance of this waiver? For example was this only reason you agreed the CVA?
Kind regards
AJ
Customer: replied 1 year ago.

No, the waiver came after the CVA had been put in place

Landlord voted for CVA in Jan 14

The letter foregoing the balance was in Jan 15

Expert:  Alex J. replied 1 year ago.
Hi,
Thank you.
Ultimately whether they sue you personally or not is their prerogative. All that will happen is you will have to convince a Judge that this was a valid waiver of the debt.
On that basis have you made them an offer to try and settle?
Can you tell me what the definition of the "guaranteed liabilities" is under the PG?
Kind regards
AJ

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