1. T must be served with a notice warning him of the consequences of contracting out (ie loss of security of tenure); and

2. T must then confirm that he has received the notice. This can be by a simple declaration if L’s warning notice is served at least 14 days before T signs the tenancy (or a contract). If the warning is served less than 14 days beforehand, then T must make a statutory declaration.

All of this has to be done before T becomes ‘contractually bound’. But, as we mentioned in our September issue (p20) there is no mention of guarantors in the Regs. That then raises the question of when a guarantor becomes ‘contractually bound’ and that could, arguably, be when he first signs the guarantee. In any event, if the original lease is excluded from LTA 1954, then the new lease to be taken out by the guarantor will also need to be excluded – but the problem is that an agreement by the guarantor to enter into an excluded lease will be void unless the proper notice is given, and a declaration made (as above).

What is to be done to avoid this possible problem? The best solution seems to be to serve a separate notice on the guarantor confirming that any new lease to be taken by the guarantor will be excluded from LTA security of tenure, and then get the guarantor to respond with a simple declaration or statutory declaration. In other words, simply duplicate the statutory procedure in respect of the guarantor’s potential new lease.  © Practical Lawyer