Q. What points should I look out for if I am considering asking my tenant for a guarantor?
A. Landlords should ask for a guarantor if there are any doubts about the tenant’s ability to fulfill his or her tenancy obligations but where the landlord still wants to take him/her on as a tenant. This is usually where the tenant does not meet one or more of the following requirements:
1 Has not lived at the present address for more than 6 months
2 Has not worked for present employer for more than 6 months
3 Is a student
4 Is below the age of 21
5 Has a low or non-existent credit score
A guarantor guarantees (underwrites) the tenant’s obligations; to pay rent, to pay for any damage, to pay for cleaning, any outstanding bills or any other tenancy related liabilities.
Guarantors should be credit checked and referenced as you would a tenant
Guarantors should show that their earnings or resources are sufficient to pay all tenancy liabilities if necessary.
Guarantors should be home owners.
Where you have a joint tenancy situation, for example a student house, all tenants are individually and severally liable for all tenancy liabilities. Therefore, a guarantor guaranteeing one of the tenants in effect is guaranteeing them all. Not all guarantors are aware of this and they may be unwilling to take on this responsibility if they know. However, the risk is somewhat reduced where ALL the parents of a house of students act as guarantors, though in theory any single one of them could be held responsible.
Landlords should be aware that you cannot hold a guarantor liable for obligations he/she is not fully aware of, or for terms in an agreement which are deemed to be unfair. Guarantors MUST have seen and approved the tenancy agreement they are guaranteeing prior to the signing and they must also sign a Deed of Guarantee. This signing should be witnessed.
Landlords should also bear in mind that any variation in the agreement, including the fixed-term coming to an end and tenancy renewal, if done without the guarantor’s consent, will discharge the guarantor’s liability.
If the tenant defaults in the payment of rent or any of the other tenancy obligations the guarantor will pay the landlord.