Several factors might lead to a tenant needing a rent guarantor, and either the landlord or the renting agent handling the property can request one. You’re in the right place if you’ve been asked to be a rent guarantor or to find one for someone else but aren’t completely clear about what that means.
This page contains all of the necessary information you need.
Let’s first address the core issue before getting into the specifics of rent guarantors and what is expected of them. What does a rent guarantor do?
What exactly is a rent guarantor?
A rent guarantor is exactly what its name suggests: a person who is capable of ensuring that the rent will be paid if the tenant fails to do so. But, rent can also be insured by a business, organisation, or institution; rent guarantors do not always have to be private citizens.
The existence of a rent guarantor basically provides landlords with a security net in the event that the tenant stops paying the rent. A rent guarantor must have full confidence in the person they are supporting because the agreement is legally binding.
When might a renter require a guarantor?
There are many reasons why a tenant can be asked to get a rent guarantor, as we said in our introduction. The most typical are listed here:
- If this is your first time renting or if your previous landlords haven’t given you any references,
- Those who are new to the UK
- If you don’t have a job
- If your income is insufficient
- In case you are a student
- Whether you have a bad credit history or none at all
What obligations does the rent guarantor have?
It goes without saying that the rent guarantor will be responsible for any overdue rent, however some tenancy agreements may go further. Some landlords may demand the guarantor to be the tenant’s financial support system for other requirements, including any damage made to the subject property, depending on what is specified in their lease.
The only way to be completely assured of your duty as a guarantor is to read the contract carefully before signing it, as each tenancy agreement will differ. This is particularly important if the tenant you’re supporting will be sharing a home with other people because the contract can even contain a “Joint and Several Responsibility” clause.
A joint and several liability clause basically states that everyone named in the agreement is responsible for paying all expenses, regardless of who violates their responsibilities. This implies, in essence, that the other renter would be responsible for covering any arrears if a roommate decided to cease paying rent. This extends beyond only the rent and encompasses all of the items stated in the tenancy agreement.
What responsibilities does the rent guarantor have? The only response that is appropriate for that is “it depends”. But one thing is certain: the guarantor must comprehend the tenancy agreement in its entirety before signing.
Who may act as a rent guarantor?
As mentioned in the original “What exactly is a rent guarantor?” section, a rent guarantor can be a person, company, non-profit organisation, or charity. To be honest, there are no legal restrictions on who may or may not fill the position; it is up to the landlord or leasing agency to pick who they believe matches their own qualifications.
However, there are a few things absolutely all landlords will agree on:
The guarantor must live in the UK
Although it is not legally required, almost all landlords will prefer that the guarantor be someone who lives in the UK. This is done primarily for convenience, as it will be easier to monitor financial records, but it will also make it simpler for the landlord to take legal action if necessary.
The capacity to prove their financial stability
The guarantor must have adequate funds to cover all possibilities, which is a clear and universal condition. It is also strongly mentioned that to meet this need that the guarantor be a resident in the UK, although it may also be shown in other ways as long as it satisfies the particular landlord.
The guarantor agrees to undergo background checks
Although a guarantor may say they can pay all expenses, it’s rare that a landlord will accept their word for it. The evaluations that will be conducted are what we’ll examine in the section after this.
What kind of verifications may a rent guarantor expect?
In summary, a rent guarantor should expect that the same verification will be performed on them as would be performed on any renter.
Rent guarantors can expect that their credit history, job history, and whether or not they have any CCJs against their names or have recently been declared bankrupt will all be checked, though particular checks may differ from landlord to landlord.
An Ownership of Property check on the Land Register may also be performed by homeowners.
Can my landlord speak with my rent guarantor?
Certainly, but only when you become behind on your rent. It will likely be a relief to people who have their parents registered as guarantors to hear that your landlord shouldn’t contact them over other matters, such as noise disturbance.
In the event that the guarantor becomes ill or loses their work, what happens?
We are all aware that unpredictable situations can arise, and rent guarantors are not exempt from this. So what happens if the worst-case scenario occurs? Sadly, the liability still exists for the rent guarantor. They would still be responsible for paying the expenses they stated they would when agreeing to serve as guarantors.
Even extreme events like bankruptcy and death might not free them of responsibility. When someone declares bankruptcy, the landlord might be listed as a creditor, and if the guarantor passes away, their estate might be used to pay the obligation.
In summary, providing a guarantee for rent is a serious commitment that should not be taken lightly.
Trust is as vital for tenants as it is for landlords therefore we are fully accredited and recognised by all major industry governing agencies, such as:
- The National Association of Estate Agents
- Tenancy Deposit Protection Scheme
- The Association of Residential Lettings Agents
- The National Approved Lettings Scheme
- The Property Ombudsman
You will always be treated with respect at Western Lettings because of our bespoke approach to agency life; you are never just a number to us. Since effective communication is essential to our sustained success, our seasoned lettings team will be by your side at every step.