Doc Wordinger lives and works in central Manchester. He has a fondness for golf, poker, fine literature, art, and film.
Read This Before Being a Rent Guarantor
You’ve just been asked by a desperate son, daughter or friend to act as guarantor for the rent on their new apartment. You’re their last hope, the only person who can save them from homelessness. But you’re not exactly sure what is expected of a guarantor, or what it even is. It sounds risky and potentially expensive. If this scenario is familiar and you’re experiencing some of these doubts, this article is for you.
So What Actually Is a Rent Guarantor?
A guarantor for rent on a residential tenancy is somebody who acts as surety by legally agreeing to take over the financial obligations of the lease in the event that the tenant defaults. This often means that a guarantor is liable for any rent or property damage that the leaseholder has failed to cover. A letting agreement like this provides a form of insurance for the landlord that covers his losses if the tenant refuses to cough up the rent or simply vanishes into thin air.
Being a rent guarantor is high risk, low reward. Worst-case scenario: you get saddled with someone else’s debt. Best case scenario: the tenant you are sponsoring pays all the rent, in a timely manner, and lavishes you in eternal gratitude.
And Why Would Somebody Need One, Anyway?
There are a number of reasons why a landlord or letting agency might ask the potential tenant for a guarantor…
- They’re a student or a young person with no credit history.
- They’re the unfortunate owner of a poor credit score due to previous defaults, court orders or even bankruptcy.
- They’ve just started a new job or don’t earn much money.
- They’ve moved around a bit or have just returned from abroad.
- They can’t obtain a sparkling reference from a former landlord or agency.
A prospective tenant might find himself in the bizarre predicament of having a secure, handsomely paid job yet still needing a guarantor, possibly due to a disastrous credit rating or former nomadic lifestyle. If they can’t find somebody to stand surety, shopping around other letting agencies in town is a sensible move; each company has different criteria for judging who is a worthy leaseholder or a credible guarantor. If that fails, they are left with few options although offering six months' rent upfront is usually a deal-clincher.
Thinking of Being a Rent Guarantor Yourself? Stay Sharp and Read on…
Claims against guarantors are on the rise and prerequisites for standing surety are becoming more stringent. It might be a requirement that you are a homeowner and you will almost certainly have to prove that your income is over a certain threshold. For example, the landlord/agency might demand that your yearly salary or income has to be a minimum of fifty times greater than the tenant's monthly rent payments. Therefore, if the monthly rent was £400, you may need a minimum income of £20'000 to be considered as a guarantor. On top of this, it will be a necessity that you have been in your current job role for at least several months, possibly longer.
In order to complete an application, the agency carrying out the check will ask you for some or all of the following information:
- Your name and date of birth.
- Your national insurance number
- Your contact details including duration of stay at your current address.
- Your employer details such as the name of the company you work for, the contact number of your manager or HR department, your salary and length of time in current role.
- Your bank details.
Armed with this information, the agency will seek assurance that you are suitable to act as guarantor by carrying out a background and employment check. This entails contacting your employer to confirm your salary and the date you began the job. Depending on the criteria of the agency performing the verification, they may also carry out a check on your credit history.
- Take note: If a credit check is performed, fingerprints will be left on your credit file. Several credit checks carried out in a short period of time can lower your credit score.
The Guarantor Agreement
The second part of the process, once you’ve been green-lighted, involves checking and signing the Guarantor Agreement. It is important that you are clear about your obligations as guarantor. Be vigilant and ensure that you understand the wording. Ask the landlord or agency for clarification if necessary and as an extra safeguard, you could always run the agreement past your solicitor or legal advisor.
Before signing the agreement, make sure you know the answer to the following questions:
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- Who are you agreeing to act as guarantor for? This might sound like a stupid question but if you are the parent of a student, you need to be certain that you are only liable for the rental obligations of your son/daughter and not the entire student animal house.
- In financial terms, what is the extent of your liability?
- How long will your term as guarantor last? What happens in the event that the tenant wishes to extend their tenancy agreement once the initial contract has expired?
- How quickly will the landlord or letting agency contact you if the tenant misses a rent payment?
- What course of action will the landlord take if the tenant stops paying rent or moves out from the premises without giving formal notice or adhering to the tenancy agreement?
It is also worth noting that if you are required to fill out an online application, the actual legal agreement might be tied in to the same stage of the process where you submit your personal/employment details for approval. Again, make sure you are absolutely clear. Each agency has a different system of application and there is no common formula for the wording of a Guarantor Agreement.
Before Being a Rent Guarantor, Make Sure You Can Answer Yes to the Following Four Questions:
- Do you completely trust the tenant whom you are agreeing to sponsor?
- Are you financially capable of taking over the obligations of their lease if they let you down?
- Are you comfortable having an employment and credit check performed on your name?
- Do you fully understand your responsibilities and liabilities, as outlined in the Guarantor Agreement?
For many people, being a rent guarantor is about lending a helpful hand to family members and friends. But it can turn ugly. Make sure you minimise your exposure to risk, and be prepared to take a hit if things go wrong.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
© 2011 Doc Wordinger
Breanna on April 26, 2019:
I'm a tenant not a guarantor. My father is the guarantor, and he signed from May 2018 to this August 2019. This goes into a little more personal territory, but I think it's necessary to fully understand the situation at hand. I moved a way from home because he is manipulative, emotionally abusive, verbally abusive, and sometimes physically. I give up on trying to find justice for his abuse. The last time I tried was in my senior year of high school 3 years ago. He's a firefighter, he was arrested and had to show up to court. He was never incarcerated the protective order was pointless. It pretty much said he could see me, but he couldn't put his hands on me again because he would be automatically convicted then. He's a good manipulator and gas lighter, so he tried to convince me that I could also get in trouble for throwing stuff claiming it almost hit my brother. (It didn't he'll do anything he can to change his story to claim innocent.) In the past there were 9 dcf cases. In the end he was un convicted and was promoted to chief training officer at his department. So I was determined to get out. I went to a college for students with learning disabilities and flunked because I was beside myself with unanswered questions, confused memories, piled up childhood stress, etc. I ended up going back to my mom's house. She's a good person and she's also been through a lot, but I can't grow there I tried. I convinced him to sign a guarantor lease so I could find a job and get a therapist. I'm in trauma therapy for C-PTSD, and I'm doing a lot better. Now my father is complaining about financial issues, blaming me for being an unruly child who in his words, "should have been arrested." I'm just trying to continue healing and survive. He told me to f off, and to grow up and now I'm going to have to deal with rent on my own because he's not paying. He legally signed, and at this point I'm definitely holding him to it. My new job doesn't pick up enough hours until June. I was set before with another job I enjoyed. The manager was a good a man, but too trusting. His business partner stole from him and he was forced to close so I no longer work there. I've been told to get another part-time, but I don't think I can mentally handle another part time job. The job I was doing I felt like I was doing meaningful work, and I didn't feel over stressed. What I'm trying to figure out is there anything I can do to make sure he pays for rent until the lease ends or I can afford it? Another thing I want to know is there anything can do to wreak more havoc and stress on me financially?
Mark on February 06, 2019:
My daughter has no heat in her apartment and the landlord ignores her as a guarantor do I have a right to complain to landlord?
Kelly on July 25, 2018:
My daughter asked me to be a guarantor for her while she does her masters degree and I was fine with this till the agent sent me an email stating “I also need to highlight that all tenants are joint and severely liable so while you are only providing a guarantee for Tanner you will be liable for the full rent of all tenants and any damage that they may cause.”
Bonkers! Who in their right mind would sign as guarantor on a joint tenancy? You may as well pay the rent for the whole house (which wasn’t disclosed) for a bunch of random strangers. How can agents and landlords think that this is OK?
Tom on July 25, 2018:
I was wondering does being a guarantor for someone link your credit score as I've heard this is the case. Thanks
Yvette rolfe on April 28, 2018:
If I act a guarantor for my daughter, do I have to complete a tenancy application for as well as my daughter?
David on March 10, 2018:
Excellent advice put simply
Lauren Matthewson on August 13, 2017:
Hi everyone! Not sure if you will see this but I need help.
I'm getting my very first flat at the grand age of 26. I'm going to Uni as a mature student in September, but am currently full time employed. My credit check came back through clear but needed a guarantor due my work being minimum wage and not enough hours for an affordability check.
So I asked my Mum as I thought this may happen, she has a good income of 27k+ and has a had a mortgage for 24 years, I had to provide her proof of earnings and an annual mortgage statement. However the mortgage statement showed an arrear of £220 from last year which has now been paid. They are now saying she is not a suitable guarantor! Even though the landlord is happy for it to go ahead, you e just gotta tick the boxes. But I've paid £300 holding deposit which I don't want to lose and £250 in furniture.
Hi I went guarantor for my sons girlfriend they split up he moved out she stayed in it then left it empty but still keeping the keys built up a hefty back lash of rent arrears which I have had to pay on January 24, 2017:
Hi I went guarantor for my sons girlfriend for their flat, they split he left she stayed then left it and stayed with her mum but kept keys and didn't tell landlord built up a hefty arrears now I am having to pay I have paid half and due to circumstances I physically can't afford to anymore what will happen to me. Susan
peter on November 29, 2016:
If you go guarantor for you son, how long are you liable for the comsequences?
Suziedoo on November 01, 2016:
Can you be a guranntor if you live France and family member lives in the Uk
Tina on August 25, 2016:
I signed as guarantor for a friend who has not paid for three months. I have been advised that I signed an agreement, rather than a deed. do I have rights to not pay?
justin foxton on July 04, 2016:
My friend ask me to be a guarantor for him ,I agreed,so went online and gave a few details ,like name where I worked ,where I lived.Then didn't hear anything back ,like if I needed to go sign agreement and legal documents to be the guarantor
.My friend said that's all they needed was a few details online on there site?can they do this or do they need my signature to be legally binding ?
jay on July 04, 2016:
Can you be a guarantor just by filling online application?or do you need to sign signature to make it legally binding
Cemal on May 20, 2016:
Can an insolvent person be a guarantor within a commercial lease? and what if he doesn't display the facts of his insolvency to the landlord?
l'm pretty sure that is contract fraud and makes the contract void.
Doc Wordinger (author) from Manchester, UK on June 10, 2015:
Neil - This will depend on the wording of your guarantor's agreement. At the very least, you are probably committed to remaining as guarantor until the tenancy agreement is next up for renewal. You could try appealing directly to the landlord or letting agency, and then seeking legal assistance if necessary.
Doc Wordinger (author) from Manchester, UK on June 10, 2015:
Wayne - To answer question C regarding the guarantor's credit rating, please see this short Q & A on Experian's website - http://www.experian.co.uk/consumer/questions/askja...
Regarding questions A & B, I think it would be prudent for your family member to seek direct legal advice. They should ensure they have a copy of their guarantor's agreement and the original tenancy agreement. I'm sorry I couldn't be of more help.
Doc Wordinger (author) from Manchester, UK on June 10, 2015:
Joan - This is what you are signing up for as a rent guarantor; in the event of unpaid rent or damage to the property, you become responsible for the debt / costs. Did your sister pay a deposit before moving into the premises? You should ask the landlord for a list of the repairs he intends to carry out and the estimated cost. The original deposit may cover these costs. You would still be liable for the unpaid rent though.
neil on April 07, 2015:
Hi can i get out of being a guarantor .i did it for a family friend 2 years ago and things aren't what they were anymore.i need to sign off the agreement is it possible or how much notice do i need to give thanks
wayne on March 15, 2015:
If the tenant gives notice are you released as a guarantor at the end of the notice period or is it just that, a notice, and still liable until keys handed back and tenancy terminated ?
I explain a predicament a family member (England by way) has got themselves into. They signed as a guarantor for 12 month leases but understand it auto renews, not questions there. Person they are guarantor for has handed in 2 months notice (possible to do as been there 6 months) but has now told family member that they can't get out as nowhere to live so are going to squat after the notice expires. Obviously the landlord will take her to caught but
a) what are the liabilities in respect of rent after the notice period has expired ?
b) are they fully responsible whilst tnt squats, and who will be taken to caught and incur the costs, tnt or guarantor ?
c) Will the guarantor also get a bad credit rating in this scenario ?
joan on March 12, 2015: