Everything You Should Know About Being a Guarantor.

Everything You Should Know About Being a Guarantor.

When renting a private property or a room in a house, the potential tenant may be required to provide a guarantor. This is the person who is legally liable for the rent if the tenant fails to pay or for any damage caused during the tenancy.

A guarantor is frequently a parent, relative, or close friend who is willing to guarantee to the landlord that the tenancy agreement will be followed.

what are they responsible for?

They take on financial responsibility for the tenant's rent and other obligations, such as paying for any damage to the property. They serve as a safety net, assuring the landlord that they will receive the money owed even if the tenant is unable to.

When Would You Need a Guarantor?

In a rare case, a landlord will request a guarantor. It might be because: 

• You are a student; thus, you will have little or no income from normal employment and will most likely rely on student loans. In this circumstance, parents are most likely to serve as guarantors.
• You are a young person—if you have little or no borrowing history or have only had a bank account for a short time, you will not have a very excellent credit score.
• You've recently come to the UK; in order to get a credit score, you must have stayed in the country for at least 3-6 months and maintained a bank account.
• Your income is modest or you are unemployed - If you do not earn much or receive Universal Credit, a guarantor may be necessary in the event that you run into financial difficulties.
• If you are renting for the first time and cannot produce a reference from a former landlord,

you may be requested for a guarantor. However, if you have a significant salary, you may not need one.

The Process to Become a Guarantor?

If a tenancy agreement includes a guarantor, the guarantor, tenant, and landlord must all fill out and sign a separate form known as a guarantee application form.

The guarantee agreement will specify the relationship with the tenant, whether the guarantor is liable for only rent or additional charges, the dates of the tenancy, and the amount of rent expected.

Additional checks will be required, including:

Proof of UK citizenship.
A resident UK home owner
Aged between 25 and 70 years
In full-time employment
Additional affordability requirements.

It is vital to note that the tenancy will not begin until the guarantor has signed and been accepted.

When do the Guarantor's responsibilities end?

The guarantor’s liability comes to an end when the tenancy ends. If the tenant’s contract doesn’t have a specific end date agreed it will be when:

• The tenant serves notice and the agreed end date.
• By mutual agreement by the landlord and the tenant to decide on an end date
• If there is a court repossession order
• The death of the tenant

Does the guarantor have to live in the UK?

Yes, landlords and agents typically want a guarantee to live in the UK so that a credit check can be conducted, as each country has its own checks and systems that cannot be shared.

If you are an international student and cannot obtain a guarantor, you may be expected to pay a portion or all of the rent in advance.

What are the implications for a guarantor?

Serving as a guarantor for someone is a huge responsibility. To determine how much risk you are taking, you should have an excellent personal relationship with the tenant and a thorough understanding of their financial circumstances. Guarantors are typically the tenant's parents or other close family members.

It is critical that a guarantee thoroughly examines the contract to determine whether the tenancy is an individual tenancy, in which case they are solely liable for that person's rent, or a joint tenancy, in which case one guarantor may be responsible for other tenants in the house not paying their rent.

As a guarantor, you should ensure that your own finances are robust and steady in case the landlord or court requires you to pay the funds owed.

If guarantors have any questions about any aspect of the agreement they are signing, they should consult with the letting agent or seek independent legal counsel.