Tenants guarantors and their responsibilities

Tenants guarantors and their responsibilities

As tenant referencing has become more widely used, landlords have become more accustomed to using guarantors when the tenants reference report come back with concerns, rather than reject the application altogether the landlord or letting agent may ask for a guarantor.

Typically this is a relative of close family friend – someone who wants to vouch for the tenant and agree to accept the contractual liabilities on behalf of the tenant. This essentially means paying the rent, or covering the cost of damages if the situation arises. Signing a tenancy agreement as a guarantor is a legally bound agreement to accept these liabilities, and should not be a decision taken lightly – however, often guarantors do not realise (or acknowledge!) just how liable they actually are, and if it all goes wrong many guarantors try to cancel the agreement (which they can’t).

Being a guarantor is a big responsibility, in most cases a guarantor is requested because there is something not quite right with the tenancy application or reference which gives the landlord some concerns, whether they are justifiable or not, they want some extra assurance – as in the guarantor.

Asking the guarantor to pay the rent

Unfortunately for the guarantors, they don’t often expect that they will ever be called upon to pay the rent if the tenant defaults, so when they are asked it does usually come as a shock! Understandable they probably just wanted to help their son / daughter get accepted for the favourite property they wanted to rent and thought nothing more of it….

How soon can you ask the guarantor to pay the rent

There is no set time scale how long you need to wait before you ask the guarantor to pay the rent. As the guarantor is liable for the contractual obligations of the tenancy agreement you could technically ask them for a rent payment the day after the rent was due (as the landlord is entitled to receive the rental payment in full up to midnight on the date it is due). So any time after this the landlord is entitled to contact the guarantor!

What to do if the guarantor refuses to pay the rent also?

Guarantors are legally obliged to pay the rent if the tenant defaults, and you could take them and the tenant to court if they refused to do so. Guarantors are usually asked because they can prove they are financial stable whereas the tenant may not have been, and therefore they are likely to be more concerned with their financial status and will do what they can to protect their credit rating.

Some landlords also insist that the guarantor is a home owner, this provides extra security should a dispute arises which requires court action, as it provided a permanent address in which the landlord can serve legal papers and secondly, the fact that the guarantor owns a property means that if you have to enforce a court money order then you have a more reasonable chance of having the money order to be settled quicker than 5 pence a week!

Guarantors of young people and students sharing accommodation

Parents of students and young people sharing a property (HMO) are often asked to guarantee their children’s rent. However parents need to be aware that this makes them jointly and several liable for the whole of the tenancy (not just their son or daughters share). This in effect means the parent has guaranteed the whole of the rent. It is also important to understand if all the parents of the children are acting as guarantors (as this is not to be assumed!)

How can landlords take legal action against guarantors

In 9 out of 10 cases the tenants guarantor will quickly pay the debt as soon as they are made aware of the problem. Depending on how your tenancy agreement is worded will depend on how much of the debt the guarantor is liable for. For example if your tenancy agreement states that the landlord should minimise their losses for the guarantor then this is expected to mean you will commence eviction proceedings as soon as possible rather than let the tenancy agreement continue whilst expecting the guarantor to pay the rent.

However in the small number of cases where the guarantor is not forthcoming with the rental payments then legal action is appropriate. The first stage in this would be to send a pre court action warning letter. You can get these from Evictions South East for £25, a purposely demanding letter to the guarantor stating that court action will start within 14 days if the debt has not been cleared.

Once 14 days has passed and if no payment (or partial payments) have been received then the landlord is well within their rights to start court action to recover the debt.

Written by Sue Ralston4snet.co.uk

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