With current demand for rental properties at a high, landlords have the luxury of being able to cherry pick the tenants they want. Not all tenants will be the cream of the crop in a landlord’s eyes, though and tenants might need to provide further reassurance that they can meet the financial obligations of a tenancy agreement. This often comes in the form of a guarantor. In this article, we review the circumstances in which the help of a guarantor may be required and what this means to both the tenant and the guarantor.
What is a Guarantor?
In essence, a guarantor is someone who agrees to provide the landlord with an assurance in the form of a ‘guarantee’ that they will pay the rent for another person as part of their tenancy agreement or contract, should the tenant fail to do so. A company or organisation can also step into this role.
Who Can Be A Guarantor?
Anyone can be a guarantor provided they meet the criteria set out by the landlord or an agent acting on the landlord’s behalf. Generally speaking, typical criteria might include either:
- that a guarantor needs to live in the UK (this makes any potential legal claims against a guarantor much easier than if they live abroad) or:-
- that a guarantor must be able to meet any financial obligations set out in the tenancy agreement. A landlord is unlikely to want a guarantor who is not in a financial position to pay outstanding rent or for any other liabilities should the tenant default.
What Circumstances Might A Tenant Need a Guarantor?
Before taking on a tenant to rent a property, a landlord or person acting on their behalf will conduct an in-depth check of credit history and finances, along with references to see if the tenant is likely to be able to meet the terms of an agreement. Obviously for a landlord, the ideal tenant is solvent with a very good credit history, in long-term regular employment or able to pay the entire rental amount of the agreement in full up front. However, finding someone who meets all these criteria is not always easy. There are, however, some specific indicators which might make a landlord concerned over a tenant’s ability to pay their rent:
- holding no credit history or a poor credit history
- a tenant on a zero-hours contract with their employer
- being unemployed or on a low income – likely not having enough money each month to cover the cost of rent
- a student not in regular employment
- anyone returning from living abroad or leaving the Forces
In these cases a landlord or their agent might ask for a guarantor to mitigate risk.
What If I Can’t Find a Guarantor?
Unfortunately, if you happen to fall within any of the above categories, a landlord is unlikely to take you as a tenant without a guarantor. Working to improve your circumstances or living with friends or family until you are a more attractive tenant for a landlord could be your only option.
What it means to be a guarantor?
It’s vital to think very carefully and be fully aware of your obligations and responsibilities if you agree to be a guarantor. The commitment you are making is a big one – to take full responsibility for the payment of rent for the property, should the tenant default. Be prepared for the fact that you might also be liable for other financial responsibilities such as payment for any damage that has been caused or possibly even, in the case of a joint tenancy, the rent for anyone else named on the agreement. This is a common occurrence when a group of students are taking on a joint tenancy, for example where each tenant is joint and severally liable for all the rent. It is important to understand that if you, as a guarantor, do not pay for any liabilities arising from being a guarantor, then you could be pursued through the courts by the landlord.
Having a guarantor is one way of helping you secure a rental property where the landlord might not otherwise have considered you. It is important, however, that everyone understands the responsibility that comes with this.
If you are seeking a move to a rental property, we would be happy to help you on that journey. Start your search for your ideal property using the Properties to Let section of our website.
