Landlord advice on CCJ's and guarantors please!

stressedofdevon

I have a rental property which has just become vacant and am lucky with many applicants to choose from. The young couple who have made a very good first impression and are in best position to move in immediately unfortunately have just told me they have CCJ's which they cleared three years ago by paying the debt. They have offered up a parent as guarantor. Background is that through a very close friend I understand that the family are of good standing and reputation.

The question is, how would a more experienced landlord advise me to proceed? The way I see it, the guarantor seems squeaky clean and the tenants themselves have cash and want to move in straight away, so maybe it is okay to proceed with this let and maybe take out an insurance to cover any possible default. Who would anyone recommend for this type of policy and how long does it take to arrange. My partner feels that as we are lucky enough to have some savings that a policy is unnecessary, but I am worried about legal expenses as much as anything should there be a problem.

The alternative is just to go back to scratch with one of the other applicants, but they all are moving up the rental property ladder and need to give one month notice to the current landlord, being nice sort of people just the sort you would want as your tenants. But that leaves me with a vacant month, which I would of course prefer not to have.

What would you do?

Also, I have the Guarantor forms from Landlordzone, but wonder whether anyone has experience of legally enforcing one of these to collect a debt from a guarantor. I have never before had a problem so don't really know anything about what can or does go wrong.

Thanks everyone in advance!

Tassotti

Avoid!!avoid!!avoid!!!!!

Let someone into your property who has no blemishes on their record!!!!

It may be another 2 weeks/month and you may have to pay the mortgage for a month, but it is much better than geting a bad tenant and lose a years rent!!! It happens..believe me.

There will be many more tenants who can pay every month without question, and no more worries on that front.

Make sure you do all necessary checks...You can also get rent guarantee through various companies.

If you do a check, this couple will fail due to the CCJ...

You say you have many applicants...get the right one and it will work out...

Get the wrong one, and it could cost you thousands...

Incisor

Hmm. Do the credit checks. At first sight they have been honest with you, so it is a problem which they acknowledge and have dealt with. At least they are not running away from the issue. The converse side to Tassotti's 'Avoid' is that any of the others could have similar unacknowledged problems - or could be renting to run away from a developing situation - or could be financially naive and about to start having problems. I am not saying these people good, others bad, just trying to mention some of the things which stack up on the other side when you come to take a balance.

taffam

That is a bit harsh to say avoid avoid avoid. Not everyone is perfect and at least they were honest and you know they are good people. If every landlord wanted tenants with perfect credit there would be a lot of empty houses in the UK.

It is a tenants Market at the moment so do what you think is right or you could be left paying the mortgage for several more months if you are delaying decisions

Just my opinion being a tenant with a bit of bad credit history. I rented for 3 years the same property and never defaulted

Premier_2

If, as you say, the guarantor fully meets your credit criteria, then you will be ok if the proposed tenant meets all your other criteria.

As the CCJ of the proposed tenant was settled 3 years ago by them and they have acknowledged this blemish on their credit profile in advance, it appears they are working hard to overcome their past errors.

In the event the proposed tenant does end up owing you money, you have the option of pursuing the guarantor too, effectively doubling your chances of recovering any debt

tbs624

taffam wrote: »

That is a bit harsh to say avoid avoid avoid. Not everyone is perfect and at least they were honest and you know they are good people. If every landlord wanted tenants with perfect credit there would be a lot of empty houses in the UK.

It is a tenants Market at the moment so do what you think is right or you could be left paying the mortgage for several more months if you are delaying decisions

Read again

stressedofdevon wrote: »

I have a rental property which has just become vacant and am lucky with many applicants to choose from.

Decent properties in the right area at the right rent will always attract plenty of applicants

taffam wrote: »

Just my opinion being a tenant with a bit of bad credit history. I rented for 3 years the same property and never defaulted

Good to hear personal experiences but a LL has to balance all these things out because the fact is that it 's better to have a couple of months' void (particularly where as in the OP's case they do have a contingency savings fund) than have the wrong tenants who may stop paying after month two or are likely to be persistently late with the rent for the whole of the tenancy.

Incisor's point is a valid one IMO though - making a broad generalisation that anyone without a CCJ on their record will definitely make a good tenant, while one who has them won't, is a bit like saying that anyone who doesn't have points on their driving licence is a good driver who doesn't/won't ever speed or commit other traffic offences. Unfortunately it's these things that are used as markers where insurances etc are concerned - some LLs prefer to have rent guarantee insurances in place and any tenant has to be able to be "approved".

People tend only to be honest about CCJs because they know that these will show up on credit checks mad, and they will lose the costs of the credit check fees if they haven't declared everything. Some LLs can and will take on tenants with this sort of financial history, but others just cannot afford to.

taffam

I do understand where you are coming from, I guess I was just trying to make a point that not everyone with a bit of adverse history should not be tarnished with the 'can't trust you' brush. 3 years is a long time and people do sometimes learn from their mistakes, but end up paying the consequences for 6 years, or more.

silvercar

Credit check the guarantor, if the guarantor has a good credit rating (and if a property owner, even better) then I would say they should be OK.

stressedofdevon

Hello everyone and thank you for all your advice. Having slept on it I am willing to give this young couple a chance. I have had an honest chat with them and they are prepared to bear the cost of referencing the guarantor and a policy to cover default which I have found via other threads on here, JBI insurance at £131.00. Can anyone see any problem with this, or recommend a better insurance policy.

This has really made me think, as I have only ever taken squeaky clean tenants, and I will be joining NLA very shortly as feel I need to know more. The other people who were interested were all very sweet but were just starting out with new babies and things and I did feel there was potential for any one of them to have gotten in a mess with a bigger house, more rent and bills and new responsibilities, and like others pointed out at least these guys were honest enough to declare their CCJ's.

Fingers crossed now that it all works out as I have spent £20k on a refurb of this house and it is beautiful, so I hope someone lives there very happily.

tbs624

stressedofdevon wrote: »

...... I will be joining NLA very shortly as feel I need to know more...

:T If only more newbie LLs would do that......

Tassotti

stressedofdevon wrote: »

Hello everyone and thank you for all your advice. Having slept on it I am willing to give this young couple a chance. I have had an honest chat with them and they are prepared to bear the cost of referencing the guarantor and a policy to cover default which I have found via other threads on here, JBI insurance at £131.00. Can anyone see any problem with this, or recommend a better insurance policy.

This has really made me think, as I have only ever taken squeaky clean tenants, and I will be joining NLA very shortly as feel I need to know more. The other people who were interested were all very sweet but were just starting out with new babies and things and I did feel there was potential for any one of them to have gotten in a mess with a bigger house, more rent and bills and new responsibilities, and like others pointed out at least these guys were honest enough to declare their CCJ's.

Fingers crossed now that it all works out as I have spent £20k on a refurb of this house and it is beautiful, so I hope someone lives there very happily.

I am surprised that you can get rent guarantee insurance when the couple have a CCJ.

I take it the £131 is for 12 months...I use Rentguard and they are about £50 for 6 months.

I hope it works out well for you...This way, you have 2 guarantees...If the tenants stop paying, then guarantor. If no success there, then insurance.

Hopefully you won't need it and it will all work out well.