Asked to be student's guarantor - advice please...

Ed_Jogg

OK, deep breath, this'll be a long one...

Yesterday I phoned the University and the Letting Agent to try and get some clarity on the matter.

First up I contacted the "Student Support Officer for Off-Campus Accommodation". She is in the same situation as me -- being guarantor for her daughter in a shared house. Apparently "this is the way things are done" and is quite common. She consulted the legal adviser the university provide for students and was told she could try getting the LA to modify the form to say she was only liable for her own daughter's rent and asking them to write it into the agreement, but that this was unlikely to succeed. I was also told that of the LA's that they deal with, this one tended to be involved in the fewest issues.

Next I contacted the LA. They deal with a lot of student lettings and manage over 200 properties. They have full-time staff to cover this business (so they know what they're doing!). The student lettings person was very helpful. Again, she has been in the same position, and said she had "gone white as a sheet" when first asked to be a guarantor! Also she confirmed that this 'jointly and severally' scenario was 'the norm' and although scary, was actually not as much of a risk as it sounds.

Apparently, each student is responsible for paying their rent direct to the landlord. If they miss a payment by seven days, the LL can serve them notice if they still fail to pay, take them to court to claim the payment and if this fails the student will have a County Court Judgement raised against them. After this, the LL can pursue the guarantor for the payment. If the guarantor refuses to pay, the LL can go to court again to apply for another CCJ, this time against the guarantor. Only after this could the LL attempt to pursue the other guarantors for the money -- the defaulting guarantor would have to 'disappear off the face of the earth' before this was likely. (Apparently this is most likely to happen with foreign students, although they are supposed to provide a UK-based guarantor.) In the seven years they have been dealing with such agreements, it has only got this far three times.

The new deposit protection schemes are also regarded as a major step forward. The university told me that if the LA/LL didn't supply details of the deposit scheme they were using within 14 days of receiving it, we could reclaim it and three months' rent! Also the scheme prevents the students from using the deposit as their final month's rent, but equally the LL cannot withhold the deposit without good reason and has to go through some hoops to get agreement on what payment might be retained.

The LA had been very impressed with my son's collection of students. Apparently they had complied with all the requests quickly and she doesn't anticipate any particular problems. It will be very good "life experience" for my son since, as 'lead tenant', he is the point of contact for dealing with the deposit and the LL. Fortunately she said that this LL was very good, and letting to students was his income, so it was in his interest to keep everything happy.

I asked why the Tenancy Agreement did not mention that the house was an HMO (House of Multiple Occupancy). Apparently, this was taken as a 'given' for any similar-sized house, the penalties for not complying with the regulations being extremely severe.

Regarding insurance, accidental damage insurance is not needed but it's up to the students to decide whether they think it's needed or not. The feeling was that insurers would be very happy to quote for this, at a price!! It was suggested that I should contact my insurer to see whether my contents cover could be extended on an umbrella basis to cover the other property too. Student properties are often targeted as each occupant is likely to have a laptop and they are known for being lax at securing the property.

So, what's the outcome? Well, I have little choice in the matter but to go ahead and sign as requested. There is a strong tendency with something like this to look on the bleak side, but I have done what I can to set my mind at rest, and there are no real practical alternative paths to take. I must say I am surprised that this has not been questioned before on the forums, and it would seem to be a potential topic for further investigation by Martin or similar.

Phew. Sorry for the weight [sic], but I hope this clarifies the situation a little for everyone.

silvercar

So, what's the outcome? Well, I have little choice in the matter but to go ahead and sign as requested. There is a strong tendency with something like this to look on the bleak side, but I have done what I can to set my mind at rest, and there are no real practical alternative paths to take.

Totally agree with you. We did the same sort of investigation and came to the same sort of conclusion - if you want your child to have the opportunity to rent a half decent property with a properly registered / managed LL /LA this is the only option. Without a guarantor the student is only going to be able to rent stuff let by the less honest LL or some "well dodgy place" that no-one wants.

jillymit

Thanks for the update Ed Jogg.
The latest news with us......long, sorry.:o

I had my meeting with a solicitor and he advised us not to sign (for the entire months rent) if at all possible but did concede that it is generally the norm and in his own words 'taking off his lawyer hat and putting on his parent one' he would probably sign it.

He was very interested in an email sent to us by the LL assuring us that this agreement was to cover just our sons part of the rent and further advised us to include a covering letter referencing this email and quoting this reassurance as this may be in our favour and taken into account if push comes to shove and we end up in court one day.

Later we received another email from the LL stating that they had received queries from two other parents regarding the agreement and again reassuring us that they were only asking for us to guarantee our sons share of the rent (despite the full amount being on the actual agreement) and how they were all above board, accredited to the city council and giving us the name of the scheme that will hold the deposit, blah blah blah.

I replied that in that case could we amend the agreement to read £300 (our sons share) rather than £1500.:D
They have agreed to this so we have changed this on the agreement, have signed both the amendment and the whole document and had our witness sign in both places as well. :beer:
I still wonder how a student would manage if they have no one to act as their guarantor.

kiss_me_now9

donquine wrote: »

When I went to uni and was house hunting, every landlord seemed to want parents to sign as guarantors. You may find that in certain university towns, this is the norm and refusing to be a guarantor means your child has no option but to live in halls. Of course, it may be relatively uncommon in other towns. Your child should be able to confirm by speaking to other friends who are house hunting.

Not only this, but also that your son may not be able to return to university halls.

When I was looking to rent in my second year, one of the girls had an awful relationship with her mother and didn't speak to her father. The letting agents would only accept a parent or legal guardian as the guarantor; the uni could not provide her with accommodation due to a !!!! up the year before; leaving her in an awful position. I think in the end she convinced her Mum to sign but it took a good few tense months of her thinking she'd have nowhere to live.

You seem to have it sorted now so that's a bit unrelated but I'm sure your son is more than responsible enough to understand what is required of him money wise now.

G_M

Thanks jilly,
I think this goes to show that if you persevere, then T&Cs can often be amended - in this case relating to the extent of guarantor liability but also in relation to, for example length of tie-in to EA's sole agency agreements for selling properties, which comes up often on the forum.

eileenfromplaistow

I am not a lawyer (and I too have signed as guarantor for my daughter when she was at university), but it occurs to me to wonder that, if the guarantor did get taken all the way to court for more than their own liability, would a judge/magistrate not consider it an unfair term?

N79

eileenfromplaistow wrote: »

I am not a lawyer (and I too have signed as guarantor for my daughter when she was at university), but it occurs to me to wonder that, if the guarantor did get taken all the way to court for more than their own liability, would a judge/magistrate not consider it an unfair term?

No because it is not a contract. However, the court will not hold guarantor liable for more than the value of the guarantee they have given.

Ed_Jogg

N79 wrote: »

...the court will not hold guarantor liable for more than the value of the guarantee they have given.

But the guarantee is to cover the rent (which is quantifiable), AND any other liabilities, on a 'jointly and severally' basis (which is not).

So there is no limit to the value guaranteed -- that is why it's so scary!:eek:

MissMoneypenny

silvercar wrote: »

Totally agree with you. We did the same sort of investigation and came to the same sort of conclusion - if you want your child to have the opportunity to rent a half decent property with a properly registered / managed LL /LA this is the only option. Without a guarantor the student is only going to be able to rent stuff let by the less honest LL or some "well dodgy place" that no-one wants.

Perhaps you should add that you are a landlord silvercar?

I never signed for any of my daughter's or son's student houses (total of 5 houses in 3 different areas). None of the houses were "some "well dodgy place" that no-one wants"

N79

Ed_Jogg wrote: »

But the guarantee is to cover the rent (which is quantifiable), AND any other liabilities, on a 'jointly and severally' basis (which is not).

So there is no limit to the value guaranteed -- that is why it's so scary!:eek:

That will depend on the guarantee. Most are open ended in terms of cost and time but they do not have to be.

My answer of no was to the question of whether unfair contract terms would apply to the guarantee. The answer is no because the guarantee is not a contract (although the unfair terms legislation does, of course, apply to the tenancy agreeement).