risks of being a guarantor

heavenly_heaven

a friend of mine is trying to get a new place to rent, having found one, she has asked me to be a guarantor. iwill like to know what are the entire risks i face and will ther be a credir checkon me and if i agree can i be just for year. thanks for you replies.

PasturesNew

Yes there would be a credit check - and you'd have to pass it.
A lot will have certain criteria about how much you earn to be able to be a guarantor, also age can be an issue (e.g. approaching retirement, earning £10k/year, probably not acceptable).

When you sign as a guarantor you are guaranteeing to pay that person's rent for as long as they are in the place, which could be years. If they turned out to be a rogue tenant, who stops paying rent and trashes the place before being evicted, the cost of all that damage could come back at you.

If you fall out with her in 2-3 months' time, she could stop paying the rent out of spite, knowing you'd be picking up the bill.

You can't opt in for just a fixed period (although it's worth asking the agent), they're looking for a guarantor for as long as the tenant is living there.

david29dpo

Whats your friend like with money?

diable

Make excuses, don't do it as lots of friendships are lost over money.

theartfullodger

If the deed of Guarantee is drafted correctly it's like signing a blank cheque with absolutely no limit. Seriously, worse that lending them, say, £5k... with no prospect of them ever paying you back.

I take it your "friend" hasn't written you a cast-iron-stand-up-in-court document saying if you have to pay out ££ on the guarantee she will repay you?? Nope, thought not... (Apologies for being blunt but guarantees could, ultimately, bankrupt people..)

However some say (see landlordzone
http://www.landlordzone.co.uk/forums/showthread.php?t=31554
)
suggest the writing of these guarantees is fraught with difficulties & in my experience most letting agents don't understand those difficulties.

But signing then gambling that the guarantee won't stand up in court is a somewhat risky strategy...

Cheers!

Artful

FATBALLZ

Don't do it, you are basically giving an unlimited guarantee of paying your friends rent for them indefinitely. Although I suspect if you got proper legal advice should the worst happen you could probably put some limit on it. The only person anyone should ever consider being guarantor for is their children - and only really while they are a student - since you'll probably be the one paying the rent anyway and it's a fixed term letting, and even then be highly sceptical, and avoid it if at all possible.

theartfullodger

FATBALLZ wrote: »

Although I suspect if you got proper legal advice should the worst happen you could probably put some limit on it.

- don't think you can limit a guarantee like that, & if you did any sensible LL/Agent would ask themselves why you were doing it, then rent to someone else..

The only person anyone should ever consider being guarantor for is their children - and only really while they are a student - since you'll probably be the one paying the rent anyway and it's a fixed term letting, and even then be highly sceptical, and avoid it if at all possible.

.. err, yes, but that doesn't mean the student will leave at the end of the fixed-term...


Cheers!


Artful

BitterAndTwisted

If your friend is in desperate need, you are certain that they can handle their money sensibly, you can afford it and that you would be repaid you would be much better off giving them a loan for their rent in advance. At least then, should anything bad happen to your friend or your relationship you will only have lost a finite sum.

FATBALLZ

theartfullodger wrote: »

- don't think you can limit a guarantee like that, & if you did any sensible LL/Agent would ask themselves why you were doing it, then rent to someone else..

I didn't mean to tell the landlord up front, I mean if the friend stops paying the rent, I'm fairly sure I've read that being held to an unlimited liability over an unlimited amount of time in this way could be argued to be an unfair contract term, so once you start getting chased for rent you could probably do something about it. But I don't intend ever having to find out if that's correct, and I don't recommend anyone else does either

slopemaster

FATBALLZ wrote: »

, I'm fairly sure I've read that being held to an unlimited liability over an unlimited amount of time in this way could be argued to be an unfair contract term,

Surely it wouldn't BE a contract as there's no consideration - ie the guarantor is not getting anything in return.
so it would be a deed or something, not a contract???

I'm not a legal expert tho', and i agree with everyone else, it's risky...

FATBALLZ

slopemaster wrote: »

Surely it wouldn't BE a contract as there's no consideration - ie the guarantor is not getting anything in return.
so it would be a deed or something, not a contract???

I'm not a legal expert tho', and i agree with everyone else, it's risky...

Yeah you may be right , I don't know whether 'contract' is the correct legal term and whether it was used in the bit I read, but I think the issue was that you have unlimited liability of an unlimited period of time, with no power to end the 'contract' or deed or whatever it is. I don't know much about this aspect of law but certainly it seems a nonsense to me to be able to sign up to an unlimited liability for the rest of your life, and the law is usually quite sensible so I can imagine there's probably some way out of it.