Being a guarantor for a family memeber for a rented flat

joanna_johnson

Hi
If you do decide to go ahead and act as a guarantor you are legally responsible for the rent if the tenants are unable or unwilling to pay. Tenancy Agreements are 'joint and several' so if you decide only to guarantor one of the tenants and for what ever reason, the other half of the rent is unpaid then as a guarantor, you will be held responsible for the other half (assuming that the first tenant is unable to pay).
Another point to note is that most tenancy agreements are for 6 months and then become 'periodic' or 'rollover' agreements. When you sign as a guarantor it is for the 'fixed term' only (the initial term of the agreement, be it 6 or 12 months or longer). Once this fixed term has come to an end and the tenants enter into a periodic agreement or enter into a new fixed term agreement then you are no longer responsible for rental payments if the tenants do not pay.
The exception to this is if a rental agent/landlord has included into the guarantor agreement a clause to say along the lines of ....' the guarantor shall remain in place when the tenancy becomes periodic'.
Most landlords will be happy with a periodic as it saves agency renewal fees and offers more flexibility should they require their property back but they can only use the original guarantor for the initial fixed term agreement unless a provision is made in the original agreement or if the guarantor is willing to sign a new agreement.

Hope this gives an insight into some of the complications with tenancy agreements and guarantor requirements. It's a risky business and before signing anything you should take legal advice from a TENANCY/HOUSING solicitor.

Good Luck!

SirDag

Hmmm, Students, bankrupt and CCJ's says immature financial management. Why o why would an agent even consider them when in all probability, they will default on the rent. After all, they have a history of not honouring their financial commitments.

You are right to be concerned. You cannot afford to pay their rent when called upon, or cost of damage for that matter, so don't do it, don't jeopardise your own efforts to be financially secure.

Primrose2004

that's interesting Joanna, i'd have been more inclined to be ok with just guarantoring (is that a word?!) a 6 month period but I don't know if that is the case for this agent.

BIL/gf have replied and said they understand but wished we'd said sooner, but we didn't actually ever say yes, just that we might consider it. It wasn't until I got the agreement and spoke on here that I realised how much of a committment it was. And before i knew about the BR and CCJ's which was the biggest reason I was not at all keen. When speaking to my oh (it's his brother who is br) he wasn't sure how much of a big deal br or CCJ's are. A very big deal if they're expecting us to back them up financially and a huge indicated that it might be a very bad decision to be guarantor!!

To answer a few Q's BIL/GF are living with her mum, not ideal but that's not my problem really. They could also live with his Dad but they want a place of their own which is fair enough but I can't fund it.

I do feel for BIL/GF, they only really have us to ask but it's not my responsibility. I would give them a room if they were homeless, would feed them but I can't do this.

tbs624

joanna_johnson wrote: »

Hi
If you do decide to go ahead and act as a guarantor you are legally responsible for the rent if the tenants are unable or unwilling to pay. Tenancy Agreements are 'joint and several' so if you decide only to guarantor one of the tenants and for what ever reason, the other half of the rent is unpaid then as a guarantor, you will be held responsible for the other half (assuming that the first tenant is unable to pay).

Not *all* tenancy agreements have J&SL - house sharers can have individual contracts

A guarantor agreement should be executed as a deed and the guarantor should have seen a copy of the tenancy agreement before signing up. G may be able to wriggle otherwise.

SirDag

tbs624 wrote: »

A guarantor agreement should be executed as a deed and the guarantor should have seen a copy of the tenancy agreement before signing up. G may be able to wriggle otherwise.

Hi TBS,

A fuller explanation as to why a guarantee agreement should be executed as a deed would be gratefully appreciated.

tbs624

SirDag wrote: »

Hi TBS,

A fuller explanation as to why a guarantee agreement should be executed as a deed would be gratefully appreciated.

Unless executed as a deed it is possible that the guarantee could be declared void due to lack of "consideration" between LL and G.

Essence of contract law - must be an offer, an acceptance, intention to create a contractual/legal relationship. Intent is shown by part performance, "consideration" or by use of deed.

SirDag

tbs624 wrote: »

Unless executed as a deed it is possible that the guarantee could be declared void due to lack of "consideration" between LL and G.

Essence of contract law - must be an offer, an acceptance, intention to create a contractual/legal relationship. Intent is shown by part performance, "consideration" or by use of deed.

Thanks for the explanation.

MobileSaver

Primrose2004 wrote: »

said they understand but wished we'd said sooner

To which the answer is "We'd have said no sooner if you'd told us you were BR sooner!" Talk about omitting a material fact!

Primrose2004 wrote: »

but they want a place of their own which is fair enough but I can't fund it

You've absolutely done the right thing here OP and you shouldn't feel at all guilty about it. As Clutton said earlier, BR has consequences and this is one of them - they need to accept that there are certain compromises they will need to make with their lives until the BR has run its course.

amber24_2

When my daughter was in her first year at uni, she and friends signed up for a house in the January for the following September and were all asked to supply guarantors. The week after my husband signed we were sent a letter from the university saying that all the agencies would ask for guarantors, but as the students are over 18 they don't actually have to provide one.

No idea if this is true or not!

Jowo_2

amber24 wrote: »

When my daughter was in her first year at uni, she and friends signed up for a house in the January for the following September and were all asked to supply guarantors. The week after my husband signed we were sent a letter from the university saying that all the agencies would ask for guarantors, but as the students are over 18 they don't actually have to provide one.

No idea if this is true or not!

Well, tenants don't HAVE to provide a guarantor and then again, landlords don't HAVE to offer a tenancy to a tenant that won't provide one.

Generally landlords and their agents demand that riskier groups of tenants provide guarantors, such as benefit claimants, those with poor credit records and students.

They often make it a condition of offering a tenancy as its one of the few ways to almost eradicate the risk of rent arrears and damage, far greater protection than a deposit offers.