Should I be a guarantor?

Grumlethegoat

I'm in an awkward situation. My mid twenties daughter, who has always house shared and never been in arrears (as far as I know) has decided she wants to rent a flat on her own. She is currently doing a PGC and gets a bursary and a student loan but won't be officially working until next September. She says she can afford the flat at £625 p.m. and wants to sign up for 12 months (not incl bills) but needs a guarantor. I want to agree to it (which I have done a few times already) but not for that amount of money. If she gets in arrears, I can't afford that kind of money. We don't have debts apart from our mortgage but don't want to end up with a bad credit rating because of something out of my hands. I feel bad because she is my daughter and I don't want to let her down.

BitterAndTwisted

If you can't afford to pay for the whole of the rent for the entire time she's renting this place (which could end up a lot longer than the initial 12 months) then don't act as guarantor.

Why is she unwilling to house-share? £625 a month is a lot of rent!

bristol_pilot

£625 is a lot of rent for an established professional, never mind a student. Living alone is very very expensive compared with a houseshare, she may not realise this. I doubt she can afford it and you will end up paying. If you are happy with that, why not just pay her rent for her anyway as a gift? If not, leave well alone. If she was financially secure the LL would not have asked for a guarantor. Never mind 'bad credit rating' - you could end up with a charge on your property or even lose it.

zzzLazyDaisy

Don't sign up as a guarantor unless you are willing to do this on an open ended agreement. Once you are a guarantor you can't change your mind, you are stuck with it for as long as she remains in the property.

I'm with the others £625 is a lot of rent for a student. She propably also has no idea about the costs of gas, electricity, water, TV licence, phone line, internet, insurance ... and that's before she gets to eating and socialising. When my son got his first house he got into difficulties with his gas bill because he grossly underestimated the cost of heating a house through the winter... and he'd lived independently in flats for 15 years, so he was used to budgeting, he just underestimated the expense of heating a house.

She is going to take on a 12 month commitment - if she finds she can't afford it, she can't just move out to somewhere cheaper, she (or rather you) will be stuck with the rent until the 12 months is up.

Personally I wouldn't do it. At her age, and at her stage of her education, a place of her own is a 'want' not a 'need'.

Hammyman

Grumlethegoat wrote: »

If she gets in arrears, I can't afford that kind of money. We don't have debts apart from our mortgage but don't want to end up with a bad credit rating because of something out of my hands.

Then the answer is simple - no.

theartfullodger

Indeed.

Landlords like Guarantees: Why? Well, they are a blank cheque that is almost impossible to cancel once you've signed it...

FATBALLZ

Only do it if you're happy to pay all her rent for as long as her tenancy exists. For most sensible non-millionaires that means NO NO NO.

DVardysShadow

theartfullodger wrote: »

Guarantees .... are a blank cheque that is almost impossible to cancel once you've signed it...

FATBALLZ wrote: »

Only do it if you're happy to pay all her rent for as long as her tenancy exists.

Sensible thing to do is to put a limit on it. The worst that can happen is that the guarantee is not accepted.

As Artful says, it is a blank cheque. I think the sooner potential guarantors put their feet down and insist on a limit to the guarantee, the healthier it will be for the rental market. The open ended guarantee effectively encourages the Landlord to be neglectful of his tenant's omissions.

zzzLazyDaisy

DVardysShadow wrote: »

The open ended guarantee effectively encourages the Landlord to be neglectful of his tenant's omissions.

I second this.

Mt cousin stood as guarantor for her bf. She understood that it was for the intial 6 month term and did not take legal advice before signing the agreement.

She thought it was safe because his rent is paid in full by LHA. Anyway 3 months into the initial 6 month AST he stopped paying the rent and started spending the LHA money. Once he is two months in arrears the LL can apply to the council to have the LHA paid direct to him, and can also apply to the court for eviction under S8 (they have 'asked him to leave' but he has refused).

The LL has done neither of these things, but has informed my cousin that she is now responsible for the rent. Mean while he is merrily spending the money given to him by the state for his rent.

I had thought, as a lawyer, that at the very least the LL has a duty to mitigate his loss... that's basic contract law... but an MSE'r with knowledge of property law kindly pointed me in the direction of case law which suggests that this isn't so when a guarantor agreement is in place. So she's stuffed. She has in fact since lost her job and if the worst happens she could go bankrupt over this.

All for trying to help someone who she trusted not to let her down.

Please... if you can't afford to pay her rent for her... don't do it.

Emmzi

her rent will be more than my mortgage and I'm an old old lady who just moved house, not a young thing who shouldn't be taking on massive commitments!

best she learns early to cut her cloth to suit her purse. If she has that much spare each month (200? 300?) she could be saving it towards a) the deposit on her nice flat when she finishes or b) emergencies, like if her job falls through (sad to say it's happening a bit these days)

You won't be doing her a favour in the long run, if you g'tee it.

missile

No one bankrolled me when I went to uni and there were no student loans. I had two part time jobs and would never have dreampt of asking my parents. I knew they could not afford it. Did your parents offer to be guarantor for you?

Do not let your DD blackmail you into this. Simply tell her you cannot afford to bankroll her. She is doing a Post Graduate Course? I would suggest it is time she learned to stand on her own two feet.