Guarentor Capital not counted as enough

ConfusedTenant

Hi there, I wonder if someone can help me. I am in the process of applying for a property to rent, in which a credit check and referencing was required. It came back I required a guarentor, which I was able to provide.

My guarentor owns several morgage free properties, has a lot (over 100k) of capital in cash aswell as in stocks and shares. He also runs his own business, which he hasnt been taking a wage for and instead putting it all back into the business.

The referencing agency have said hes not a sufficient guarentor because he has no 'regular income', and they do not count his capital or property (even if owned outright) when calculating how suitable he is for a guarentor.

I have paid for this credit check and referencing because I was sure I would get it, considering I had a guarentor lined up who is more than suitable. I didnt ever expect them to not count capital or assets when calculating how suitable a guarentor would be. Because of this it means I couldnt even have a lottery winner as my guarentor, because they have no regular income and the money they are sitting on counts for nothing.

Can anyone help guide me in this situation? have the referencing agency been fair enough not counting capital? is there any laws to help me in this situation? I have had to pay for the referencing fee and the accountant cost for my guarentor to have his business figures and personal capital figures put forward to this agency and dont want to just give up to face the same problem elsewhere.

Thanks in advance

ConfusedTenant

Also to add, the referencing agency dislosed full income and financial data of my guarentor to the letting agent I was dealing with and she then dislosed that to me. In there terms and conditions it states that they will not dislose any information to a third party without my prior agreement.

Does the estate agent count as a third party? is there anyone who knows what the law on this would be?

Thrugelmir

Highly successful business person and has no income? Simply doesn't add up. Particularly as unmortgaged properties would be generating a sizable rental income alone.

CLAPTON

the guarantor is required to pay your rent at the contractual level if you default

so it is reasonable they must have sufficient income to do this

from what you say their income is modest and have insufficient income for this purpose

if you did stop paying would you expect your guarantor to sell a property?

ConfusedTenant

Thanks for the replies.

No my guarentor has 100k plus sat in his bank account, aswell as two propeties one of which he lives in, the other is a holiday home. So yes he does have the means to pay for the rent if I dont.

He doesnt need to take a wage from his business because he has enough money and instead is putting all money the business makes back into investing to make it grow.

He has shown proof of the 100k he has in his bank, and the bank balance of his business which is also substantial.

HB58

The whole point of the referencing agency is to obtain the information and pass it on to the letting agency/landlord. I don't see that can be classed as a breach of data protection?

ConfusedTenant

I thought the referencing agency would make a decision and pass that onto the letting agency, not faxing our full credit history, fiancial details and my guarantors FULL accounts for his business etc to the letting agency and landlord.

Infact it says on their website they do not dislose any of the information they aquire onto third parties, so I felt secure it was only the referencing agency who would see this. Feel a little violated!

FireWyrm

Ok, so your guarantor allegedly has £100K in his bank account? This is all well and good but there is no practical way for the agency to determine this for sure. Their only way of deciding whether he has the money to pay in the situation where you cannot is by checking his cash flow. For most of us, that means a wage each month which can be proved. This mythical £100K in the bank is just that, mythical. He can't prove it to their satisfaction and they can't get any real evidence of it. To all intents and purposes therefore, it doesnt exist, which is what they told you.

ConfusedTenant

Thanks for your reply. Gosh not looking good!

So a bank statement isnt sufficient enough evidence of the money sitting there? and effectivly a person who has won the lottery is unable to be guarantor but someone who works in McD's can?

There is no guarentee that someone who works will pay rent as a guarantor either, so this doesnt make any sense to me. They could quit there job tomorrow and can also spend there wages as they wish. I 'as a landlord' would be more inclined to have a tenant who has managed to save that much money over a mcd's worker. Is this just me who doesnt see the sense in it?

His cash flow is as existant as much as a wage, with money being transferred to his personal account as and when required.

ConfusedTenant

I am sorry, my phone keeps correcting my spelling of Guarantor as Guarentor?!!

missile

I would suggest they are looking for guarantor with a regular income, to which they could if necessary obtain an arrestment order against. It would be more difficult for them to seize his assets.

It would appear your guarantor has not declared his income properly. He must be drawing some income from his business or elsewhere. What does he live on? £100,000 in the bank, may seem like a lot of money but he could not live on the interest and if he is drawing down capital it would not last long.

Being a guarantor is an onerous responsibility and not one I would undertake.

I would suggest you look for a.n.other LL/ EA who will be more amenable