How will being a Guarantor affect me?

JoeBloggs12345

I have a very good credit score, and have been renting for the past 5 years. Never missed a rent payment, or any other bills etc.

My sister wants to get her own place (renting) but needs a Guarantor, as her credit rating isn't good. I'm more than happy to do this, as I 100% trust her not to get into arrears, and even if something happened and she was unable to pay the rent, my grandfather is more than happy to help with payments that may fall to me, so this is not an issue (he can't be her Guarantor due to his age and he doesn't work, but has lots of money!).

What I'm worried about is that I'm looking to move in the next few months to a bigger house, still renting. Will me being a Guarantor affect any applications to rent myself in the future?

I don't want to let my sister down as she has been saving to move out for a long time, but I can't put myself in a position where I would be unable to apply for a new rental property due to being a Guarantor.

Any advice would be welcome.

Marktheshark

You need the deed reading by a Solicitor and it is well worth the costs, it should be negotiated to limit your liability to the initial rental period only to prevent them just leaving the house empty and you paying rent for every more until the end of time.

JoeBloggs12345

We are going to the Estate Agents together later today. I am going to be asking about how long I would have to act as Guarantor for, I believe her rental agreement will be for 6 months initially, and then if she wants to resign she can. Is it possible to only Guarantor her for the initial 6 month contract period?

G_M

I don't believe your guarator Deed will be recorded on your credit file, or elsewhere, so is unlikely to come to the attention of your new landlord/agent unless you tell them.

Of course, you should take the potential cost of being a guarantor into acount when assessing your own ability to pay your new rent.

You could theoretically be paying your sister's full ret as well as your own.

Whether you yourself would be ana cceptable guatanot to your sister's LL will be down to your income, outgoings and credit history.

G_M

JoeBloggs12345 wrote: »

We are going to the Estate Agents together later today. I am going to be asking about how long I would have to act as Guarantor for, I believe her rental agreement will be for 6 months initially, and then if she wants to resign she can. Is it possible to only Guarantor her for the initial 6 month contract period?

Most guarantor agreements remain valid for as long as the tenancy continues. Your sister may sign a 6 month AST, but in many cases tenants renew, or move to a SPT (periodic) and the tenancy, and guarantee agreement, continue.

TrickyDicky101

Do not take the EA's word for anything when it comes to the guarantee agreement (deed).

Let's just repeat that as it is important:

Do not take the EA's word for anything when it comes to the guarantee agreement (deed).

Take Marktheshark's advice and get it checked over by a solicitor and ask his/her advice on how to limit it to the duration of the initial rental period.

eddddy

More broadly, a guarantor agreement would typically make you jointly liable for whatever the tenant is liable for in the AST.

So you (and the tenant) should read the AST carefully. An obvious example is damage to the property.

And if your sister decides to rent jointly with someone else, your sister may well have have joint and several liability in the AST. So effectively you would be guaranteeing her housemate's rent as well as hers.

TBagpuss

If your grandfather is willing to help and has funds available, an alternative option might be foe him to lend your sister enough for her to offer a larger deposit / payment of 6 months rent in advance, to avoid the need for a guarantor. She could then repay your grandfather over 6 months instead of paying rent each month, and when she came to renew she will be 6 months further along the line, with a track record as a good tenant.

If that is not an option, then as MarkTheShark says, don't take the agents word for anything, and make sure you get proper, paid-for legal advice before signing anything

moneyistooshorttomention

TBagpuss wrote: »

If your grandfather is willing to help and has funds available, an alternative option might be foe him to lend your sister enough for her to offer a larger deposit / payment of 6 months rent in advance, to avoid the need for a guarantor. She could then repay your grandfather over 6 months instead of paying rent each month, and when she came to renew she will be 6 months further along the line, with a track record as a good tenant.

Much the best option imo.

I'm now wondering what age and state of health your grandfather has....just in case the guarantor needed to be called on and granddad wasn't around to be a fallback person.

Best for him to be it in the first place (in that indirect sort of way).