Question on being a guarantor on a Student let

Drogmeg

Hi All, quick question that probably has an obvious answer but want to double check.

Im being asked by my son to sign as a guarantor for a student let on a house.  The tenancy is  in all their names (8) and is joint and several.  There are 8 guarantors names on the tenancy agreement.   Ive got my head round signing it and the potential liabilities as it sounds like this is standard in the area and its either do this or they don't get a shared house.  

I've been sent an AdobeSign to sign, so my questions is: Is the contract only valid if ALL 8 quarantors sign it?  I don't want to be the only guarantor to sign it and for it suddenly become a contract with only me as guarantor.  The second question is: If there worst happens and there Landlord comes after me(rather than all the guarantors)for at the money (damages or unpaid rent), can I then sue the other guarantors to split the money I have had to pay?

TIA

Martin

theartfullodger

That all depends on EXACTLY how the guarantees are worded, and if the guarantee is actually enforceable: See for further info...
https://forums.landlordzone.co.uk/forum/residential-letting-questions/73441-tenancy-guarantees

(Apologies for stating obvious but..) If there appears to be something missing from your guarantee - e.g not given enough info or advice for you to take legal advice - then DON'T ask agent/landlord to fix it. You WANT a guarantee with errors that can thus be challenged successfully in court if landlord comes after you.

Best wishes:  Kids eh?

Artful: Landlord , with student houses....

eddddy

Theoretically, you might be the only person who agrees to sign to be a guarantor - but I doubt the agent/landlord would go ahead on that basis.

But anecdotally, I've heard stories of the landlord being happy with having, say, 6 or 7 guarantors - so they don't bother chasing the last one or two.

I've also heard people say that they've successfully negotiated with agents/landlords that their guarantor agreement should only cover non-payment of rent by their own individual son/daughter. (But again, maybe it's because they already have 6 or 7 guarantors already signed up, so they don't care too much about giving different terms to the last one or two.)



Ideally, you might want a separate agreement between tenants and guarantors - saying that if any individual tenant defaults, resulting in another tenant or guarantor having to pay, the 'payer' has the right to claim the money back from the 'defaulter'.

But, for example, if a tenant is unwilling/unable to pay their rent to the landlord, and so you have to pay it - I suspect they will be equally unwilling/unable to repay you.

lookstraightahead

From what I understand, all students need to have a guarantor, but a landlord can come after any guarantor for everyone's money. That's how it seemed to be with my DD.

yes it's standard. And incredibly ridiculous but there's little choice really if your child wants to live a normal student lifestyle (with mates, in a dump, for a lot of money). 

saajan_12

Drogmeg said:

Hi All, quick question that probably has an obvious answer but want to double check.

Im being asked by my son to sign as a guarantor for a student let on a house.  The tenancy is  in all their names (8) and is joint and several.  There are 8 guarantors names on the tenancy agreement.   Ive got my head round signing it and the potential liabilities as it sounds like this is standard in the area and its either do this or they don't get a shared house.  - yup, pretty onerous when the co-tenants don't really know eachother but still take on a huge J&S liability.. and yup, pretty standard..

I've been sent an AdobeSign to sign, so my questions is: Is the contract only valid if ALL 8 quarantors sign it?  I don't want to be the only guarantor to sign it and for it suddenly become a contract with only me as guarantor.  - depends on the wording - please quote and we can help. Often you'll get separate deeds to sign (each guaranteeing the whole amount)
The second question is: If there worst happens and there Landlord comes after me(rather than all the guarantors)for at the money (damages or unpaid rent), can I then sue the other guarantors to split the money I have had to pay? - not automatically from the deed of guarantee (between LL and guarantor).. in that contract there's no concept of different 'shares' of liability. For that you'd need a separate agreement just between the tenants + guarantors, saying each liable X % of rent + Y % of damages (or based on who caused it) + Z% of deposit return. If any tenant / guarantor ends up paying more than their share, whoever paid less is liable to reimburse them. 

TIA

Martin

Its good you're thinking about it. Unfortunately the joint & several liability and extension to guarantors is pretty standard. The main thing I'd advise is to have a written agreement between the tenants & guarantors, so if the LL just chases the easiest one, the guarantors have the legal standing to can sort it out fairly among them. Whether they can recover or not is another matter.. 

user1977

Worth bearing in mind (as it seems to be overlooked in these sorts of discussions) that even if you leave the guarantees to one side, your son is signing up to be jointly and severally liable with his co-tenants. Does he understand the implications of that?

dimbo61

Did you receive a copy of the Tenancy Agreement, addendum, deed of guarantor, EPC, GSC, EICR, Right to Rent leaflet, Deposit information?
Can you check the Landlord is a Fit and Proper person by checking if the house has a HMO licence ? Available on Council HMO website.
Did the students notice any Fire safety !
Mains wired interlinked smoke alarms, fire doors, emergency lighting and windows locks/escape windows. Turn locks, Security cameras and lighting ? CCTV ?

A_Lert

Read the small print. But yes, it's normal that all guarantors are liable for any and all unpaid rent or indeed damage to the property. Jim can quit paying his rent and Bob can set fire to the bedroom and the landlord can decide to chase Paul's guarantor for the money just because.

youth_leader

My daughter was at Leeds Uni and shared a house with 8 others, I didn't even check the small print when I signed as her guarantor. But I've just signed for her rented property in NI along with her boyfriend's parents, I'm off to check it now! 

Drogmeg

Thanks all for your really helpful comments.  I'm working my way through the very detailed link from the artfullodger (great name BTW)

I don't think I will have a lot of choice as it seems the other parents seem willing to sign.  The wording all 8 parents are being asked to sign is as follows (numbering got mixed up):

1. The Guarantor agrees to guarantee. (names of students)
   as the Tenant of the Property upon the terms and conditions of the tenancy
   agreement attached (“the Tenancy Agreement”).
   
2. The Guarantor will ensure the compliance of the Tenant with the terms of the Tenancy Agreement and will compensate the Landlord for and keep him indemnified against any rent arrears, loss or damage associated with the possession of the Property by the Tenant or any other person whom the Tenant allows into occupation.
   

1. The guarantee and indemnity created by this Contractual Guarantee will continue notwithstanding any renewal, extension or continuation of the Tenancy whether fixed term or periodic. 
   

1. The Guarantor’s liability will not be discharged by any other variation of the Agreement in relation to the rent level, the parties to the Agreement or any other term provided that the Guarantor is notified of the said variation in writing prior to it being carried out.
   
2. The Guarantor’s liability will not be discharged or limited by any waiver or discharge granted by the Landlord to the Tenant or any other party.
   
3. This Guarantee is irrevocable and shall continue beyond the Guarantor’s death or bankruptcy throughout the period that the Property is occupied by the Tenant or any assignee, sub-Tenant or licensee and is not limited to the period of the initial fixed term as specified in the Tenancy Agreement.
   
4. If the Tenant defaults during the initial Term or any extension, renewal or continuation of the Agreement whether fixed term or periodic the Tenant is declared bankrupt and the Tenant's Trustee in Bankruptcy elects to disclaim the Agreement then on written demand the Guarantor will pay cover and compensate the Landlord for all losses, claims, liabilities, costs legal fees and expenses arising out of or due to that default or disclaimer or incurred by the Landlord due to the default or disclaimer.
   

8. The Guarantor's liability under this Guarantee and the Agreement will be joint and 

several with the Tenant which means that each will be responsible for complying with 

the Tenant’s obligations under the Agreement both as individuals and together until all 

costs are paid in full. The Landlord may seek to enforce these obligations and claim 

damages against the Tenant, the Guarantor, or both of them under the Agreement and the Guarantee. The obligations of the Guarantor will not be cleared or affected by any act, neglect, leniency, or giving of time by the Landlord trying to obtain payment or in the enforcement of the Tenant's covenants. 

1. If the Tenant surrenders any part of the Property with the consent of the Landlord the Guarantor's liability will continue for the part not surrendered. Any liability accumulated at the date of surrender will continue unaffected.
   
2. The Guarantor's liability shall continue if the Guarantor is a company and the company changes ownership, alters the name of the Guarantor, or is amalgamated with any other company or organisation throughout the period that the Property is occupied by the Tenant or any licensee.
   
3. The Guarantor will pay any costs of the Landlord in enforcing this Guarantee and the obligations of the Tenancy Agreement whether or not court proceedings are taken.
   
4. If the Tenant forms more than one person the Guarantee will not be invalidated if one or more of the original persons forming the Tenant to whom the Tenancy is granted abandons the Property or surrenders their interest in the Tenancy provided that at least one of the persons forming the Tenant or their assignees, sub-Tenants or licensees remains in possession.
   
5. References to the singular include the plural and references to the masculine include the feminine.
   
6. The Landlord and the Guarantor agree that the laws of England and Wales shall apply to the Guarantee and to the Tenancy Agreement.
   
7. The Landlord and the Guarantor agree that the Landlord can give the personal information of the Guarantor to any debt collection agency, legal adviser; credit agency or any third party with an interest in collecting any debt outstanding.
   

dimbo61

The few lenders who lend to student HMO borrowers normally insist that Landlords get Parent Guarantors for young students.
Young people don't have any credit history so little point doing credit checks !
There are many rules, laws and regulations covering renting in general and even more for HMO,s  as I have listed above.
Most student receive there Student loans over the student year in 3 installments. 
Take lots of photos when your Son/Daughter moves in and check the property out !
Tenants ( not parents ) should Write/Email the Landlord or Letting Agents if they have any maintenance issues as soon as they arise.
Hopefully your Son will love living with his mates in the student house