Guarantor and Universal Credit

Grizebeck

do not do this!!!

Titus_Wadd

I was a guarantor for my late sister, thankfully only for the first 6 months of the tenancy.  She paid the first 4 months but then I paid for months 5 and 6 as her guarantor.  She failed to pay the next few months before doing a flit to another country.  She had problems and gave me her jewellery in lieu of the rent I had to pay but at the start of the tenancy I wanted to trust her to pay her way, she was working and on benefits.  There's no way of knowing the reality of the risk you're accepting as a guarantor but you must be aware that you will be the easier person for the landlord and letting agent to chase for payment.  Go into the role with your eyes open.  Certainly don't be a guarantor if the prospect of covering the rent, even for a short period, would put you in financial difficulties i.e. difficulties meeting your own usual monthly outgoings. 

lookbook

Short answer  - I wouldn't do it.

doodling

Hi,

There are two things that I would insist on in a guarantor agreement:

1. The landlord tells the guarantor as soon he is aware of something which may result in payment under the guarantee (e.g. non payment of rent, rent being late by more than a month, the landlord becomes aware of damage to the property, etc.).

2. That the landlord will take all reasonable steps to terminate the tenancy and evict the tenant at the guarantors request, providing the guarantors liability under the guarantee has exceeded £x in the last year.  (The value of £x depends of the size of the guarantors pocket and the size of the rent but might be, say, £3-5k.  The proviso is protection for the tenant so that the guarantor can't say that they broke a toilet brush and therefore the guarantor is getting the landlord to evict them).

Without those two things, the landlord could let the tenant pay no rent at all for 5 years and then just send the guarantor the bill, or could tell you the tenant is not paying rent and expect you to cover it, potentially forever, without them evicting the tenant.

Personally I think these two requirements should be inserted into all residential AST guarantor agreements by law.

Note that even with these two things in the agreement, the guarantors liability to the landlord remains unlimited.  If you wanted, you could also ask for a limit to your liability of (say) 20x the monthly rent but I suspect the landlord might not like that.

letom

As everyone has said this is a terrible idea.

Agree with the post above, it would only make a tiny bit of sense if you could limit your liability but then again that's less useful for a landlord (so they may reject it- I would). She could stop paying rent on day 1 and then you're tied into paying her rent in perpetuity without the ability to evict or get out.

You may have the best intentions at heart for your daughter and your now friend but you also have a duty of care to your current family to not make financial decisions that have the ability to bankrupt you.

Myci85

I think it's very good of you to be considering doing this, not least because presumably your own child is almost an adult now. 

Depending on your financial situation, could you lend her the money to pay 6 months rent up front with the agreement she would then go into a periodic tenancy? Worth checking if that is something the landlord would agree to. If so she could then pay you the rent each month up to the end of the 6 month contract, and then start paying it direct to the landlord? 

MEM62

Grecian123 said:

She has told me I would never be called on because she is getting £3,500 per month. 

I would suggest that every guarantor that has been called upon to pay up was at one time or another told exactly the same thing.  

Remember, as the guarantor, once on the hook you are never off it.  Potentially, if she never pays the rent again and the landlord chooses not to evict her you would be liable to pay for as long as she stays.  

Advice in short - do not do it.  

ian1246

Grecian123 said:

elsien said:

Yes, they split up for a reason but that does not mean she’s a feckless wastrel who is going to spend all her benefits on lord knows what instead of the rent.
The OP is aware that there is a risk but let’s not go down the whole benefits stigmatisation route.  

Exactly this. She is a brilliant mum and unfortunately also has a child that has a disability that requires care.

We split 16 years ago, but have remained friends throughout. My fiancée is also friends with her. She got married (I went to the wedding) and started a new family. Then the child with the disability was born and meant she was unable to work. Sadly their marriage broke down, but her soon to be ex husband doesn’t earn enough to be guarantor.

She has rented for the past 16 years and never missed a payment. Just because she gets benefits it doesn’t mean she is terrible with money, it is just what life with a disabled child comes too.

Yes, I could say my daughter should come and live with me (only round the corner), but would hate to see her mum not be able to have a roof over her head, especially with the care required. My daughter is also a big influence to her sisters care too. I don’t want to split that all up.

My mini rant over

If your trust in her is as as strong as your implying in this post, why the need to create this topic asking about the £1800 UC limit rather than take her at face value? 

I'd also note I didn't once questioned her ability at motherhood or question her character due to benefits other than to note there will be no obligation by her to pay (housing benefit goes to her as cash in the bank, not directly to her landlord) if she so chooses & you could then be liable for all her debts & landlord costs until eviction. I didn't say she would - just that she can.

Ultimately its your decision - just be aware of the potential implications if the worst happens. Mental health, gambling addictions, drink, drugs, medical emergencies, new partner etc.... - life is fluid and things can happen & change very quickly, impacting her ability or willingness to pay rent.

Out of curiosity though - what support are the council providing with regards to housing? You mentioned the ex-husband to be - where was she & kids living before? is there any reason why she is having to look for a property rather than stay in existing family home/rental if she's going to be the main carer for disabled child?

Again - not a criticism, but those answers could be relevant to what support she may be entitled to for a "roof over her head" or even whether she'll still get the £3600 a month (I.e. is ex-husband likely to argue he's main carer & therefore eligible for the UC etc...?).

Lots of potential factors which could be relevant...

i.e. any capital from marital home sale may impact benefit entitlement & therefore income, if fleeing Domedtic Violence, would make her a priority for re-housing from council. Etc... etc...

lookbook

Myci85 said:

I think it's very good of you to be considering doing this, not least because presumably your own child is almost an adult now. 

Depending on your financial situation, could you lend her the money to pay 6 months rent up front with the agreement she would then go into a periodic tenancy? Worth checking if that is something the landlord would agree to. If so she could then pay you the rent each month up to the end of the 6 month contract, and then start paying it direct to the landlord? 

That's a good idea.