To Guarantor or not?

Rocketdogroya

My step son who is 32 and married with 2 kids, rents his home. He has for years and says he doesn't miss payments etc. Both he and his wife work but are not really above the breadline as he sometimes 'borrows' £20-40, but he doesn't expect this back.

 His landlord is now selling the house and none of the local estate agents will rent without a 'homeowner' guarantor. He has asked his dad if he will do this as we own our house.

I am disabled and can't work anymore and my OH is nearing retirement and is worried that if something were to happen to him my home would then be at risk as that was the collateral?

I am also worried that the precedent of not paying his dad back has instilled a lack of accountability in him that 'bank of dad' will pay.

We are only just off the breadline ourselves and it has taken a lot of belt tightening to become debt free.

Thank you.

user1977

The house isn't directly collateral (in the sense that a mortgage would be). The landlord would be first pursuing a "normal" claim for money against your husband.

One way of looking at it - would your husband expect to be bailing out his son (without a guarantee) if he got into financial trouble?

"none of the local estate agents will rent without a 'homeowner' guarantor" - what about properties which aren't being marketed via the local estate agents?

doodling

Hi,

Everything in your post suggests that your OH is not the right person to guarantee your step son's rent.

You won't lose your house but if your step son doesn't pay then your OH may end up with a substantial debt which the landlord could pursue through the courts (think CCJ, bailiffs, etc.).  If you have no other way of paying and you jointly own the house then one outcome of the court process could be a restriction on the house title which would need to be dealt with when your house was eventually sold.

My advice would be: Don't do it.

Rocketdogroya

Thank you both.....its a quandary that's for sure!

Debbie9009

I would be concerned by the borrowing money and not paying it back, this could easily escalate into,I don’t have all the money for the rent this month Dad can you help me out, and it doesn’t sound like you have the money to do this.

You also need to consider, what happens if one of them loses their job, would they be able to afford the rent then ? And realistically are you in a position to bail them out.

I do understand that it can be very difficult to say no, but maybe try and remember that your stepson has put you in this position by asking.

Alternatively you could just say you wouldn’t pass guarantor checks maybe implying that you have debts of your own you need to pay.

I would only be a guarantor do if you can both afford to pay their rent, and are happy to do so.

Rocketdogroya

Thank you, I think that what you say is all true.

suelizab

if the landlord is selling he can ask the council for help . they will tell him to stay put and put him on council house list .

diggingdude

It sounds as though you wouldn't be able to afford the rental payments if he stopped paying on top of normal day to day expenses you have. My suggestion therefore would be not to do it 

saajan_12

If a LL accepted son without a guarantor and if son couldn't pay the rent one month, would OH bail him out anyway?
That answer is part of the way towards whether to guarantor or not. 

However that's not all - you also have to consider the human behaviour side.. with a guarantor, would step son think there's more of a safety net and prioritise other bills / spending above rent subconciously, thinking 'dad will cover rent, we son't get evicted'? Would the LL just request the money from the guarantor and not be as on top of evictions if it came to it?

The fact that they've paid rent regularly in the past may not be enough - the LL / LA may be looking for a minimum income to assess affordability. Considering the small £10-20 requests, that may not be unreasonable, as perhaps step son and fam are just making the regular bills, but in the next 6-12 months it could take a small slip to get into rent arrears. They might need to reassess the properties they are looking at and perhaps go to a cheaper area or smaller size. 

theartfullodger

It's a blank cheque.  Beware!  

Stubod

I would not do it, too risky...