Tenancy guarantor - insurance

Ratkin007

It has already been said and I appreciate it is not the question, but yes the property is indeed a HMO.

3 or more people in 2 or more households sharing bathing or kitchen amenities is an HMO, regardless of whether it is a joint tenancy or individual tenancies.

Also pointed out is why the issue is arising now if this is the 2nd year of being in the house.

Is a change required to the tenancy, i.e is someone moving out? I'm not clued up on the renters rights act, but if there is no change then surely the tenancy does not need to be renewed and continues as before. If not already in place, I don't see how they can request a guarantor now.

Also, (it doesn't sound like it is the case) were the occupants students when they first took the property, because there are certain grounds for which notice can be served. One of which is ground 4A - A HMO is let to full-time students and is required for a new group of students in line with the academic year. Cannot be used if the tenancy was agreed more than 6 months in advance of the tenancy starting.

sheramber

We don't know the other tenants

…………………..

This is the 2nd year she has been in this house. It is in London, so no - she can't afford to rent a whole property on her own, and doesn't have a partner to do this with. Even 1 room of this house is about the same as a whole property in the area we live.

Last year she moved in to the house with 3 girls who all knew each other well from university. She is firm friends with them now yes. So it is not an HMO no.

CAG8

Yes - we were guarantors last year, but we thought we were only guaranteeing for her part. One girl is moving out this year and a new girl moving in. None are or were students when the tenancy started last year - the 3 other girls know each other from Uni (but not in the same city they are living in now). They all had jobs at the time they moved in, but 3 of the 4 had to have guarantors as their earnings were not sufficient apparently (I don't know whether it is OpenRent or the landlord that determines this).

Thanks to all who have answered, but I am going to end this now, as my question was about insurance. We weren't asking advice on whether to act as guarantors or not. There doesn't seem to be any insurance so that answers my query.

silvercar

I've been in this situation. In order to support your own child, you need to hope that they have chosen decent housemates. It's a risk, and it feels more so when others earn enough to not need guarantors. It is something you have to do, so just minimise the risks as much as you can. check the guarantor form, often they aren't written correctly eg don't contain words to say they are executed as a deed. No harm in writing on the guarantor form that you are limiting your liability to the rent arrears of your daughter. I'd also understate your income if you can, you want it to be just sufficient to be a guarantor and not so high it is the landlord's first port of call if there is an issue with one of the other tenants.

saajan_12

https://forums.moneysavingexpert.com/discussion/comment/81986947#Comment_81986947

When we were offered this outrage "guarantor for 4-5 random other familes" by a managing agent. We marked up the agreement to adjust our liability to cover only our student child's share of rent.

So we would not become a patsy for other parents or their delinquent offspring.

And signed the modified one and returned it. The agent clearly got enough back from various parents to feel confident they had cover for the landlord across the whole amount.

That's not how it works - your child's share IS the whole rent as under a joint and several tenancy, each tenant is responsible for the full rent. If no one paid, then the LL could chase your child for the full amount and hence chase you for the full amount.

Now of course the LL may decide its easier to chase all 5 guarantors for 20% each because it'll be more palatable to pay what they feel is their child's share, but that doesn't mean they have to, even with your moditied guarantee.

Chief_of_Staffy

I haven't time to read the replies right now, but hopefully they include the advice "Be extremely careful about being a guarantor for someone you know and trust, and take legal advice on the implications, and under no account whatsoever be a guarantor for someone you don't know."

The reason you can't get insurance for your potential liability is that no company would be reckless enough to take on such a risk. You are the insurance and if things go wrong, you pay.

Contracts vary, from extremely high risk to how-can-this-possibly-be-legal, but the distinction IMO is moot. You could be a guarantor and get away with it, and everything turns out fine. Equally, you could find yourself financially wiped out.

I was asked (again) last year, to be a guarantor by someone I've known for 30 years and who I have no doubt would act in good faith at all times. The contract however, like all I've read, was absurd. I declined. I told him instead to go to the management company and ask to speak to the landlord directly. He said it was pointless because he had to have a guarantor and that was that. I persuaded him to do it; he met the landlord, the landlord looked at his work history and references and offered him the house on the spot. Basically what people did for 500 years without an issue.

Guarantorship should be made illegal. It's an absolute scam and a liability.