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To stand as guarantor

135

Comments

  • teddysmum
    teddysmum Posts: 9,471 Forumite
    First Anniversary Combo Breaker First Post
    The loan guarantee company appears questionable, as their only purpose appears to be paying the landlord (possibly) immediately, as they will recover the money from the guarantor, who is in a worse position than if they had guaranteed directly (extra £300 cost ).


    The only people gaining are the company (fee taken) and the landlord who gets his money; hence his recommendation.


    I wouldn't stand as guarantor for family or anyone else (especially the 'else' who you don't even know). We fell foul of a business guarantee when a partner absconded, leaving one person with liability and know about offspring 'borrowing' with promises to repay,too.
  • jamesmorgan
    jamesmorgan Posts: 402 Forumite
    First Anniversary Name Dropper First Post
    In many university towns it is virtually impossible to get student accommodation without someone agreeing to be a guarantor. However, in many cases the guarantor agreement is issued incorrectly so is virtually worthless. I have agreed to over 10 of these for my children over the past few years. Initially I would insert a clause limiting liability to that of my child's annual rent. More recently I have given up doing this and just relied on the agreement being unenforceable in a court of law. Most student landlords have little idea what they are doing. They have all been advised that they must get a guarantor but have no idea how to do it properly. Very few use any form of legal advice. I wouldn't touch a guarantor agreement for a professional tenancy, but student rental is very different.
  • Lord_Baltimore
    Lord_Baltimore Posts: 1,348 Forumite
    My five flat-mates and I would like to thank our guarantor for seeing us through University.
    We don't think we can ever repay you :beer::beer::beer:
    Mornië utulië
  • Lijong
    Lijong Posts: 31 Forumite
    First Anniversary First Post
    Which is great if you can do it. I cant.

    We were told by several landlords and the Uni to use Housing Hands but looking into it further they ask for a co-signer, that co-signer is signing as guarantor.
    So in essence HH pay the LL quickly and pursue the co-signer. They said on Twitter when I asked what they were for .............."co signers don't have to meet the same requirements as a guarantor. e.g. can be from anywhere in the world. Hope this helps"

    I thought, perhaps naively that paying them £300 was a kind of insurance in case he failed to pay rent or damaged the property. What it really is, is a company that pais the LL soon and then comes after the guarantor.

    So still looking into it we're no better off. It's OK to say don't be a guarantor (which I agree with) but what is the alternative. Everyone he's asked if he could pay 3 months rental ahead have said no. He is waiting on a phone call for this house to see if the LL will accept it. The agent doesn't think he will.

    Legally I can't be, I don't know who can be and if this LL declines it I don't know what to do.
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
    Name Dropper First Post Photogenic First Anniversary
    edited 20 June 2017 at 6:47AM
    That's poor that the university advised you to use Helping Hands. I don't see what Helping Hands do, other than relieve you of £300, that's any different to you being a guarantor anyway.

    All your son can really do is look for a property to rent where the landlord doesn't require a guarantor or is going back into halls for a second year an option?

    If I were a parent of the other 2 boys I would advise them against signing a joint tenancy with your son. Being a guarantor for a joint tenancy is daunting enough but I'd want everyone's parents (or another relative) to have their head on the chopping block not just some of us. Unless I knew that the Deed of Guarantee wasn't worth the paper it was written then like jamesmorgan I'd just go with it.
  • silvercar
    silvercar Posts: 46,935 Ambassador
    Academoney Grad Name Dropper Photogenic First Anniversary
    I suspect Helping Hands is of more legitimate use to foreign students, whose parents/ guarantors don't fit the residency requirements to be a guarantor.
    I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, mortgages and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • Mela322
    Mela322 Posts: 149 Forumite
    First Anniversary First Post Combo Breaker
    I'm really surprised how many are dead set against helping their children when they have worked so hard to get into uni. Whatever happened to trusting your own child?
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
    Name Dropper First Post Photogenic First Anniversary
    Mela322 wrote: »
    I'm really surprised how many are dead set against helping their children when they have worked so hard to get into uni. Whatever happened to trusting your own child?

    Because it's not just your child you have to trust with a joint tenancy.
  • Lord_Baltimore
    Lord_Baltimore Posts: 1,348 Forumite
    Pixie5740 wrote: »
    Because it's not just your child you have to trust with a joint tenancy.

    Talking of which Lijong you mentioned your son wants to move in with 2 friends - can either of those provide a guarantor for the tenancy?
    Mornië utulië
  • Lijong
    Lijong Posts: 31 Forumite
    First Anniversary First Post
    He's pleaded with the LL today and they will accept 3 months up-front as a guarantor. They wouldn't do this last week but if they don't they all walk and he doesn't get his house rented. I'd like this situation to have been guarantoring myself but listening to advice it seems not the best thing to do given he covers the other two students rent too. Obviously health and work-wise I can't but this has been months and everyone he's previously asked have declined his up-front offers. This is the 5th house he's seen, no 6th one this year and finally one's allowed him some grace.

    All sorted now, thanks everyone xx
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