Rent Guarantee Insurance

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  • Delectable1
    replied
    Interesting to see posts saying RGI not worthwhile.
    I'm renting out my flat in London so the market is mostly people here to work for a while. Having a UK homeowner guarantor would help but this is the second set who've only been in the country a couple of years and no strong ties other than work.

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  • AndrewDod
    replied
    Originally posted by jpkeates View Post
    As far as I can tell, the main function of a guarantor agreement is to apply moral force to the guarantor and tenant.
    The basic requirement is a deed, because a contract can always be challenged.
    I suppose you could have a long-term (many years) agreement with a guarantor, with mutual break clauses - but obviously that carries its own problems. But otherwise I agree.

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  • jpkeates
    replied
    As far as I can tell, the main function of a guarantor agreement is to apply moral force to the guarantor and tenant.
    The basic requirement is a deed, because a contract can always be challenged.

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  • theartfullodger
    replied
    In deed....

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  • tatemono
    replied
    Originally posted by jpkeates View Post
    I think you must be mistaken.
    Yes, you're right. I'd seen it on the OpenRent one and thought it was the govt one I'd seen it on.

    Originally posted by jpkeates View Post
    If you include the guarantor as a party on the tenancy agreement it can only create complication.
    In this case, what's the best way to include a guarantor? A deed?

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  • jpkeates
    replied
    Originally posted by AndrewDod View Post
    Yes. Although if the person who would have been the guarantor is listed as an actual tenant on the AST that might sometimes solve certain problems (that guarantor agreements are not generally useful after fixed terms etc.).
    Agree with that.
    But then the "guarantor" would be part of the Tenant and not a separate concept.

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  • AndrewDod
    replied
    Originally posted by jpkeates View Post
    If you include the guarantor as a party on the tenancy agreement it can only create complication.
    Yes. Although if the person who would have been the guarantor is listed as an actual tenant on the AST that might sometimes solve certain problems (that guarantor agreements are not generally useful after fixed terms etc.).

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  • jpkeates
    replied
    Originally posted by tatemono View Post
    If I'm not mistaken, that clause is from the govt's own model AST. If so, is it robust?
    I think you must be mistaken.

    If you include the guarantor as a party on the tenancy agreement it can only create complication.

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  • AndrewDod
    replied
    Originally posted by tatemono View Post
    If I'm not mistaken, that clause is from the govt's own model AST. If so, is it robust?
    It is in the openrent agreement - I haven't seen those words anywhere else.

    I would doubt very much it is in the governments model agreement (a quick googling did not show that it is), but they did put a load of un-usable stuff in there so would not be totally surprised. Many terms in tenancy agreements are not enforceable and its appearance in an agreement produced by the government does not make those terms any more so.

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  • tatemono
    replied
    Originally posted by AndrewDod View Post

    No 7.1 will not likely stand up in court. You cannot have open ended guarantor deeds that apply in this way robustly.
    If I'm not mistaken, that clause is from the govt's own model AST. If so, is it robust?

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  • AndrewDod
    replied
    Originally posted by theartfullodger View Post
    I've never wasted my time or money on RGI
    Indeed - the OP nicely summarises some of the reasons RG insurance is pretty much a waste of time - or worse because it makes people feel comfortable about selecting tenants who should not (referencing regardless) be selected in a million years.

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  • theartfullodger
    replied
    I've never wasted my time or money on RGI

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  • landlord-man
    replied
    Just completed our first Tenancy using OpenRent and their Tenant Referencing.

    The Referencing flagged up that I would not qualify for Rent Guarantee Insurance (currently paused anyway) unless the Deposit was equal to 1 months rent.

    So, on a 6 month AST, I collect 1 months rent plus 1 months rent (as deposit) - it doesn't exactly leave much for the Insurance to cover does it - just 4 months of the 6 month Term.

    I didn't bother to read how many other clauses there were - Policy Excess perhaps?

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  • tatemono
    replied
    Originally posted by AndrewDod View Post
    select suitable tenants.
    that's the rent guarantee insurance we use and which has worked for us for many years.

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  • AndrewDod
    replied
    Originally posted by oi2004as View Post
    7.1 In consideration of the Landlord agreeing at the request of the Guarantor to accept the Tenant as the Tenant of the Premises the Guarantor agrees to fully cover and compensate the Landlord for any loss, damage, costs or other expenses arising either directly or indirectly out of any breach of the agreement or any extension of continuation of the tenancy including any rental increase agreed between the Landlord and the Tenant.
    No 7.1 will not likely stand up in court. You cannot have open ended guarantor deeds that apply in this way robustly.

    The fact that you have said that it will apply also to unknown rental increases, for an unknown term, and covers unknown costs means that it is likely invalid

    And as artful indicates, there are many ways guarantor agreements fail -- was this
    signed in a solicitor's office with all parties present
    signed as a deed
    with all parties showing proof of ID to the solicitor
    and the guarantor stating that he understood the agreement and it's implications and the AST having been given ample opportunity to study the terms and obtain legal advice

    or was it sent off by an agent to a guarantor for witnessing using their chosen witnesses and posted back with some or other signature -- in which case you might as well chuck it in the bin.

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