Introducing Guarantor concept/clause into contract at renewal

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    Introducing Guarantor concept/clause into contract at renewal

    Hi Everyone
    Longtime lurker and have finally taken the plunge and subscribed. I'm a landlord in Surrey and have always let my flat through a Lettings Agent. I've had some good tenants and a couple of awful ones in the last 13 years. Have been watching all the developments on the Rental Reform Bill closely. My existing tenants have been in my flat for a year and I'm approaching the end of the first year. My understanding is that the tenants would like to continue with the tenancy, they are both in paid employment, have paid on time, have had a full credit reference check completed, and so far have been good tenants, paid every month on time. I'm planning on increasing rent to a midway point between what they currently pay and current market rate but I would also like to insert a clause to say that I would like a guarantor in the event that the tenants can't pay the rent.

    My lettings agent has come back to me with the following:
    "Whilst I appreciate your request of having a guarantor put in place, this is not something that can just be asked from a tenant that has satisfactorily passed referencing without the requirement of a guarantor. Most tenancies do not have a guarantor in place and it is only necessary where the tenants referencing does not meet the criteria required. Your current tenants have always been very accommodating and communicative with us. There has been no issues with any rent payments and always been received on time. Overall they have been great tenants in both the payment aspect and upkeep of the property."

    Whilst the above is true I am aware of tenants who have the ability to pay but simply choose not to pay, and should that happen what then? I've had experience of this before so just want to put some protection in for myself. Please can you share your thoughts/wisdom on what my Lettings Agent has said to me about the concept of introducing a guarantor?
    Many thanks
    79onOrange

    #2
    Why not look at the problem another way....you plan to increase the rent , so you have said to halfway between the existing and current market rent. So how much would it be to change the current letting agent terms, to that of guaranteed rent payment and add that to the cost you were thinking or somewhere in between. That's if the letting agent would allow that. Not sure on the legality or not though of requiring a guarantor, certainly its something We have had and if allowed in the future would continue to insist on. Any default then would be the letting agents problem not yours.

    Comment


      #3
      To be honest it seems a bit strange to look for a third party Guarantor at this stage - what if they don't have one?

      However, the letting agent works for you not them and if that's what you want to ask for, then they should look to facilitate it.

      Comment


        #4
        Have you considered what happens if they say no? Are you prepared to try to throw perfectly good tenants out? If not, you risk ruining your relationship with T for not benefit.

        Perhaps put rent up to actual market value, if they stay all well and good and if they leave get someone else in and insist on a guarantor. Whilst most tenants I find are very understanding about the need for guarantors when their record is not perfect, I think that tenants who are very good on paper may not feel comfortable with it. You might inadvertently narrow your choice and end up compromising on quality of tenant.
        Assume I know nothing.

        Comment


          #5
          You can’t force the tenants to sign a new agreement. They’re perfectly within their rights to simply let the tenancy become periodic. It does seem like an odd thing to do with tenants in-situ who have presumably been paying the rent just fine so far.

          Comment


            #6
            Getting a guarantor on an existing tenancy would be very unusual, and, if I were the tenant, I'd probably be deeply offended.

            Getting a guarantee agreement to the point it's enforceable (as more than just leverage / a threat) is very difficult.

            If you're worried that the tenant might choose not to pay rent, what makes you think that their guarantor would be any different?
            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

            Comment


              #7
              They've proven themselves to be great tenants. You're going to scare them off with this rent increase and guarantor business. Silly.

              Comment

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