Parent or relative acting as joint tenant to meet criteria

[olly330]

Interesting situation. Been referencing a couple over a few days, he is ok and would pass referencing. She has an iva so would fail. Hence I wouldn't get offered rent guarantee insurance which I want.

Rent is 695, he earns 21840 not really sure if that salary would suffice, I thought it was salary 40 which would be 27800.

They have suggested adding a family member who works to the joint tenancy (one of his parents) so that it meets the salary criteria and referencing passes.

In reality though it will be the couple living there and not one I the names on the tenancy agreement. Should I even consider this? Would it invalidate the buildings insurance? Do the names on the tenancy agreement have to be living at the address?

[jpkeates]

They wouldn't be tenants, so the tenancy would be a fiction.
It wouldn't be the end of the world (don't show this bit to any lawyers!) because quite often one joint tenant moves out of a joint tenancy and the agreement isn't terminated.
So it happens.

The problem is that it's useless just when you need it to be helpful.
If everything goes pear shaped and you need to pursue the non-resident tenant, they'll (possibly) decline to pay and, if you want to sue them, you're hardly starting from a firm position legally.

Either use the family member as a guarantor, ask for some month's rent in advance, a larger deposit or say no.

If the combined salary is enough (after debt repayment obligations) I might chance it with a guarantor for a six month fixed term - but it depends on how the IVA arose and whether it was volunteered when viewing etc.
After 6 momths you'd have a feel for how the rent is coming in.

[Lawcruncher]

The tenancy would be valid. There are though three possible snags:

The first is that should the tenants in occupation ever need to claim benefit there may be a problem if the non-occupying tenant can pay the rent.

The second is that the non-occupying tenant, if ever asked to pay, argues that they did not realise the full import of what they were doing.

The third is that when the fixed term ends the non-occupying tenant can end any periodic tenancy by notice to quit leaving just the two occupying tenants in occupation without the quasi-guarantee of the non-occupying tenant.

[olly330]

Thankyou, very detailed and useful replies.

I'm not sure if this is a good idea overall then as it seems the non resident tenant would probably not provide the security I am seeking to achieve.

I am thinking if the figures stack up to put him alone on the tenancy. His income is 21480, and rent 695, I think to some ratios that's just about acceptable.

However he does pay child maintenance of around 230 monthly.

To this I am not factoring in the half rent payment that that his partner who has the iva will contribute to him ,but as she wouldn't be a legal tenant I guess she could not be relied upon to pay him.

He does have savings, I could possibly ask him for 6 months upfront...

[olly330]

Also, in regards to the iva. I wasn't volunteered, when they phoned I asked them if they had any issues with a credit check or CCJ, didn't specifically mention iva, they said no. They gave me bank statements and I picked up on a payment to a debt agency to which they then explained it. I guess technically they I didn't ask them if they had a iva, but in reality they it's obvious what I'm getting at when I ask if they have ok credit and any ccjs

[jpkeates]

I'd be suspicious of someone with an IVA that didn't flag it up when it was obvious I was about to do a credit check.

I'd try and find some other tenants.

[DPT57]

Two other issues I could foresee would be that 1) you could effectively be defrauding an insurance company, who would be issuing rent guarantee insurance based on a false premise and 2) The three of them would turn the property into an HMO so if your Council has a selective licensing policy and asked to see the tenancy agreement, they could force you to get a licence.

However, as others have said, if the tenants have lied (by omission) its a non starter.