To be a guarantor

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    To be a guarantor

    Hi All, I had some good news this afternoon,( I think). My son text me from Uni, (he is in his 1st year.) to say that he and 5 others have found and applied for a six bedroom house for next year. He said the agent will probably be in touch as I'm down as Guarantor.
    I've had guarantors for flats that I have let out before, these have been arranged by my agent ,part of tenant find, but I'm a bit nervous as I'm no a fait with the details.
    What should I look out for please?
    Regards

    #2
    Are you also guaranteeing son's five mates?

    That's not such good news.

    FTA: I may be old fashioned, but isn't it awfully early to be renting somewhere for next year? Presumably he only started at end of Sept?

    Comment


      #3
      Things have moved on since this afternoon! Apparently they have lost the house, they were pipped to the post, so the search goes on. It does seem early to be looking, we were told to expect Jan/Feb, but the places are being listed on Rightmove.
      Thanks JKO, that will be something to look out for. I guess as a guarantor, I could be liable for shared/communal areas or at least a sixth of the cost

      Comment


        #4
        Oh, well even Jan/Feb sounds early to me. Suppose son does not like the course, and wants to quit? Then, worst comes to worst, you'll be paying a year's rent for an empty room.

        Comment


          #5
          Students start looking around this time. There is a possibility of someone quitting before next year but the students who are looking to houseshare have decided what they want to do and as you can see from the fast pace as described above - good houses go quickly and are in demand. The benefit of this system is that the existing tenants are not disturbed with viewings if the next year's let is decided early.

          Comment


            #6
            Originally posted by Hollywood View Post
            I guess as a guarantor, I could be liable for shared/communal areas or at least a sixth of the cost
            Not unless you have it written into the agreement. In a joint tenancy your Son could also be liable for the whole rent if the others default.

            Comment


              #7
              Update; Son & friends found another suitable house just before end of semester. I have just received email from agent directing me to what looks like a referencing and guarantor portal called 'Vouch'. Anyone heard of them?

              Comment


                #8
                No, but it seems to me that Parent Guarantors of student tenants are generally caught between a rock and a hard place when it comes to their obligations. Either they agree to guarantee not only their own offspring's debts, but also those of other people they have probably never even met, or they risk their son or daughter losing the property and worrying that they will end up on a park bench. I have had to sign such agreements myself for my own children,(but I have only done so in the knowledge that they were so full of holes they wouldn't last 5 minutes if ever produced in court).

                Such contracts are lazy, ridiculous, unnecessary and unfair. If landlords and letting agents had any sense, they would use an ethical Guarantor Agreement which makes each G liable only for their own offspring's rent obligation and tenancy-related debts. How can you justify pursuing anyone other than the defaulting T or his/her G for his/her debts? More and more parents are (rightly) objecting to being liable for every Tom Dick and Harry in the property. I've been using a Guarantor-friendly agreement for ten years now and it's very popular.

                Our student house is always let by October/November for the following year, by the way.
                'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

                Comment


                  #9
                  I don't see how you can construct a guarantor friendly agreement that limits the guarantor's liability in a meaningful way.
                  If the person who is being "guaranteed" is a joint tenant, their personal liability and the entire liability are identical.

                  Given that most guarantee agreements for students are enforced by leverage than by a court, it's probably academic, though.
                  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


                    #10
                    Originally posted by jpkeates View Post
                    I don't see how you can construct a guarantor friendly agreement that limits the guarantor's liability in a meaningful way.
                    How about this:

                    THIS DOCUMENT IMPOSES POTENTIALLY ONEROUS OBLIGATIONS. YOU ARE ADVISED TO TAKE LEGAL ADVICE BEFORE SIGNING IT.

                    A Deed of Guarantee dated 2019

                    1. Parties

                    1.1 The Guarantor: [insert name and address of guarantor]

                    1.2 The Landlord: [insert name and address of landlord]

                    2. Definitions and Interpretation

                    In this deed:

                    2.1 “the Tenants” means [insert names of all the tenants]

                    2.2 “the Nominated Tenant” means [insert name of the tenant whose obligations the guarantor is guaranteeing]

                    2.3 “the Tenancy Agreement” means an agreement dated the same day as this deed and completed immediately before it made between the Landlord (1) and the Tenants (2) relating to [insert address of property]

                    2.4 “the Rent” means the rent reserved by the Tenancy Agreement

                    2.5 “the Tenants' Obligations” means the obligations imposed on the Tenants by the Tenancy Agreement

                    2.6 “damages” includes any liabilities, awards of damages, losses, compensation, penalties, costs, disbursements and expenses resulting from any claim, demand, actions or proceedings

                    2.7 “the Relevant Proportion of damages” means such proportion of damages arising from any breach of the Tenants' Obligations as it is equitable the Nominated Tenant should pay having regard to the extent of his/her responsibility disregarding the joint and several liability of the Nominated Tenant under the Tenancy Agreement

                    2.8 “the Guarantee” means the guarantee given by clause 4

                    2.9 Where a party consists of more than one person any covenant given is given jointly and severally

                    3. Background

                    The Tenancy Agreement was entered into on the basis that the Guarantor would guarantee the payment of the Rent and the performance of the Tenant's Obligations but limited as provided in clause 5.2

                    4.Guarantee

                    The Guarantor covenants with the Landlord that the Tenants will pay the Rent and observe and perform the Tenants' Obligations and if the Tenants fail to do so the Guarantor will pay the Rent and observe the Tenants' Obligations in respect of which the Tenants are in default and make good to the landlord on demand and indemnify the Landlord against all damages arising from such non-payment non-observance or non-performance

                    5. Extent of Guarantee

                    The Guarantor and the Landlord agree as follows:

                    5.1 The Guarantee continues even if:

                    5.1.1 the terms of the Tenancy Agreement are varied so long as they are not varied in any way which materially prejudices the Guarantor

                    5.1.2 the Nominated Tenant does not continue with his/her course of study at [insert name of uni] for whatever reason

                    5.1.3 the Landlord grants any time or indulgence to the Tenants by neglecting or forbearing to enforce payment of the Rent or the observance and performance of the Tenants' Obligations

                    5.2 As between the Guarantor and the Landlord (that is to say for the purposes of this deed only and so as not to prejudice the right of the Landlord to claim against the Nominated Tenant on the basis that each of the Tenants is jointly and severally liable to pay the Rent and observe and perform the Tenants' Obligations)

                    5.2.1 the Rent shall be deemed to have been paid if and so long as the Nominated Tenant pays to the Landlord one [insert relevant fraction e.g. if there are five tenants 'fifth'] of the Rent from time to time due; and,

                    5.2.2 the Relevant Proportion of damages shall be deemed to have been paid if and so long as the Nominated Tenant pays to the Landlord the Relevant Proportion of damages from time to time due.

                    6. Acknowledgement

                    6.1 The Guarantor acknowledges that he has been afforded sufficient opportunity to read the Tenancy Agreement or a draft of it before executing this deed.

                    6.2 The Landlord warrants that the Tenancy Agreement is in substantially the same form as any draft of it supplied to the Guarantor and to the extent that it is not the changes were drawn to the Guarantor's attention in writing before the Guarantor executed this deed.

                    7. Deed

                    This instrument is executed by the parties as a deed.

                    Signed as a deed by
                    [insert name of guarantor]
                    in the presence of:

                    Witness signature
                    Witness name
                    Witness address

                    Signed as a deed by
                    [insert name of landlord]
                    in the presence of:

                    Witness signature
                    Witness name
                    Witness address

                    Comment


                      #11
                      Is there a "joint venture" concept, in civil law, regarding what is equitable? Otherwise I don't see how you can establish even balance of probability liability if the responsible people don't own up.

                      Comment


                        #12
                        Originally posted by leaseholder64 View Post
                        Is there a "joint venture" concept, in civil law, regarding what is equitable? Otherwise I don't see how you can establish even balance of probability liability if the responsible people don't own up.
                        I think you are making it more complicated than it is.

                        Each individual's liability is the appropriate fraction of the whole.

                        In the first instance, as tenants, they are jointly liable. But it is a rare student joint tenancy where the rent is paid jointly. In a six bedroom property, each tenant pays one sixth into the LL's bank account. If anyone defaults, you talk that individual in the first instance, (not to the others who have paid their share of the rent).

                        Liabilty (in this six bed let) is limited to one sixth of the total rent or damages, so as long as an individual has paid 'their' one sixth, they or technically, their G) cannot be pursued for any more.

                        'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

                        Comment


                          #13
                          I'm not thinking of rent, where the liability is obvious; I'm thinking of damage. In criminal law, joint enterprise is used when everyone is somewhat culpable, but only one person did the really heinous thing. Without it, they could all cast reasonable doubt as to the primary offender, making a beyond reasonable doubt verdict impossible.

                          With joint liability,you don't have to worry who did the actual damage, without it, they could all lie and you would not be able to establish, even on the balance of probabilities that one did it.

                          Comment


                            #14
                            I am in the process of suing a particular guarantor for rental arrears, damage, cleaning of rubbish, and also certain legal costs the total amount is over 6,000 as well as tracing fees. The agent specifically drew up the AST making the guarantor responsible for legal costs. arrears and a host of other things - this was signed at the agents and witnessed - beware -
                            I would be very wary of this and dont do it
                            my own son got a room in a house when he was a student on a student let we didnt need a guarantor he was not asked for it - do not do this

                            Comment


                              #15
                              Originally posted by leaseholder64 View Post
                              I'm not thinking of rent, where the liability is obvious; I'm thinking of damage. In criminal law, joint enterprise is used when everyone is somewhat culpable, but only one person did the really heinous thing. Without it, they could all cast reasonable doubt as to the primary offender, making a beyond reasonable doubt verdict impossible.

                              With joint liability,you don't have to worry who did the actual damage, without it, they could all lie and you would not be able to establish, even on the balance of probabilities that one did it.
                              The form of guarantee set out above sets out to deal with the problem by saying that in the event of damage for which the tenants are reponsible the guarantor is ony liable to cover to the extent that the particular tenant he is guaranteeing is reponsible. It also confirms that the joint and several liability of the tenants under the tenancy is not affected.

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