What is a Guarantor?

A guarantor is someone who agrees to pay a tenant’s rent if the tenant is unable to do so. This individual, often a family member or close friend of the tenant, provides assurance to the landlord that they will not incur financial losses if the tenant experiences a change in circumstances. Typically, a guarantor covers the full rent amount specified in the tenancy agreement, not just a portion of it if there are multiple tenants.

When Might You Need a Guarantor?

A guarantor becomes essential if there is a possibility that a tenant or co-tenants might struggle to meet their rental obligations during the tenancy. Common scenarios where a guarantor is beneficial include:

• Starting a new job with an uncertain income.
• Having an irregular income or being on a low income.
• Being a student.
• Experiencing any sudden change in financial circumstances.

Landlords may request a guarantor if they have concerns about a tenant’s ability to consistently pay rent. This might be due to a poor credit history or if the tenant has recently moved to the UK from abroad. While not mandatory, having a guarantor can provide landlords with additional security.

Who Can Be a Guarantor?

Suitable guarantors are typically close friends, parents, relatives, or family members of the tenant. However, landlords usually look for guarantors who meet specific criteria, such as:

• Having a good credit history.
• Residing in the UK.
• Owning property.
• Having a regular income or significant savings.

Individuals who are retired or living abroad are generally less likely to be accepted as guarantors. Landlords will conduct a credit check on potential guarantors to ensure their financial reliability.

What Does a Guarantee Cover?

A guarantor agreement specifies the liabilities that the guarantor will cover, which mainly include rent arrears and property damage costs. The agreement will detail:

• The individuals covered (usually all named tenants in the tenancy agreement).
• The duration of the guarantor's liability (often the length of the tenancy, but this can vary).

There is no fixed rule regarding the duration of a guarantor agreement; it depends on the terms agreed upon by all parties involved.

Rights and Responsibilities of Guarantors

A guarantor is responsible for covering any unpaid rent or property damage costs incurred by the tenant during the period specified in the guarantor agreement. It is crucial that guarantors receive copies of both the guarantor agreement and the tenancy agreement before signing. Guarantors should not be coerced or misled into signing the agreement. If the terms of the tenancy change, such as a rent increase, the guarantor agreement is typically invalidated unless the guarantor agrees to the new terms.

Claims against Guarantors

Landlords can make a claim against a guarantor if the tenant fails to pay rent or causes property damage that is not compensated. If the guarantor does not fulfil their obligations, the landlord can seek a county court judgment (CCJ) against both the tenant and the guarantor.

Seeking Assistance from Howards

For further assistance with tenancy matters, including finding a rental property or understanding the role of guarantors, contact your local Howards branch. Start your property search today with Howards and benefit from expert advice and support.

This guide aims to provide clear and precise information on the role of guarantors in the UK rental market, ensuring landlords and tenants are well-informed about their rights and responsibilities.

Summary

• What is a Guarantor? An individual who agrees to pay rent if the tenant fails to do so.
• When Might You Need a Guarantor? When there is uncertainty about the tenant’s ability to pay rent.
• Who Can Be a Guarantor? Close friends, family, or relatives who meet specific financial criteria.
• What Does a Guarantee Cover? Rent arrears and property damage costs.
• Rights and Responsibilities of Guarantors: Cover unpaid rent or damages, must receive and agree to the terms.
• Claims Against Guarantors: Landlords can claim unpaid rent or damages; a CCJ can be sought if the guarantor defaults.

For more detailed advice, contact Howards for expert guidance and support in managing your rental properties and understanding guarantor agreements.