About Us [email protected] Telephone 01522 338204
Guarantors
Student Articles

Guarantors

Written by Sam | May 3, 2018

What are guarantors?

A guarantor is a person/people who if all else fails will cover your rent.

This sounds daunting I know, but if for someone reason, you don’t get student finance and have zero money to pay rent. It falls on them to pay it! It’s a way the landlord makes sure they still get money in to pay the bills. These happen in extreme circumstances though, you can (if agreed) with your landlord agree a payment plan or pay your rent when your student finance comes in, etc. Most are flexible as long as it’s paid. BE AWARE, if you don’t pay your rent for 2 months you leave yourself open to being evicted from the property.

Your landlord can ultimately take legal action to recover any unpaid rent from your guarantor.

Why do we need them?

We’ve sort of explained this above, but essentially they are there as a last resort to pay your outstanding rent if you cannot! They need to have a good credit score and be able to pick up your monthly bill if you can’t for any reason. They must also be a resident within the U.K

Who are they?

Usually they are your parents/ guardian or trusted person who sign the agreement to say that they will be a guarantor.

As you go through life, you will get a credit rating, these normally come with credit cards and direct debits. Sometimes you can get phone contracts and mortgages using your credit check as long as you have a good score! If you have a bad score, it becomes very HARD to get any sort of financing!

Your landlord may want to check that your guarantor is able to pay the rent in the same way that they’ve checked your ability to pay. For example, by carrying out a credit check.

There is a legal requirement for a guarantee agreement to be in writing. The agreement sets out the guarantor’s legal obligations.

What is a guarantor liable for?

It depends on what the agreement says. In many cases, a guarantee agreement also extends to other conditions under the tenancy, for example, any damage caused to the property.

If an agreement does extend to other conditions of the tenancy, then it’s best that the guarantor checks the tenancy agreement. This way they can see exactly what obligations they are guaranteeing.

When does the guarantor’s liability end?

This depends on what the guarantee agreement says and/or what is agreed verbally.

Many guarantee agreements are open-ended and will refer to liability ‘under this tenancy/agreement’. This means that liability could extend beyond the fixed term, to any extension, as well as to certain variations such as rent increases.

If this is the case, the guarantor’s liability may continue for as long as the tenancy exists and will only end if the tenancy is legally ended by:

  • service of a valid notice to quit by the tenant, or
  • by mutual surrender of the tenancy between the landlord and tenant, or
  • a possession order from the court.

It may be possible to argue that an open-ended guarantor agreement is not enforceable, but a court would have to decide this.

A variation in the tenancy agreement

A variation in the tenancy agreement could bring the guarantor’s liability to an end. For example, a change to the rent or a renewal of the tenancy would count as a variation unless:

  • the agreement said that the guarantee applies to any future variations or renewals, or
  • the guarantor consents to the variation

What if it seems unfair on the guarantor?

If a guarantee agreement is in a standard form (in your agreement) rather than one that has been negotiated individually, it may be possible to challenge a standard term if it is considered unfair.

A term may be unfair if it creates a ‘significant imbalance’ between the parties to the agreement. If a term is held to be unfair then it cannot be relied on and has no effect in law. This means that if your agreement relies too much on your guarantor, for instance, if they say the guarantor has to pay an extra 10k on top of the rent owed. That would be classed as unfair. This is just an extreme version of events, however you need to check whats in your agreement.

You can refer a possible unfair contract term to the local authority’s Trading Standards Officer, or find further advice online.

Can’t Provide a Guarantor as a Student?

Finding a suitable guarantor is not always possible especially for international students or professionals as they may not know any UK residents, especially ones who is prepared to take on the responsibility! This often means landlords request 6-12 months rent upfront which is a challenge most will find impossible, especially with ever-increasing rental costs. There are some sites out there where you can find guarantors online, however, there is likely to be a charge, or you can talk to the letting agent and they will be able to give you a solution or a way around that they use. Each agent/accommodation will have their own way of dealing with it and have practices in place, you just need to ask.

Get creative if you can’t provide a guarantor and see the ways we have seen used before to beat the system!

Discover. Trust. Review.