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Guarantors - who they are and what they do
This is one of a series of four short guides aimed at young people and students providing information about guarantors. The other three in this series are:
What’s a guarantor?
A guarantor is someone who agrees to be responsible for your rent and your other legal obligations in a tenancy agreement. They may also be responsible for the rent and legal obligations of any co-tenants you share with. So, for example, if you or any of your co-tenants damage the property or don’t pay your rent, your guarantor may have to pay what you owe the landlord.
When will you need a guarantor?
You may find you need a guarantor when you try and rent somewhere to live. The landlord or their agent will tell you if you need one.
Why will you need a guarantor?
Some landlords feel that they need the extra security provided by a guarantor. The security comes from them having someone else they can get to pay what you owe them, if you don’t pay.
It’s quite common for a landlord or agent to ask for a guarantor if you have a low credit score or if you are in a category of tenants that they see as posing a higher risk.
A credit score predicts how likely you are to repay what you borrow. Lenders look at how well you have repaid things like credit card debts or loans in the past and give you a credit score. They use credit scoring to help them decide whether to lend you money. Your credit score also affects your ability to rent property. You can find more information about credit scoring and how to check your own score at How to check your credit report.
Higher risk tenants can include students, people in part-time or low paid jobs, unemployed people, people who claim welfare benefits like universal credit or people who are unable to supply references from previous landlords. They are seen as higher risk because they are perhaps more likely to struggle financially and so be less able to pay their rent.
Who can and can’t be a guarantor?
The landlord (or their agent or the tenant referencing company they use) will usually want a guarantor to be someone who:
- lives in the UK, and
- is over 18 years old, and
- is a home owner, and
- has a steady job that gives them enough income to be able to pay any debts that the tenant owes the landlord.
This is because they want a guarantor who has the means to pay what you owe if you can’t or don’t pay for whatever reason.
You cannot act as a guarantor for yourself and you should not name anyone as a guarantor in any paperwork you complete without asking them first.
Although it’s very common for a guarantor to be a family member, lots of people don’t have anyone in their family who meets the landlord’s requirements to be a guarantor. If you are in this position, please see What are your options if you can’t get a guarantor? for more information to help you.
You may find it difficult to persuade anyone to act as your guarantor unless they can rely on you to stick to your obligations under a tenancy agreement (for example to pay the rent, keep the property in good condition, and not cause a nuisance to the neighbours).
Tenant referencing companies check out potential tenants for landlords. Typically, they will look at your credit history, contact your employer to check that you earn what you say you earn, contact your current landlord to find out whether you’re a good tenant, and check whether the bank details you’ve given the landlord or their agent are genuine. This kind of information helps a landlord decide whether they want to accept you as a tenant.
Will the landlord (or their agent or tenant reference company) check your guarantor’s details?
Almost certainly! You must assume that they will carry out the same tenancy/credit reference checks that they do for you.
So, ignore any suggestions from a ‘friend’ who says something along the lines of ‘Just put your parents’ names down, make up an income and you will be fine’ or even worse, suggests you forge a guarantor’s signature. You must expect the landlord to check any information you provide. If you are caught out, not only are you likely to lose out on the letting, you may also have committed a criminal offence.
What is a guarantee?
A guarantee is a contract in which the guarantor promises the landlord to pay any debt owed to the landlord by the tenant(s).
If the landlord calls on the guarantor to pay the tenant’s debt, the guarantor will have to pay what the tenant owes in the timescale outlined in guarantee. If the guarantee doesn’t give any timescale then the landlord will usually provide the guarantor with details of the debt and demand payment within a specified time, for example, 14 days.
What is a guarantor responsible for?
A guarantor’s legal responsibility (the law calls this ‘liability’) depends on what the guarantee says.
The terms of the guarantee may be set out in a separate agreement or included in a section of the tenancy agreement itself. Sometimes there may just be a brief clause in the tenancy agreement with a separate form for the guarantor to fill in giving their personal and bank details. If there is only very limited or no information about what the guarantor is responsible for, you should ask the landlord or their agent to provide more.
If you rent a property with other people, you are likely to be jointly responsible for their share of the rent and other obligations as well as your own. In this situation, your guarantor is also likely to be responsible for whatever any of you owe the landlord, for example, any unpaid rent, cleaning costs or the cost of repairing damage to the property.
It is very important that a guarantor reads the guarantee carefully so that they understand what they are signing up to. If there’s anything in it the guarantor doesn’t understand, they should get independent legal advice. They may be able to get independent legal advice:
- as one of the benefits of their home or car insurance. Guarantors can check their policy documents to see if this applies to them. Many insurance policies provide access to free legal advice about the law in England and Wales, for example, via a telephone helpline.
- as one of the benefits of trades union membership. If your guarantor is a member of a trades union, they can contact their union to find out what legal advice may be available.
- from their local advice centre or Law Centre. See Advcenow’s Help Directory for more information about where to go for legal advice.
‘The guarantor is only liable if you burn the house down or something like that.’
Not true! Your guarantor is potentially responsible for covering the rent, the cost of putting right any damage to the property you rent and any other costs that the tenancy agreement allows your landlord to charge you (and any co-tenants) if you break the tenancy agreement. If the guarantee makes your guarantor responsible for more than just unpaid rent, it is important that they read the tenancy agreement as well so they know what else they are guaranteeing. (You may hear the tenancy agreement called the ‘primary’ agreement and the guarantee agreement referred to as the ‘secondary’ agreement.)
If you rent a property jointly, for example, with friends or fellow students, you are likely to be jointly liable for the rent for the whole of the property - not just your individual share. If this is the case, the landlord will probably require your guarantor to guarantee all the rent for the whole property, not just your share.
So, for example, suppose you have paid your share of the rent but one of your co-tenants fails to pay theirs, you and/or your guarantor could end up being liable to pay their share for them. Many guarantors are unaware of this and this is why it’s important that your guarantor reads and understands both the tenancy agreement and the guarantee before they agree to act as a guarantor.
Your landlord may take legal action against you and/or your guarantor if you break any of the promises you made in your tenancy agreement. If the guarantor has to pay any money to the landlord on your behalf, they have the right to ask you to repay them and can take court action against you if you don’t.
The start and end of a guarantor's responsibilities
When does a guarantor’s legal responsibility start?
This depends on the wording of the guarantee. If you are sharing a tenancy with other people and each of you has to have a guarantor, you should make sure that the guarantee makes it clear that your guarantor will only become bound by the guarantee from the point when all the co-guarantors have signed up to the guarantees. This to protect your guarantor - without this, they could end up being responsible for all the debts owed by any of the tenants to the landlord.
However, even if you do make sure that the other guarantors have signed up, there is still the possibility that the co-guarantors 'disappear'. A landlord doesn't have to take action against all the guarantors but can chooses to pursue the one(s) that are most likely to pay up. So even if there are other guarantors, yours could find themselves liable for the full amount of any debt.
When does a guarantor’s legal responsibility end?
Again, this depends on the wording of the guarantee. They may continue to be responsible for however long the tenancy lasts and for any rent increases. If this is the case, the guarantor will be legally responsible if you break any of the promises you made in your tenancy agreement before the tenancy ends and will remain liable for a period of six years from the date you break a promise. So, for example, if you fail to pay your last month’s rent, your landlord has 6 years from the date that the rent became due to take action against you and/or your guarantor.
Unless the guarantee provisions say otherwise, a guarantor carries on being legally responsible even if they fall ill or lose their job.
If you are declared bankrupt, your guarantor is likely to remain liable for your legal responsibilities under the tenancy (the extent of the guarantor’s liability will depend on the wording of the guarantee). Depending on the circumstances, if a guarantor is declared bankrupt, the landlord may become a creditor (someone owed money by the guarantor) in the bankruptcy for anything the guarantor owes. And if your guarantor dies, the landlord may be able to claim against the guarantor’s estate but, again, this will depend on your particular circumstances.
Can you bring your guarantor’s responsibilities to an end?
The guarantee operates as a contract between the landlord and the guarantor so, unless the landlord agrees to release the guarantor at an earlier stage, a guarantor will be liable for however long the guarantee lasts.
If you want the guarantee to end, perhaps because a relative helped you out a few years ago and you want to lift this responsibility from their shoulders, you could ask your landlord if they’ll agree to release the guarantor. Maybe your track record of rent payment is good enough for your landlord to feel more confident about you? Maybe you could offer some incentive to the landlord to end the guarantee, such as an increased deposit or another guarantor?
Asking for changes to the guarantee
If you think some terms of the guarantee are unfair to the guarantor, you or your guarantor could ask the landlord to agree to change the guarantee before the guarantor signs it. You probably have limited negotiating power so think about what to say and how to say it before approaching the landlord or their agent ‘demanding’ changes.
Typically, your guarantor may want to ask for changes that limit their responsibility, so that:
- The guarantee only applies for a set period of time, for example, 6 months or a year. In this situation it’s best if the provisions set out both a start and end date for the guarantor’s responsibilities.
- They are only liable for any debt owed divided by the number of tenants sharing the property. So, for example, in a situation where you are sharing with 3 others, the guarantee only extends to 25% of the rent for any one month.
However, many landlords aren’t prepared to limit a guarantor’s liability. You may need to think of what else you can offer them by way of additional reassurance that you are going to be an excellent tenant in exchange for such an agreement. See Tips to help you show a landlord that you will be a good tenant.
Unfair contract terms
You may be able to talk to your council’s Trading Standards Officer about whether a particular clause in the guarantee provisions may be unreasonable or legally ‘unfair’. Alternatively, you can contact the Citizens Advice consumer helpline. You can find details of this service at Citizens Advice consumer helpline. See also the section on ‘Unfair terms and conditions’ at What’s a contract?
Your responsibilities towards your guarantor
We suggest you:
- Talk to the person who may act as your guarantor and make sure they understand what’s involved.
- Show them the tenancy or rental agreement and any guarantee provisions they would be signing up to if they agree to act as your guarantor.
- Give them a copy of Information for guarantors.
- Encourage them to get their own independent legal advice before they decide whether or not to act as your guarantor.
- Offer them an easy way of checking that you are actually paying the rent as the landlord doesn’t have to warn them if you aren’t. For example, you could ask the landlord or their agent to email you confirming receipt of the rent and then forward this to your guarantor every month. This way you reassure them all is well.
- Work out a plan for meeting your tenancy obligations so you don't create problems for your guarantor. You could, for example, start saving a small amount of money every week into a ‘rainy day’ account so if you hit financial difficulty you can still pay your rent.
This guide was written and produced by Advicenow thanks to funding from the TDS Charitable Foundation.
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