When searching for your perfect student house, there’ll be many new terms and phrases you’ll hear for the first time. Renting is new territory and with it comes a whole load of new jargon to get your head around. One of them that will crop up all the time is ‘guarantors’. Before you dismiss the idea as no big deal, let us tell you a bit about the role of a guarantor…
What is a Guarantor?
A guarantor is someone who agrees to ensure that the tenant follows the terms of a tenancy and will step in to make up any shortfall if they don’t. This includes, but is not limited to, paying the rent if the tenant doesn’t. In short, if you decide to blow your student loan on an iPhone11 instead of your rent, your guarantor will have to cough up instead. Depending on the agreement, a guarantor’s liability can also include damages to the property.
A guarantor, particularly in the case of students, is often a parent or close relative of the tenant, but can be anyone that is prepared to take on the responsibility. The usual requirement for a guarantor is that they are employed, are a UK resident, have sufficient earnings to cover the tenant’s rent, or are a relative or family friend.
Why do I Need a Guarantor?
There are many different reasons tenants may be asked for a guarantor. Primarily, it’s down to their financial situation. If you have no credit history or a low credit score, are starting a new job, or are on a low salary, you’re paying rent via benefits, or if you’re a student, you’ll be asked to provide a guarantor.
Your new prospective landlord may wish to make the same checks on your guarantor as they will on you as the tenant to ensure they are ‘good for it’ and are able to pay, should they need to. Don’t underestimate the importance of a guarantor or the gravity of what you are asking them to do; you’re asking someone to lay bare their own financial circumstances, as well as be responsible for ensuring you stick to the terms of your lease.
When asking someone to be a guarantor for you, make sure they understand all that that entails. Provide them with a full copy of your tenancy agreement; don’t assume, or just ask them to sign it. In the worst case scenario, should you fall into rent arrears or cannot pay for any property damages that are your fault, you could be putting your guarantor in financial jeopardy. Be honest with your guarantor about what you’re asking of them and make the time to sit down with them and have a serious conversation about what it all means.
To make the process as easy as possible for all involved, and to build trust with your student landlord or student letting agency, following this sequence of steps will help:
- Provide a reference for yourself as a tenant
- Provide details and references for your guarantor
- Send a draft, UNSIGNED, copy of the full tenancy agreement and the guarantor agreement to your chosen guarantor
- Ask your guarantor to have their signing of the agreement witnessed, and dated
- Send the signed agreements back to your landlord/letting agent in a timely manner
- Sign the tenancy agreement in person, in front of the landlord or agent and ensure they do the same.
The Guarantor Agreement
Ensure the guarantor agreement includes the names of the landlord/letting agent and the tenant (you), as well as the address of the rental property.
It should also contain an explanation of exactly what the guarantor is liable for, as well as a description of the guarantor’s liability. This is especially important for student lettings. In some cases, if there is a guarantor for one individual in a joint tenancy, i.e. a shared house with a single tenancy agreement like that of a student house, then often the guarantor is also liable for the other tenants in the property, as this is a ‘joint and several liability tenancy’. You as the tenant, and your guarantor, should read the deed you are signing carefully, and ensure it is set up so that individual guarantors are liable for individual tenants.
Bolton, Liverpool and Salford Student Estate Agents
If you are unsure about any of the terminology used in your Mistoria tenancy agreement, or guarantor agreement, please make an appointment to come and see us to discuss it. We’d be happy to help you, and any prospective guarantor, to ensure everyone in the process understands their responsibilities when renting a Mistoria property. Please contact us by phoning 0800 500 3015.
We are members of ARLA and NAEA Propertymark which means we meet higher industry standards than the law demands. Our experts undertake regular training to ensure they are up to date with best practice and complex legislative changes so they can offer you the best advice. We are also backed by a Client Money Protection scheme which guarantees your money is protected.