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Guarantor for student let(22 Posts)
Long story, but DS has decided to return to uni in Sept. He had a few MH issues earlier in the so we're really glad he's decided to go back. Anyway, as he wasn't sure until a few weeks before the end of term whether he was going to go back or not, he hadn't looked into accommodation for next year.
Anyway, after much panicking about finding somewhere to live, he has now found a room in a shared student house. All good, until the tenancy stuff cam through from the agent yesterday. I've been a guarantor for DD when she was at uni, but was only liable for her portion of the rent and was happy to do so. This agreement though is 'joint and several' so means I could be liable for the entire rent at an eye-watering £2990 per month! I'm not happy to do this, but wondered if it's worth trying to negotiate agent for a change in the agreement or offer to pay 3 months up front instead. They also say you must be a homeowner - I'm not.
I'm not actually sure if the agreement is legally valid anyway, as I'm sure a guarantor agreement must be a deed and needs to be witnessed independently. There is no space for this on the form they've sent.
I'm so proud of him for sorting himself out, that I don't want to put a spanner in the works, but also don't want to expose myself to potential financial ruin!
How many people are sharing? The probability of every other student (and guarantor) defaulting is quite low. I worry about this but doing the forms recently for about the fifteenth time (several DC's in several houses) so far have had no problem. Every agent asks different things some have needed witness, others want bank statements, some want wage slips
He will be one of 6. With DD's rent, it was split into an amount per room, but this looks to be one whole amount every month. Not sure how they are dividing it. DS has a single room, not sure about the others, so hopefully it gets divided up proportionally.
I'm going to ring the agent on Monday as having read the agreement some of the figures make no sense. Their stipulated requirement for a guarantor is that they have to earn 3 times the monthly rent of £2990 times 12 which comes to a whopping £107k! Fairly certain that many parents won't have this income. There are also numerous spelling and grammatical errors and it doesn't seem very professional at all. The letting agents do exist though - I have Googled!
It might be worth contacting his Student Union - they usually have people who check rental contracts.
Jesus Christ that's an expensive rental! My dd is going in to one for 5 and it's £1600 a month, I've visited and it's lovely.
There's absolutely no way I'd be a guarantor for that amount.
I will say that the letting agent my dd was dealing with made some monumental mistakes which figures and contracts but fortunately another agent twigged and sorted it out.
Unfortunately DS is in an expensive part of the SE, hence the astronomical rent! I haven't even seen the house, but expect it to be pretty standard student accommodation and not the height of luxury.
I have done a bit more research on the guarantor agreement and it does look like that to be legally binding, it must be executed as a deed, so have an independent witness sign the document as well. There isn't even space on the paper to do that.
This is pretty standard. The landlord does not want to take a risk either.
Can you pay the whole year in advance? If so offer this to the landlord in return for him releasing you from the joint and several clause. It should work.
Also as soon as he moves in he should suggest they all provide parent contact details to be posted in the flat in case of emergency. He should then take a photo so that if anyone defaults, you can contact their parents.
Otherwise it is a case of crossing fingers hard. It would be easier if he knew them better.
I did this and it was a nightmare when one student disappeared. The landlord issued summons for rent arrears (the whole amount) to every guarantor.
The agents basically said they are entitled to recover their rent and 'go after' whoever they want to in order to get paid.
I would get a clause written into your agreement removing the 'joint and several' wording, therefore ensuring you don't end up in same position we did.
Unfortunately I/DS don't have the money to pay the full year up front. DS has some savings left over from a big bursary he had last year, so could probably manage 4/5 months up front, but any more than that wouldn't be possible.
I'm spoken with DS now and told him it may not be possible for him to take the room unless I can persuade the agent to amend the guarantor agreement so it may be back to the drawing board. Conscious that the clock is ticking down to September too.
If someone defaulted the landlord is likely to go after the lowest hanging fruit, ie the richest parent. (Easy to check home addresses against house prices on Zoopla.) It probably wont be you. On, affluent friend decided to guarantee the lot, since she recognised that she was first in line, and one of the others was from the US. However since your but son does not know the other residents it is more difficult.
Speak to the agent. Why was the room available? Did someone drop out? In which case the others should be motivated to ensure it works for him.
Yes someone did drop out so hoping that works in DS's favour. The tenancy doesn't start until 12th September though, so there is time for them to find another tenant if this doesn't work out. The drop out's name and signature is currently on the tenancy agreement, so guess they will be liable if another tenant can't be found though.
Could he be clear to the others that you are only able to guarantee his rent, and get the others to lean on the agent. They need a replacement, and bird in the hand etc.
Someone on the WIWIKAU Facebook page had this recently, one girl dropped out leaning them all liable. Luckily she paid in the end but I wouldn't be happy signing for everyone.
I don't like these joint and several guarantees. Indeed I refused to guarantee them at all and their father has done so although as I pay 100% 9f the rent anyway I get the worse deal as it is unlikely every student inthe house won't pay rent and the guarantee will kickin.
Some people offer to pay the 12 months rent up front instead of guaranteeing everyone else but my children never seem to want me to be different and offer that instead as they want to fit in with the others but that is certainly something that surely is possible instead of the guarantee.
Xenia, you may not like such guarantees, but landlords too would prefer not to take a risk, and in some areas they can choose tenants whose parents will sign up in preference to those who won't, or let to working people. The joint and several clause is also standard for flat shares with professional sharers, though then without guarantors.
Irresponsible students are more likely to care about letting down fellow students, than letting down a landlord.
Universities could help by registering landlords and then penalising students who fail to pay rent by not allowing them to graduate. I think this happens sometimes when a private provider is providing hall accomodation for the University. UCL used to run very good rent guarantee schemes, and would step in quickly at the first hint of problems. The most effective tool landlords often have is the small claims court. Students are foolish if they pick up a CCJ, especially if they want to go on an do something like being a lawyer. It will be equally effective with parents who have signed up for joint and several liability.
I think there are some insurance schemes which act as a guarantor, Helping Hand may be one, as international students often have a problem (which is why payment in advance is often an acceptable alternative). I don't know how they handle the joint and several. Perhaps they are just more aggressive with the guarantor of the defaulter. I assume though that they are expensive.
Yes - I was asked to guarantee DS's rent on a joint and several basis which for the whole year for 6 of them would have been £27,000 (worse case scenario that none of the paid anything). When I pointed out that due to our professions we would be the guarantor that the landlord would most likely go after he explained to his potential room mates whose parents had already signed. They then said they hadn't realised what "joint and several" actually meant. Anyway they found a different property (in Lancaster) which did not require guarantors so all was well. However I appreciate in other areas that may not be possible.
I spoke to the letting agent today. The example they give for the salary level needed to be a guarantor was 3 x the monthly rental x 12, which in this case would come to just shy of £108k. I asked if this was in fact correct as that would preclude lots of students and he had to backtrack and say that it was only 1/6 if the rental that I need to guarantee. I asked why this wasn't explicit in the wording and he couldn't explain but assured me that was the case!
The bigger problem we have is the non-homeownership. This is an absolute requirement apparently. Offered to pay 4-6 months up front (depends on DS savings and anything I can put towards it) with DS paying two instalments of 3 months in Jan and April when he gets his student loan. Letting agent said he would put it to the other guarantors to see if they would guarantee as 5 not 6. Not a given though. The only thing in DS's favour is that they need another tenant to fill the 6th room otherwise they will all be paying another £100 per month each.
No further forward really and I think I managed to piss the agent off as he was really flustered when I pointed out the inconsistency in the paperwork.
Also if the document says joint and several liability but over the phone the agent says that is not so it is very likely only to be the document which counts.
I suppose it is clear why they want guarantors who own a home so they can seize and sell the home if the tenants do not pay. Yet plenty of parents are as badly off as their student children! I am not sure the agents do too many checks on the guarantors' wealth which I suppose if you have 7 parents' guarantees probably is okay as at least one probably has a house with equity in it.
OP, don't panic! There is still plenty of time for your DS to get accommodation sorted. Regarding this tenancy, if I were you, I'd actually go to the letting agents office, get the paperwork clarified and amended before signing. What you're told over the phone may be very different to what you could end up being liable for.
The contract stuff in a letting agent is normally handled by a junior admin person. I reckon there are errors in about 50% or contracts I see.
If he wants the house, say you need the joint and several clause removed. You cant afford to take this on. And so it has no impact on the others. You can guarantee your sons rent as you know he will pay.
As for you not qualifying, many letting agencies use referencing companies so there is a fair chance 'the computer says no'. The alternative is to offer six months up from in lieu of a guarantor. This is a landlord decision. I have done so with otherwise good tenants with a CCJ, but the landlord might be constrained by either mortgage oe insurance company. Or pay a guarantor company.
Sadly visiting the letting agent isn't an option. We're in Cornwall, uni is in Sussex.
I got the impression the agent is a one man band. The spelling mistakes in the contract indicate it's been
badly cut, pasted and bodged from the net.
Email to be sent with DS's proposal and I will request that the joint and several clause is removed from the agreement if anything is finalised.