Horrified at how many parents guarantee rental agreements without reading

[PinkDino33]

This might sound brutal but I am regularly horrified on Mumsnet when I read posts from parents desperately seeking advice because things have gone terribly wrong with the property their child has rented, and they are shocked to discover the full extent of what they and their child are liable for.

Their DS has just found out their flatmate hasn't paid a single month of rent in the 12 months they've lived there.. Does he really have to pay what the other boy owes?

The DD's flatmate is making life hell and her and all the other flatmates want to move out and stop paying... surely this is allowed?

The DS signed up to a house with his friends but now he wants to move back home.. Does he really have to honour this contract and pay the rent for a whole year?!

It's like parents don't really think of a tenancy agreement / guaranteeing a tenancy as being a real contract, and don't know anything about what they've signed.

Is it a joint tenancy agreement? "No idea"
Can you give notice or is it for a fixed period like 12 months? "Don't know"
"I'm going to have a proper read of the contract tonight.."

It's no good properly reading it 6 months after you've signed it!

People seem to think the contract / how it works with the Landlord must be based on fairness.. It's not fair that their child is financially liable because another tenant hasn't paid, so the landlord can't possibly have the right to try and get the money from him. It can't possibly be the case that they've guaranteed the full rent amount and not just their child's - because that would be madness!

Say it's a 6 person property on a 12 month joint agreement with each person paying £750pm.. that's a total rent of £54,000 that you are guaranteeing!!

I say this, not to shame parents but because if there was more awareness of what parents are actually signing this would cease to be the norm amongst estate agents and landlords. You've got tens of thousands of parents every year signing up to these things which no one in their right mind would sign if they actually read and understood the thing!

It's horrible when these things go wrong and you're living with someone who's a nightmare or doesn't pay, so I do sympathise. But if your child is signing up to a tenancy agreement (especially if its a joint agreement and you need to guarantee it!) ask questions, READ the contract, look up terms like 'joint tenancy' online, ask for proper legal advice if you don't understand anything.

I was coming back to say this next.

You really would find limited scope for all of these negotiations that you think you will have. Once they have sourced a property that they are happy with and will be able to afford (no means feat in itself), speed is of the essence.

Some contracts may provide clauses limiting what the guarantors (parents in most cases) would be liable for but others aren't so clear.

Read it, didn't like it, had no choice but to sign it or DD wouldn't have anywhere to live. Basically ALL student private rental accommodation in the area we needed is joint and several liability and it all requires a guarantor per student. Even though technically I'm only guaranteeing my DD, she becomes liable under "joint and several" if someone else defaults. So potentially all of the guarantors are guaranteeing all of the students in the house, although they go after the individual student's guarantor first.

Very luckily I know the friends my DD lives with and I know their parents a little and felt confident that it was unlikely that we'd be put into a sticky situation. And so far, so good. DS is at a Uni where he can stay in halls all 3 years, and likely will, which doesn't need a guarantor in the same way.

But yeah, it's not great. I did look into guarantor insurance, but not sure that's really worth the paper it's written on either.

Legal agreements in the school curriculum 😂 to do that in any meaningful or useful you’d be trying to teach children the best part of a law degree.

i have never ever seen this on MN so really surprised it’s so prevalent, my instinct was it was an opportunity for the OP to criticise imaginary people who aren’t as smart as her but I’m sure that’s not the case.

i do agree with a PP who spoke about how realistic it was to enforce the entirety of the contract via the courts. Certainly, I think most people would allow a £56k debt to go to court enforcement rather than remortgaging or similar to pay it.

Exactly

It's obviously a personal choice for each parent but as I said earlier if I wasn't happy with it I genuinely wouldn't sign it.

I don't think I'm in a super strong position to demand them to alter the contract, although I would ask (which I don't think many parents do!) But I will be making clear to my DC very early on that I won't be guaranteeing other students' rent, or I would only be guaranteeing the full rent if it was a small property i.e. 1-2 others who they knew well and trusted. I obviously wouldn't wait until they'd found their dream property with a group of 8 friends and presented me with the contract to sign to bring this up. That would never go well.

And I'll keep challenging this in the 10+ years I have until we get to that point. Because it's unfair and ridiculous and acts as a huge barrier for any young people from working class backgrounds.

This situation was literally the no.1 trending thing on MN just last night!

And I probably come across variations of this issue once a month or so.

I can't imagine why they wouldn't. Most are standard wording created to be WITHIN the law not written on a fag packet by a dodgy landlord.
To anyone who finds theirselves a guarantor being chased for money the best bet is to, at the earliest opportunity, limit your liability by finding suitable replacement tenants etc to replace the one that has left and so on.

Those posts do sound naieve, Most people are a bit more aware now. FB groups like 'I wish I knew' etc talk about it. Dh signed through gritted teeth, talking to ds1 about how someone can appear nice, but later flaky and that things can change suddenly later. As it is he's year 3 at Nottingham and it's been fine, no problems.

I'm glad I've read this. I've never rented and DS will hopefully be off to Uni in the autumn.

Honestly I do not think any of us are that happy at having to sign one but really you have no choice if they are to get a house. Yes read it, yes do all you can to ensure you are only liable for dc portion of the rent but ultimately they have you in a corner with it all.

As I said earlier The Agent for DD's 2nd year property has F'ud up our Guarantor Agreement so I doubt its enforceable and I haven't told them

I agree with @ReesesCupcake :

Getting ANY property at all, in many Uni cities is a fight in itself. Ds1 was looking early, pre Christmas of year 1, with friends, for a house for year 2.

It would be interesting to see what happened if a case got taken to court. The contract is the contract, but terms can be ruled unfair. It's one thing for six guarantors to be jointly liable for the whole amount but presumably the legal action would have to be taken against all six jointly, only if one or more couldn't pay would the others become liable for the missing amount. Joint liability doesn't mean the landlord can target one person and let the others get away with it.

do you have any actual proof or evidence for "Honestly they really are?"
Because I could find nothing saying tenants couldn't pay more upfront, only that landlords will no longer be able to demand it.

besides there is a very easy way around this
Tenant meets with landlord, hands over cheque for x months rent. Tenant signs lease. Landlord cashes cheque via phone (the only way I have cashed cheques for the last 5 years or so) in front of tenant. All sorted, with verified proof for both parties.

Yes tenant could clear their account before the bank approves the cheque but then the landlord could declare their contract null and void as they haven't paid the 1 month upfront.

Besides which there is a certain amount of trust in any transactional relationship - this is an arrangement which would benefit everybody (landlord gets money up front, tenant doesn't have to sign guarantor), so no reason why either party would want to screw the other over.

The contracts, the price of rent (which means every student renter needs a guarantor), universities recklessly expanding beyond what their city's rental market can absorb, and the idea that landlording is a way to make heaps of "passive income" are really what is unreasonable here.

As a lecturer, I see 19/20 year olds making silly choices about who to live with, or making good choices to change their mind about things. But they have to pay a high price for doing either of those, because they are rushed to choose properties from a meagre and overpriced selection. They, and their parents, have no bargaining power. The private student halls are so much more expensive than shared houses that working class students would struggle to afford them. The 2 bed flats are more expensive and rented by young professionals who landlords prefer. There really aren't any good options for some people.

As an aside, I think this also stems from student loans entangling parents in their adult children's higher education in a way that they weren't under the old grant scheme. But I don't think that is ever going to do away now.

My DD is looking for accomodation at the moment. I specifically didn't want that type of contract because I don't want to be liable for other people not paying rent.....but there's barely any choice. And they need to make a yes/no decision immediately or the next people will get the property.

And this is why both my children went into private halls of residence for their second and third years. It cost the same as their first year halls of residence.

It is a tenancy for one en-suite room, you guarantee your child and your child alone. It also comes with 24 hour security and key card access so no drunk flatmate leaving a rented house door unlocked, or worse wide open.

Yes it is expensive but far less expensive than if other students don't pay and the landlord pursues us for their payment.

again, there are lots of other options in most uni cities

search, for example 'Bristol single student private room' (or some variation on the above) and you get thousands of options in specific student accomodation blocks (basically the private version of 1st year housing), ranging from a full studio apartment with kitchen and bathroom to private bedroom and kitchen/bathroom shared.

If your DC wants to live with a specific group of friends in one private house it could be an issue, but if you, the parent, are paying you are entitled to refuse that and say you will only pay for an individual contract (or set out other circs, e.g. a small flat of 3 people max and you speak to the parents beforehand).

The key is having these talks well in advance of them even choosing what uni to go to, not waiting until the panic of signing half way through 1st year.

Good luck calling a tenancy agreement “null and void” because someone hasn’t paid. You’d be looking at that taking months to enforce to get them out of your property, plus legal costs and missed rent for the time they’re not paying. And they might not have the money at all when they write the cheque, the LL presumably doesn’t trust them to pay monthly hence requiring the guarantor/upfront payment… so the only way to get the required security is for the tenant to voluntarily pay before signing the tenancy agreement (unadvisable) or by having a guarantor - and so we’re back to square one.

Try finding somewhere safe that will rent to students without a parent guarantor. Sadly most of us don't have a choice.

where I live, there are no fixed-term tenancies so it isn't a problem I'd ever considered tbh

Not at all. Not teaching the finer points of all aspects of law. Contract law is one small section of a law degree, but you don't even have to fully teach contract law. Just enough to explain the simplest of basics.....

1. That a contract means obligations and liabilities...
2. That you may or may not be able to cancel....
3. That you may end up liable for potentially large costs if you break the terms of a contract.
4. A few examples, i.e. when you take a mobile phone contract for 24 months, you're liable to pay for 24 months, even if you lose or damage the phone, so it's wise to have insurance.
5. Or a car HP loan, that you have to pay for the full 36 months even if the car becomes unusable due to expensive repairs or an accident.
6. Or there's not automatic right to a refund if you buy something in a shop and change your mind.

A half hour "lesson" just covering some very basic points would be a very good starting point.

Really, really no need to delve into more detail, such as caveat emptor, the need for consideration, restitutio in integrum, unfair contract terms acts, consumer credit acts, etc. That kind of thing really is more for A level law. I'm talking about basic life skill levels.

My DS was in Uni for 4 years and apart from Halls in the first year was in private rented the rest of the time. For those 3 years I signed as guarantor on a joint tenancy each year but asked the letting agent (different for each year) to amend the guarantee so that it limited my liability to his share of the rent only with the total amount I was guaranteeing noted on the guarantee. None of the agents queried this and were happy to amend the guarantee agreement accordingly. I appreciate however my experience doesn't seem to be the norm.

I manage a portfolio of student properties for a local landlord and only ever ask parents to guarantee their child's share of the rent - again with the total amount they are guaranteeing noted in the guarantee.

The Renter's Rights Bill is only going to exacerbate this issue for students because (unless amended) it makes taking rent payments up front unlawful and also removes the fixed term so parents are effectively guaranteeing for ever, rather than a fixed term of say 11 months - the joy of unintended consequences.

With my son's second and third years, his flat mates deliberately chose "purpose built" student flats rather than a house share. It was very similar to the campus accommodation in year one. They had a "cluster" arrangement of six en-suite flats sharing a kitchen/living area. Six separate rental agreements covering their own flat and bathroom only, with a "joint and several" clause only on damage to the communal areas of the kitchen/living area and the communal hall way. If one failed to pay their rent, the accommodation owner couldn't go after the other five. Utilities were included in the rent, so there were no arguments about sharing the gas/electric bills nor one student paying and hoping for contributions from the other students etc. We'd pre-discussed it all with our son long before he even went to Uni, and again & again in the Summer before he started so that he could "influence" his flat mates when they started discussing year 2 just a few weeks after they met when they started Uni. He expressed his preference of purpose built flats as opposed to house shares and explained his reasoning to his flat mates, they took it on board, and looked at proper student let flat options rather than house shares. As a result they had a trouble free couple of years where everyone knew where they stood.

We were warned about this, and were advised to sign a guarantor where you weren’t liable for the other flatmates, only your own child.