Guarantor responsibility

[TheParrot]

Hi. I’ve just had it sprung on me that I’m to be a guarantor on an 8 bedroom rental - it’s news to me. I’ve not got the contract yet, but I’ve spoken to the organisation and they were keen to say that I’m only responsible for her rent, which is fine. But I’ve looked at the template tenancy agreement and it’s joint and several. I’ve learned everything I know about this in the last two hours, so I’m a total novice, but if it’s J&S surely she’s still responsible if one of them defaults, and by extension me? I realise the tenant and their guarantor would both have to bale, but two of the people she’s moving in with are friends of her friend and she hardly knows them. Can anyone stop me going down horror story rabbit holes and tell me that it’s all fine really?

I wish she’d just send me the bloody contact rather than breezily telling me I’m signing up for something then going radio silent all day!

I'm about to face this too, and I'll be buying some guarantor insurance.

I'm sure better qualified people than me will reply (my DD only starts uni in Sept 25) but my SIL asked me to witness her signing the guarantor document for my niece's shared uni house. It seemed like every parent / carer was signing for their child so it was split across the flatmates.

You are right OP. Every year parents post on this topic saying “oh but I am only guaranteeing my own child”. Maybe some indeed do, in the sense they mean, but I suspect that most of them haven’t noticed that their child’s obligation ultimately covers all tenants. I am not even sure that the landlord has to fail to collect from every guarantor first, or share his attack evenly across all of them.

In practice, as you say, it so hard to imagine all 7 bailing, but the more there are, perhaps the greater the risk of one of them doing it.

The whole business is grim - youngsters
frantically rushing to take on £7-8-9….k contracts, committing to live with people they’ve know for a few weeks, in nearly a year’s time. Its amazing but reassuring that it works out ok as often as it does. And it mostly does 😀

Just buy guarantor insurance if you are worried.

We bought insurance one year.

The next year we paid the rent a year in advance instead of being a guarantor.

We were not happy with the 'joint and several' nature of what we were being asked to do.

I refused to sign it. Agreed to pay 6 months rent in advance, then 3 months in advance and then the final 3 months in advance. Students are really pressured into these contracts and don't really understand them.

Thanks all. I’m very much in the conscious incompetence quadrangle , but I’ve had time today and I’ve crash coursed where I can. Yeah, technically I’m only liable for her share, but - and I still might be wrong - as a joint and several tenant - she is still completely liable for everyone in the agreement. I can wash my hands of it if I like, but she can’t, so in the end I’m taking on liability for her and 6 people I’ve never met. I’m 9 hours in on studying this, but I’m almost certainly taking out insurance at 1 to 2 hundred quid. It’s bonkers that kids that are exhausted are not realising that their parents guaranteeing their own rent doesn’t deal with a cohort that all decide they want to drop out without warning.

One tip….get your DC to share emergency, ie parental, contacts with flatmates. Really useful if one of them has an accident or gets ill. But also useful if things go wrong and you need to speak to other guarantors.

Same position here, I was worried and I called the letting agency and they assured me that they always go after their guarantor if a student doesn’t pay and it has never happened in their experience for it to be escalated any further than that. They said in the rare case that a student leaves they pay until they find a replacement tenant.
When we received the signed contract, as its joint and several it lists all the tenants and guarantors details so you will probably have those too should you need to contact anyone.
We are getting guarantor insurance just in case as peace of mind but I think it’s rare that anything goes wrong 🤞

We have just signed for DD but as we are the ones paying her rent anyway its no big deal. I checked the contract before the kids signed and we are only responsible for DDs rent. There are only 3 of them and given what information we have about the other 2 girls I am not very worried to be honest.
I would not be happy signing for an 8 bed house with lots of unknown people though, insurance would definitely ne important in those circumstances.

It’s a nightmare. You are correct that if the contract is joint and severally liable, your DC is liable for the rent for the entire house, as are you if you are her guarantor. The reality is, in the worst case scenario, they will go after whoever is easiest to get to pay up. That could be you.

I once had an argument about that with a dodgy letting agent who offered to let a property to my DC and their friends as long as one of them had a guarantor. He tried to convince me to be the only guarantor for the property as the only parent who was a homeowner and resident in the UK by offering to put a limit on my liability to the amount of DC’s share of 1/3rd 🙄 Except that of course could mean that if DC paid all their rent, I would still be liable for up to 1/3rd of the rent if the other tenants didn’t pay.

Some landlords will agree to guarantor insurance or paying the year up front, but not all will accept that unless all tenants do the same. It can be really difficult to find somewhere unless you agree to be a guarantor. I guess because even with the rent paid up front or an insurance policy for unpaid rent landlords want someone to hold liable (who has asserts) if the deposit doesn’t cover damages.

If you do sign, watch out for clauses that hold you responsible as a guarantor for the property until the end of the tenancy not the end of your DC’s tenancy ie if your DC moves out with the landlord’s permission. I have seen that before…

Be aware, they will pursue whoever they can to get the money back. I had a house share and ended up chased for council tax money. The others had moved out of the country or couldn't be found. I ended up paying a lot of money. 8 bedroom house? You are guaranteed someone won't pay properly.

The insurance may not give you as much of a safety net as you think. I looked at one policy (Guarantor Insure) and is effectively just an arbitration service. If something goes wrong then, provided you meet their strict conditions, they will write letters to the various parties to try and sort it out on your behalf. If they can't sort it out, they will refund you but. However, the catch is in the conditions - they will only do any of this if they believe they have more than 50% chance of recovering the money. So if your child's flatmate is untraceable or bankrupt and their guarantor can't be traced either, then forget it.

Also, there is an upper limit to the claim, which may only cover rent. If a housemate causes significant damage, that isn't covered by the deposit, you could be liable for a share of that too.

I have signed several tenancy agreements for DC and each time the agreement did indeed say that it was joint & several liability but also had a clause saying that my guarantee was only for DC’s share. So it’s important to check the actual wording.

Yes, but your child's "share" increases if one of the flatmates defaults. E.g. if it is a flat for 5 people, each paying 20%, then if one disappears, the other four then have to pay 25% instead. (They could replace the missing tenant, but only if the landlord gives them permission to sub-let).

The guarantor agreement I signed specified the total amount of rent I could be liable for - equal to one students share of the rent.

The aspect all could be equally held to account for (or chased for the share if another) is deposit shares or damages exceeding this.

I checked that the guarantor agreement terms were before DS paid over any holding deposit money or signed the contract and paid the security deposit. The agent was clearly used to being asked this Q by parents.

I was satisfied that I was not committing to pay rent for all 5 students if they should suddenly vanish or drop out.

This guarantor agreement had a specific figure named as max rent I could be responsible for. It was around £8.5k which is the rent for my son for 52 weeks of the contract.

Same here, I deal with Tenancy agreements for work so checked very carefully and verified with The Agent and the most I could be liable for is DD's rent, which we are paying anyway.
In actual fact I have since spotted an error that means it would be very very difficult for The Agent to pursue me as Guarantor anyway but I haven't told them

How much is guarantor insurance?

I think I was quoted upwards of £200 from memory.

@niggled Yes I get that’s how joint liability works but like other posters, the agreement said that my guarantee was limited to the amount of the rent payments that my own DC was obliged to make, and the agreement spelled out those payments. There was no risk that her share would increase to 25% or whatever even if another tenant defaulted on rent. But it does have to be spelled out that way.

As someone said up thread insurance is never a golden ticket of safety. Insurers are v ery adept at getting out of paying on policies of all kinds. Perhaps start by offering to pay a year's rent for that one child, but if the child is also liable for whole house rent that remains a problem. (I paid the rent and my children's father guaranteed it - this of course meant I had by far the worse deal as my children's friends tended to have well off parents so not likely the guarantee would be called in).

Radio 4 Money Box a few months ago had a terrible item about some poor boy where the property was not ready for start of term with very dodgy letting agency with excuse after excuse and they even forged his signature on a variation document. The BBC got a handwriting expert to look at it and it was identical which apparently is almost impossible to achieve if it is genuine and looked like agency had cut and pasted the boy's signature on the variation. I think that agent should go to prison for fraud.

This is correct from my interpretation.

I used Only My Share instead. They pay first & then negotiate/pursue the defaulting tenant etc on your behalf.

It’s £99 with Only My Share.

they cap the amount they will pay but I figured that would cover 1-2 tenants defaulting. All of them doing so would be unlikely.