Quick question re being a guarantor for flat rental

[ChinaCrisis]

We have agreed to be a guarantor for our student daughter while she is at uni and have just had the guarantor agreement through to review and sign.

The agreement we signed for her previous flat just stated the figure for her portion of the rent and so we assumed that this would be the extent of her liability.

This new agreement however states the rental value of the entire property (£2200 as opposed to her share which approx £550).

We have tried to contact the agent to query it but so far not heard anything back from them.

I just wondered whether anyone else had experience of this or could advise before they get back to us as we'd like to be armed with a few facts first if possible :)

If it helps, this is what the agreement states ....

Important information meant for guarantors where the tenant is in a shared tenancy

We ask for a guarantor for each tenant so each guarantor will act for an individual tenant. The guarantor would not normally be asked to guarantee other joint tenants. Each tenant's guarantor is in the same position unless, for example, the tenant/guarantor is not UK based where we would then request a significant rent payment to be paid in advance.

However, it is worth highlighting that the lease agreement the tenant will be signing is a Private Residential Tenancy and if it is a shared tenancy (i.e. they are moving in with someone else over 18), all tenants will be jointly and severally liable for the property, this includes the rent and any damage, if caused by the tenants or their friends.

Should one tenant not pay their share we would ask their guarantor to make payment. In the unlikely event the guarantor of the aforementioned tenant refused to make payment, the landlord would be within their rights to ask the other tenants and/or their guarantors for payment.

The use of Private Residential Tenancies is standard practice throughout Scotland and it would be unlikely that sharing tenants would be able to find private rental accommodation that doesn't have the same system.

This is, understandably, a common concern with parents or anyone else who is acting as a guarantor in a shared tenancy so it is important that the tenant trusts the friends they will be moving in with*

This is normal and the agreement seems to explain it well. I'm not clear what your question is.

Note that if the guarantor agreement isn't executed as a deed (it must be clearly identified as such, and your signature must be witnessed), it isn't valid and you can send them packing if they try to get you to pay.

You are liable for the full 2200. That's what joint and several means.

That's why I refused. In fact I would have been happy to pay all their rent for that one child up front for the 12 months more than being a guarantor.

Even if the full 12 month rent were paid at the commencement of the tenancy, the tenant herself would still be responsible for the whole of the rent if the other parties didn't pay their rent. Having a guarantor only gives the ll an additional person from which to claim. Presumably in this case the daughter has insufficient income to pass the affordability test.

Uni lets are disgusting and unfair.

If all of the other students don't pay any rent, the LL can come after you for all of it.

Same goes for damage.

But what other choice do you have as most uni lets are exactly the same.

Are you in Scotland??

It isn't just uni lets. All joint tenancies are the same. If a tenant fails to pay the landlord will typically go after their guarantor before trying anyone else. But yes, the landlord can go after any guarantor for the whole amount owing, leaving the guarantor to pursue the tenants for their contributions.

Yes - in our case I am paying the rent and their father is guaranteeing it. I suspect he's got the much cheaper bargain - probably zero cost.

It isn't just uni lets. All joint tenancies are the same
I agree but I can't think of any other situations where a large group of unrelated people would all need guarantors except a group of mates.

Another thing that is annoying is that there is often no other choice for 2nd / 3rd year uni students.

I think this came up before on Mumsnet. Yes, you could be liable for the entire rent as guarantor in such a situation. And if another student fails to pay their rent I don't think the landlord even has to try especially hard to chase their guarantor, they can just demand the money off you.

The more parents that decline to be guarantors the more this practice should stop. I couldn't do it for my 2 as wouldn't sleep at night. There is no way I could cover it without losing my house for my younger kids. Both found places that didn't need a guarantor or the landlord was reluctantly willing to forgo in their case to keep the group.

There is also rent insurance which some landlords may accept as an alternative. Many will accept without especially if it is just one or two of the group.

When I was at uni I had a guarantor for my house, there were 2 of us and we each had to have one. We were assured by the letting agents that although it's a joint tenancy and technically we would both be responsible for the whole sum should it go unpaid they would only ever persue the tenant/ their guarantor but that was just their policy and legally they could persue me/ my guarantor if my housemate didn't pay and vice versa.

should it go unpaid they would only ever persue the tenant/ their guarantor
I wonder if the LL knew the letting agent was saying that to potential tenants??

Hi,

I work in lettings - is the lease your daughter is signing an AST or is it part of an HMO?

Difference being - if it's an AST it makes no difference that your daughters a student, legally all people named on the lease are known as "the tenant" (collectively). Therefore as guarantor you are guaranteeing the rent for "the tenant".

However most agents with any common sense would only chase someone else's guarantor as an ultimate last resort - what's the point of chasing Jill's dad for Jack's rent when Jill's dad has also signed as guarantor?

In a HMO type agreement then your daughter will have rented a room in a property and then is granted use of the communal areas - living room, kitchen etc. In these arrangements then you would just guarantor for her.

As a (very) rough guide - an AST will be used in buildings where there are a mix of tenants - i.e. landlords will aim for mainly professionals as they can be referenced etc but you may get some students. HMO types are usually old Victorian houses split into like 20 bedrooms with two kitchens. HMO bedrooms will have locks on the doors, AST properties won't do (invalidates insurances due to fire risk)

Sorry. Just read the end of the post - it hadn't loaded properly on my phone.

It's an AST so legally they are all "the tenant" so you more than likely will be guaranteeing the whole rent but then you need to bear in mind that all the other guarantors are in the same boat so you're all responsible for the same amount. Realistically if it ever got to court (worked in property for 10 years and never had a tenants get to this stage) then common sense still applies in terms of allocating the debt.

The only things to bear in mind if you are really concerned are a) the landlord can serve notice on tenants who are 2 months in arrears so sometimes the best way to deal with it (in agreement with the landlord) if one tenant is refusing to pay, then if all parties don't pay for 2 payments (1 month and 1 week) it allows the LL to serve notice and release the tenants from the lease or option b) change of tenants can happen so the person who stops paying is changed for another tenant which may at least cap the arrears till they agree to a payment plan.

It's a bad landlord and a bad letting agent and to some extent a bad tenant who let arrears get any worse then 2 months - excluding any late payment fees or charges without something else coming into play. 4 months is the worst it should get - 2 months arrears and then 2 months for LL notice to come into effect but most LL's will release tenants by this point as it makes more financial sense to get paying tenants in as quickly as possible

What's the point of chasing Jill's dad for Jack's rent when Jill's dad has also signed as guarantor?
If Jill's dad has money and has a job that would be affected by having a CCJ then chasing Jill's Dad is a great idea as he would probably pay up quickly rather than risk a CCJ. This is especially likely when Jack's Dad has lost his job and doesn't have any money. No point in getting a CCJ against someone who cannot pay up.

For someone that works in the financial services industry having a CCJ would be a disaster.

an AST will be used in buildings where there are a mix of tenants
Assured Shorthold Tenancies are given to tenants in most private rentals including HMOs.

The issue is not the AST, it is whether or not a tenant is rented an individual room as a sole tenant or if a group of tenants has a joint tenancy.

Realistically if it ever got to court (worked in property for 10 years and never had a tenants get to this stage) then common sense still applies in terms of allocating the debt.

NO, there is no such thing as common sense in the law. The law applies and the guarantor will be held financially responsible for the entire rent. I can imagine sitting there and telling the judge common sense applies. I can imagine them saying 'and on what authority do you presume I can apply common sense?'

I work in lettings - is the lease your daughter is signing an AST or is it part of an HMO?
There are so many inaccuracies in your two posts that it concerns me that you say you work in lettings and as for "common sense", really??

@PersianCatLady I assume so as that was their policy regarding arreas so what the LL signed up for but I don't know.

Hi - solictor here. I refused to sign as guarantor for my ds as uni (monthly rent £500 x 5 students = £2500 × 12 months = £30k). I pointed out that potentially I could be liable for the lot (as would other parents). They hadn't realised this! The students found another property that didn't require guarantors!