Uni 2nd year accommodation. Guarantor worry!!

[GinaDreamsofRunningAway]

Hi,

My DD is a first year uni student and her current flatmates and herself have found a house to rent for their second year. There are 6 of them that will be sharing the house. We have been asked to be a guarantor which we are okay with but we are concerned about being liable not just for our daughter but her the other tenants too. Its a real worry. We know we have to do it. If we don't agree to be guarantors then our DD doesn't get the house.

Should we take out guarantor insurance? Is it worth the paper it is written on? Any advice from other parents who have been in this situation before?

If anyone else has taken out guarantor insurance can I ask who you went with?

I've not heard of guarantor insurance, but when we had to do this for our own DD (same reasons as you, if we didn't then she wouldn't have been able to get accommodation in her second year) we just made extremely clear in writing that we were limiting our support to our own daughter and her share of the rent only, and that we fully expected that other students would have approached their own parents/ made their own guarantor arrangements, that we would NOT be responsible for them.

The situation never arose so it was never put to the test, thankfully.

We weren't happy acting as guarantors for the whole house either so we paid our son's rent in advance.

I appreciate that we're lucky to be in a financial position to do this.

Just make sure they are not sharing with overseas students. They are never chased on default.

We also had to take that gut churning leap of faith that her flatmates were trustworthy, and would stick to their tenancy. One dropped out, but found a replacement - under T&C SHE was still liable if her replacement defaulted. (As she had signed the original tenancy.) Her parents were not happy, but it was in the agreement in black and white. All went well thankfully.

I've guaranteed my eldest twice now and it's only their rent that I have to guarantee.

I paid the rent (no student loans) and my children's father did the guarantee - he got by far the best deal of course...... As my son said recently, his friends' parents were just as well off as we are at Bristol so even if a child did not pay the parents each had very substantial assets so guaranteeing the whole house of 9 people would never have been a problem. I suppose he was right but it still feels risky. I would have preferred to pay his year's whole rent up front than guarantee everyone's. Do check the terms as student rush into these things to be like their friends are and every one my children have given me to check has been guaranteeing everyone's rent in the whole house.

We have just done this for DD for next year and the contract states that we are only guaranteeing HER part of the rent (which we are paying anyway)

Check the small print to be sure you understand whether you're guaranteeing the full monthly rent or just your DDs share - they may have separate tenancies even if they're in the same house. Also ask if other parents are also acting as guarantor(s), which would share the risk. I've done this three times for my own and twice for my nephew with no issues.

No don't take out the insurance - it's high cost and designed for people in very low incomes in place of an actual guarantor in their life. If you get it, your DD will be discriminated against by landlords in her search for a room.
Make sure you have the names and contact details of all other partners who share the guarantor responsibility

Or do this (but obviously that means your DC aren't leaning as much about budgeting)

This happened when DS1 was in 2nd year. he was the first to sign up and we dreaded signing the guarantor agreement. Then found out every other parent had refused to sign it and said they would only be responsible for their own child's portion of the rent and had the contract amended. So, it's worth querying it and asking for an amendment.

We only guaranteed for our children rent.
Unfortunately one child came home after first semester so we had to pay for the rest 😪

it's not actually about the DC's budgeting though @LostittoBostik

By acting as guarantors the parents could be on the hook for the full, combined rent for the whole house, should one/all others don't pay their rent.

I queried this with my DS's contract so called the agency who confirmed I was guaranteeing my son only.

It depends on the wording of the guarantee and the underlying tenancy agreement. One guarantee I signed said I was guaranteeing the obligations of my DC but when I read the tenancy agreement my DC was under an obligation to pay rent of other tenants if they defaulted so I was indirectly guaranteeing whole house. I took out insurance as didn’t know the flatmates but fortunately didn’t have to use it. I used Only my Share.

@beetr00 I know, my point was that if you pay your DC rent in full they don't have to manage paying it themselves, which might be a downside to that alternative

this is true for @QueenOfToast but not so for the OP @GinaDreamsofRunningAway 🌻

That is a different type of insurance. A company called Housing hands will, for a monthly fee be the guarantor if the student has no one who can act for them.

Companies such as Only My Share and Guarantor Insure are different. They insure against other tenants defaulting in the case of joint and several contracts. We did take out this insurance with Only My Share The fee was £99 I felt the terms and conditions of Guarantor Insure were not worth it. It seemed more like legal cover to pursue the defaulters whereas Only My Share pay the amount you are being chased for, (there is a limit so we worked out it would cover the most likely scenario of one tenant defaulting not everyone)

My daughter did run into trouble with one housemate and we thought we were going to have to claim but the landlord decided not to pursue things.