When are Guarantors are needed?

During the process of starting a tenancy, a good landlord or agent will need to assess the prospective tenant(s) to see if they would make a suitable tenant - sort of like a job interview. This process is called the 'Referencing Process' and it will usually involve checking the following details:

  •     Credit check to determine any CCJs (County Court Judgements) or Bankruptcy
  •     Affordability by checking your sources of income
  •     Character as a tenant by checking with your current landlord if you have one.

On some occasions during the checks, it may be found that there is a problem or something which may put you as a higher risk. If this is the case, rather than simply refusing to create the tenancy, the landlord or agent may wish to have a 'Guarantor'.

A Guarantor is someone who is willing to vouch for the tenant(s) should a problem arise, and usually it would be concerning rental payments. For example, if the rent wasn't paid on time, it would be the responsibility of the guarantor to make a payment on behalf of the tenant. In most cases, guarantors are never contacted or used, but they act as a safety net for the landlord in cases where the risk maybe higher in granting a tenancy to an individual.

A person wishing to be a guarantor for someone will also need to be referenced in the same way as a tenant would be referenced. This process can seem quite invasive, particularly as it isn't them who are wanting to move into a property! Nevertheless, it is a necessary step which must be taken so the landlord can be sure they have done all that they can to minimise their risk. A Guarantor will need to own their own home and they must be able to show they earn a sufficient income - your landlord or agent can notify you of what that threshold is as it would depend on the amount of the rental payment.

A Guarantor is created by signing a guarantor agreement (Deed of Guarantee) and must remain the guarantor for the duration of the tenancy. The clauses they would be expected to comply with are as follows:

  1. The Landlord has agreed to allow (the "Tenant") to reside at the property upon the terms and conditions of a tenancy agreement (the "Agreement")
  2. The Guarantor agrees to comply with the terms of this Deed of Guarantee and ensure that the Tenant complies with the terms of the Agreement. 
  3. The Guarantor further agrees to fully compensate and indemnify the Landlord in respect of any loss, damage, costs or other expenses arising either directly or indirectly out of any breach of the Agreement or due to the Landlord's decision to allow the Tenant to occupy the Premises. 
  4. This guarantee and indemnity extends to any renewal, extension, or continuation of the Tenancy, whether fixed term or periodic, and includes any increase in rent or any other variation of the Agreement agreed between the Landlord and the Tenant irrespective of whether the Guarantor agrees to that increase of variation provided that the Guarantor is given written notice of the increase or variation within 14 days of it being agreed. 
  5. This Deed of Guarantee is irrevocable and shall continue beyond the Guarantor’s death or bankruptcy throughout the period that the Premises are occupied by the Tenant or any guest, visitor, occupier, or licensee permitted to reside their by the Tenant and is not limited to any initial fixed term specified in the Agreement. 
  6. If the Tenant abandons or vacates the Property, breaches any part of the Agreement, or the Tenant is declared bankrupt and the Tenant's Trustee in Bankruptcy elects to disclaim the Agreement then on written demand the Guarantor will compensate the Landlord for all losses, claims, liabilities, costs and expenses arising from that event including the rent for the remainder of the originally agreed term of the tenancy or the period until the Tenant could have legitimately brought the tenancy to an end under the terms of the Agreement or any common law or statutory notice period. 
  7. The Guarantor's liability under this Deed of Guarantee and the Agreement will be joint and several with the Tenant. The Landlord may seek to enforce obligations and claim damages against the Tenant, the Guarantor, or both of them under the Agreement and this Deed of Guarantee. The obligations of the Guarantor will not be waived, nullified or reduced by any act, neglect, leniency, generosity, or allowance of time to comply given by the Landlord to the Tenant. 
  8. If the Tenant surrenders any part of the Premises the Guarantor's liability will continue for the part not surrendered. Any liability accumulated at the date of surrender will continue unaffected. 
  9. The Guarantor's liability shall continue if the Guarantor is a company and the company changes ownership, alters the name of the Guarantor, or is amalgamated with any other company or organisation throughout the period that the Premises are occupied by the Tenant or any licensee. 
  10. The Guarantor will pay any reasonable costs of the Landlord in enforcing this Guarantee and the obligations of the Agreement. 
  11. If the Tenant forms more than one person the Guarantee will not end or be invalidated if one or more of the original persons forming the Tenant abandons the Premises or surrenders their interest in the Tenancy provided that at least one of the persons forming the Tenant or their licensees remains in possession.