Young people, particularly students, are increasingly required to provide guarantors when they rent a property, ensuring that if they default on the rent, landlords can pursue the guarantor for the unpaid sum.
For landlords, it provides an insurance against loss of rent, but parents acting as a guarantor should check the tenancy clearly to avoid potential pitfalls.
Under ‘joint and several’ tenancy agreements, for instance, all tenants and their guarantors are equally liable for each other’s obligations under the contract. So if a tenant in shared accommodation fails to pay the rent, the other housemates and guarantors included in the tenancy agreement are liable for the rent arrears.
Jeremy Robinson, managing director of Only My Share, which provides rent arrears protection for tenants in shared properties, said: “With rising living costs, students in shared accommodation are increasingly at risk of a housemate defaulting on the rent. This could lead to rent arrears which have to be covered by the other tenants in the property.
“If parents have become a guarantor in a shared tenancy agreement, they could be left with a massive financial liability running into thousands of pounds.”