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.”
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people do sign legal documents without reading them fully or understanding them, then winge when it all goes pear shaped.
Isn't this stating the obvious. It's like saying insurance companies may have to pay out in the event of an accident. I think most people are perfectly aware what being a guarantor entails.
Been taking homeowner guarantors since 2007, but I think the thrust of this article is that the guarantor (parent) for one student could become liable for the actions of another, particularly if they are easier to find or more responsive than the defaulting students parent/guarantor. That does seem a little unfair, especially when you may have 8 students sharing.
I agree with Luke P. I think the purpose of the article is to address the potential financial risk for guarantors of Joint and Several Liability Contracts specifically, rather than just guarantor liability in general. I would say most parents who agree to be rent guarantors are aware they are agreeing to cover the rent for the specific tenant they sign the guarantor agreement of but can often not realise that, under Joint and Several Agreements, they are equally liable for other tenants they may have never met!
I agree with Luke P. I think the purpose of the article is to address the potential financial risk for guarantors of Joint and Several Liability Contracts specifically, rather than just guarantor liability in general. I would say most parents who agree to be rent guarantors are aware they are agreeing to cover the rent for the specific tenant they sign the guarantor agreement of but can often not realise that, under Joint and Several Agreements, they are equally liable for other tenants they may have never met!
I agree with Luke P. I think the purpose of the article is to address the potential financial risk for guarantors of Joint and Several Liability Contracts specifically, rather than just guarantor liability in general. I would say most parents who agree to be rent guarantors are aware they are agreeing to cover the rent for the specific tenant they sign the guarantor agreement of but can often not realise that, under Joint and Several Agreements, they are equally liable for other tenants they may have never met!
Get Real! We require working guarantors for both DSS and Student tenants and rarely have issues with rent arrears or damage. Joint and Several Liability is the stick that makes it work and frankly, any letting agent without this clause in the lease should be sued by the landlord for negligence.
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