Updating post from Reddit.
A family member is moving to a new rental property (moving from England to Wales in case this is relevant!) and has been asked for a guarantor as their partner who will also be on the rental contract does not currently have a job. Family member is financially sound to cover rent for them both.
I've been sent the agreement and in principle knew I was potentially on the hook for the entire rent for the while year in a worst case scenario (yep, I know finances and family don't mix but I trust them). However, the agreement has no liability cap for the guarantor and also has a typical rolling contract added on after the 1 year fixed term is up. It states that in signing as a guarantor I can not revoke my guarantor status for any reason, even if the contract holders leave the contract (I have to get a new guarantor signed up for any new tenant!) and my liability is uncapped to include any damage to the property during that time, whether it is accidental or not, or caused by the contract holders or not! This seems wild to me!
Im planning to go back and ask for a cap, say 2 x the rent, but should I also be stating I do not agree to lack of ability to revoke my guarentor status even if the person I am guarentor for ends their contract?
My family member is stressed if I push back they will lose the property as it's in a competitive area, any advice much appreciated! I want to make sure the landlord feels comfortable but not agree to unlimited liability.
You're also taking on liability if they trash the place and cause damage beyond the depot. The logic being that the guarantor has good credit, whereas suing the tenant is pretty pointless if they don't have the money. Also might be a 12m contact, but that doesn't mean they leave after the year or when asked
You've very much got to trust that the person you're guarantoring is a reasonable, stable and careful person who will talk to you if there are problems
If caused by the tenant or not - is it a whole flat tenancy? If whole flat, then they're basically saying you're liable for subletting, and if it's a share they don't want to deal with arguments about who did the damage
Thanks for this, it is a whole flat tenancy.
I completely understand the landlord needs a level of protection, my worry is there is this catch all clause that states any damage to the property irrespective of whether caused by the tenant falls to me under the contract length, but then does not give me any opp to remove myself from the contract even where my family member ends the contract in an allowable way.
So if there was a storm that created structural damage, I would be liable - is that genuinely typical terms for guarantor? Would the landlord not have their own buildings insurance for something like that?
Storm damage, not your responsibility, but if a mate of the other tenant or a person that gatecrashes a party the other tenant is throwing shits in a bed or torches the sofa - its on you
If you aren't willing to pay for nearly everything in a worst case scenario - don't do it.
Just to clarify a few points. Unless the agreement is very different to the one we use, the structure of the building is covered by the landlords insurance, so are certain items inside.
What the guarantor signs up for is any unpaid rent and any damage to the property which is beyond normal wear and tear (you can look up what’s wear and tear)
Where your problem occurs is with your relatives partner. If the relative moves out and the partner doesn’t, you would still be liable. I’m guessing you would also be liable if the landlord gives them notice and they don’t leave. Then you might have court and evictions costs as well.
Not something to take on lightly, it can go into many thousands.
Without a guarantor they will find it hard to get a home. My rental insurance insists on it in most cases and I won’t rent if I can’t insure.
>any advice much appreciated
Don't do it. Yes, it's tough on the family member, but as you've identified you're on the hook for a potentially unlimited sum for an unlimited time. It's also technically a liability for yourself should you be looking to take out credit - i.e. you would have to declare it. If your family member needs a guarantor, they should investigate companies that provide the service for a fee.
One extra thought:
>Family member is financially sound to cover rent for them both
_currently_ - if they are moving from England to Wales, does that involve a new job...? With a probation period...? Anything could change at any time, and when it does, your liability steps in.
In certain situations, such as student lets, it's very normal.
As it get harder and harder to evict problematic tenants, protections sought by landlords get more burdensome.
Also remember the new law, if it comes in during your tenancy, will unfix your 1 year fixed agreement.
2x the cap defeats the purpose of a guarantor. If they don't pay rent for a year and also trash the place you're as liable in court as they are.
There were firms that provide rent guarantor insurance (it was quite common for students) so maybe have a look around today to see if you can get cover for yourself as a guarantor. Your family members can of course pay the premium for you….its the least they could do. This is not to be confused with rent guarantee insurance which is what LLs take out to cover themselves in the event tenants stop paying.
Im not up to date with this, but its certainly worth having a look for and if available, should give you some protection.
Can you post it here and remove private details?
As landlord I’m going to require a guarantor. Now reading your issue makes me think your relatives have had financial issues elsewhere.
Propose the cap you’re comfortable with and see if the landlord agrees. If they don’t then be ok with your family members having to find another solution.
Keep in mind the landlord can only come after you for reasonable costs, damages will be less normal wear and tear and you’ll only be on the hook for unpaid rent for any contract obligated months, for the fixed term and once it goes rolling then it’ll be for each month of occupancy.
Like a tenant would should the landlord seek rents or damages from you seek advice and if you disagree take it to arbitration or court if you have too. Court cost the landlord and they’ll make a lot of demand that will evaporate once they have to go to court.
Speaking from personal experience: if a landlord has legal insurance, you can be sure a specialist law firm will relentlessly pursue you for any amount owed - and they won’t give up.
Most landlords give up before going to costs a solicitor. It’s a sad fact of the industry. Plus the solicitors can only go what’s owed and the court will decide if that’s reasonable. My experience is the court or arbitration often cut the bill down to size.