My Tenant failed the credit checks. He has supplied a guarantor and I have started to process the details of the guarantor to be credit checked by the openrent system. Although, what I have noticed is the guarantor is being asked to cover the whole of the rent amount. Although, the Tenant only needs to cover 1/4 of the rent. has anybody else had this experience and can I change it so that the guarantor only covers the proportion that he is guaranteeing rather than the whole amount of rent that is shared by four tenants?
If you have multiple tenants on a joint tenancy they are severally (jointly) liable if one doesnât pay any of the other tenants can be pursued for the full rent.
If the rent isnât paid, you then pursue a guarantor so potentially for the whole amount. Thereâs no such thing as far as I know as a guarantor covering only part. @mod_emma or @mod_harry may be able to advise
Sounds like you need a separate AST for the individual tenant, and then a guarantor on that individual agreement. Openrent have a sample here
Source: OpenRent Assured Periodic Tenancy Agreement (APT) | Download Template
And maybe separate ASTs for each other tenant, if you or they donât understand or want them to be jointly liable
Good luck
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I dont understand what you mean by âyou have started to process the detailsâ. Once you have accepted the tenant, ask them to propose a guarantor, then just select referencing for both. Iâve just been through this system a month ago, and no where was there any system for selecing any proportion of rent.
Have you had the references back yet?
That should be the end of this story. Guarantors are not meant to pay the tenantâs rent under normal circumstances. They are there as a safety net should the tenant fall on hard times through no fault of their own.
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Failed the checks and you still want him?
@Michael6 said credit checks failed not affordability checks
What about a tenant who has a historical CCJ on their record which they have now paid off the debt for. It stays on their record (updated to âsatisfiedâ) for 6 years and they may still pass affordability but will still fail automatic reference reports because of the credit history. In those circumstances a guarantor who passes the referencing may allow RGI to be obtained and âmayâ be worth giving a chance to, if they have stable employment and a history of paying rent on time?
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What about it?
The actual post said more about the LL than it did about the T.
Youâre right it does show @Michael6 is willing to ask for help, and maybe might benefit from your advice as well as maybe some LL training.
Iâd guess this is a group of 4 who want to share a place together, as one has failed the automatic checks @Michael6 is looking at whether a guarantor can help manage the risks to his satisfaction. Otherwise he has to start again finding tenants (which may indeed be the right course of action )
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indeed⌠and I gave it.
I wouldnât take an applicant who failed credit checks. This is because the only circumstance in which I would have spent money to credit check an applicant would be if they had answered âNoâ to my vetting question âIf I run a credit check, will I find anything adverse?â If they then subsequently fail, theyâd be out of the running, no question.
Iâve had applicants admit to adverse credit and theyâve explained their circumstances. Iâve even proceeded with applications of some of these. But it would have been a waste of my time and money to pay for a credit check when I knew they would fail.
Iâm assuming Michael ran the checks on an applicant who did not tell him they had bad credit. If so, that should have been the end of this story.
I totally agree somebody who doesnât fess up in advance if asked beforehand and knows they will be checked is a red line.
We donât know thatâs what happened. @Michael6 maybe didnât ask upfront (unlike your good screening question which Iâve copied myself) in which case a tenant wont necessarily know or think a ccj for a debt paid off years ago will still show up or needs to be volunteered. Some might wait to explain not ideal I agree
If you run checks using eg homelet (and I think openrent and goodlord and other referencing companies the same) they check all of employment/income, ID, credit checks, affordability so @Michael6 may have been checking for affordability and got the credit checks anyway whether needed or not. Then canât get RGI because of a failed check even if already knew of the credit issue before, so now getting a guarantor
Anyway hopefully our discussion helps @Michael6
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Thank you all for your comments.
Just to clarify I have two reliable tenants living at the property for two years+. Although two tenants are leaving and being replaced. Discussion is for the new tenants. Both have been recommended by my current tenant as they preferred people to live with. The new tenants have just come from Ireland so I donât have any history here hence the difficulties with credit scores proof of income et cetera. One of the new applicants can provide reference and the other applicant only has an overseas reference in Ireland. My question is should I add the tenant with the guarantor under contract and not the one without a guarantor. As I see it she (being in a relationship with a named tenant) would be my tenant paying rent and the other three, are contractually bound providing me with some assurance. Having had rented since the end of the century I have always taken a view on credit scores et cetera. I have had very healed applicant who have failed a few times and had absolutely no problems. I have just taken a view perhaps naive but has served me very well. Looking forward to any comments you have on this one..
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Dont really understand what you are proposing - what you say is very unclear. Do you mean some would be permitted occupiers others not or what? How can a guarantor act as guarantor for only part of the rent- i dont think thats possible without a separate APT for that tenant.
Just ask them each how they will be paying, have them all named either on a joint tenancy or individual ASTs. Why have anyone living in your property if they arent paying and somehowc hope one wil pick up tab for them all? Makes no sense, you are running a business not a charity and not betting on a relationship for your rent (not like legally connected married couples). You need proper commitment from them.
Just because some of them would like to have zero responsibility doesnât mean you should let them
Good luck
What do the Rent Insurance people say? Let them be your guide. My view is this: if the risk isnât good enough for the rent insurers itâs not good enough for me.
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@Howard1 that is a useful filter. Worth noting that most rent guarantee insurance providers assess all named tenants, and one tenant who fails their affordability or credit criteria can make the whole tenancy uninsurable even if the others pass. So the filter works both ways: if the RGI provider will not write a policy on the tenancy as structured, that tells you something clear about the risk level.
@Michael6 for your situation with multiple tenants where one failed the credit check, I would contact the RGI provider directly before proceeding and ask specifically whether one failed check among four named tenants blocks the policy entirely, or whether they can write a policy that excludes that one tenant. Some providers will do this. If the policy is simply unavailable in any form, then the advice from David240 and tatemono about treating the failed check as a hard stop becomes much more straightforward to follow.
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