Hello,
Prospective tenant has provided a guarantor and I’ve initiated the Open Rent reference checks for both the tenant and the guarantor. Tenant and guarantor seem respectable and genuine. Guarantor is a homeowner in the UK and has been in the property for 20 years with her husband (I’m assuming her name is on the property but don’t know that). Guarantor is not related to tenant but was her tutor and has been her guarantor on previous accommodation. Concern is that the guarantor’s income is very low - she does private tuition and earns less than £10k. She has passed all the credit checks (no CCJS, no IVAs etc) and come up as low risk on the referencing. I’m planning on giving her a call to confirm if she understands that she is signing to be legally responsible should tenant fail to pay. What other questions are reasonable to ask? Should I ask for evidence of savings that would cover it? Evidence that she is joint homeowner etc?
My gut feeling is that tenant will be good and trustworthy, but new to this so appreciate advice. Related question - if tenant fails to pay, at what point, and how, do I contact guarantor and ask them to pay?
Many thanks for your time & advice.
Marisa
If you ever need to sue the guarantor, she will claim she has minimal income and you will be awarded about £10 a week. You can’t do an attachment of earnings with self employed people. However, if you have confidence in both of them, this issue needn’t be a barrier.
Personally, I would never accept a guarantor that can’t cover all their own expenses as as well as the rent they might owe me. Must be UK resident with provable assets in the UK. Consequently, the pool of acceptable guarantors is small. Generally, I try and avoid having one as unless you get the set-up of the guarantee bang on, its worthless.
Thanks for your reply
Thanks for your reply. If we did go with this guarantor, the set up would be through the standard Open rent contract (I’m a newbie to this!!), I’m hoping that this would be exactly as required…
Tenant has said that if we reject her current guarantor, she can ‘buy’ a guarantor from a website - was advised this was available from her former student union. Said it would cost her about £100 / £200 but is happy to do that if we require. It sounds like a sort of insurance she would be buying. Has anyone heard of this & is it fairly common now?
Never heard of this one before. Also, eagerly waiting for replies.
I’ll start a new thread on this topic…
This isn’t like a true guarantor, needs renewing as a service.
For the tenant I’m considering, our concern is whether she can afford it. We’ve had discussions and she is insistent and confident that she is good at managing her money, has savings and can cover it herself. If she manages to do so over a 12 month period then I’d be confident she could continue to, it’s really the initial 12 months that I’d be the most concerned about.
Rent guarantee insurance is another option.
It’s interesting to see how many landlords will accept a tenant who they feel needs a guarantor. I worked in the lending industry most of my life and found 99% of guarantors to be a waste of our time. If you feel the tenant is a risk or may struggle to maintain rent pmts why would you consider them at all. Guarantors rarely stump up for the tenant. Of course if they are in FT employment or have assets you can eventually get money out of them but is this what you want to be considering really?
Considering her because she is very polite, respectful and have confidence that she will look after the property and that we can have a good tenant/landlord relation. Concerned about affordability for her but she is convinced she can manage her money and has shown us bank statements with reasonable savings. We’ve asked for a guarantor, mostly because I’m new to this and I thought it was the done thing?
Marisa, another thing to consider will be what will happen when you’ll need to increase the rent? It’s recommended to review the rent yearly to avoid a huge eventual increase. If the applicant is hard up, how will they manage rent increase with salary freezes and costs of living rising? A bit of a tight fit, as I see it.
Here’s the thing if you are having doubts or concerns it means you’re having 2nd thoughts-it doesn’t matter guarantor or not if they stop paying rent then there’s nothing you can do by the time it’s sorted you’ve lost income & rent guarantee schemes are high cost why don’t you use an agent? Don’t forget to register with IR either because nobody gets away with that either
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