Guarantors are often requested in several different circumstances when it comes to renting a property. Both landlords and letting agents can request guarantors if they believe it is necessary to do so.
In this article, we’ll explain what a rent guarantor actually is, and discuss in which situations one might be needed or requested.
What is a rent guarantor?
As the title suggests, a rent guarantor is the person or company that is responsible for paying the rent on behalf of a tenant who is unable to pay. Despite not always being common knowledge, a rent guarantor doesn’t have to be an individual person, it can also be a company, charity, or other institution. Most commonly however, a rent guarantor tends to be a parent or another family member.
Having a rent guarantor acts as a safety net for landlords, as it ensures they will continue to be paid rent even if the worst happens and a tenant is unable to pay.
What is a rent guarantor liable for?
Of course, rent guarantors are liable for any unpaid rent by the tenant. However, in certain scenarios, tenancy agreements may go beyond only holding rent guarantors responsible for missed rent payments. Some tenancy agreements may stipulate that guarantors are also liable for other conditions, such as property damages and charges.
It’s always essential that tenancy agreements are read and checked carefully before being signed off, as you need to know exactly what is being agreed in the contract. This way, you’ll be certain of what a rent guarantor is liable for in your individual situation.
What circumstances might require a rent guarantor?
There are a few different situations in which a landlord or letting agent may request a guarantor. It’s common for students to be asked to provide a guarantor whilst renting, as they are usually unable to work full time whilst studying. Other cases in which tenants are often asked to provide a rent guarantor include the following:
- First time tenants
- When a credit-check result isn’t as strong as the landlord hopes, and they would like the additional security.
- Private rental sector tenants who rely on housing benefits to make up some or all their rent.
The situation isn’t exclusive to these scenarios however, and a landlord may ask for a guarantor whenever they believe there is a risk that a tenant may be unable to pay the agreed rent at some point down the line.
Who is eligible to be a rent guarantor and what checks can they expect?
Whilst there isn’t a specific set of criteria someone must meet to be eligible to be a rent guarantor, it needs to be someone actually capable of paying the rent if the tenant is unable to.
Most commonly, the role of rent guarantor falls to the parents of the tenant or another close family member. It needs to be someone that is comfortable with acting as a guarantor, and is happy to foot the bill of the tenant. A credit check will often be performed on the guarantor, to ensure they are able to pay the rent should the tenant fail to do so.
In addition to parents and family members, very close friends or family friends may agree to be guarantors. In certain circumstances, companies can act as a guarantor on behalf of tenants, offering a service that benefits both tenants and landlords.
Whilst a guarantor is not required in every scenario, it’s sometimes the case for first time renters that they will be asked to provide one. If this applies to you, it’s hopefully the case that you’ll never need to rely on the guarantor, but it’s no surprise that landlords ask for them in certain situations.