Who can be a guarantor?
A guarantor is a third party, such as a parent, close relative or family friend, who agrees to pay your rent if you are unable to pay, or don’t pay. Your landlord/letting agent can ultimately take legal action to recover any unpaid rent from your guarantor.
Your landlord may want to check that your guarantor is able to pay the rent in the same way that they’ve checked your ability to pay, for example, by carrying out a credit check. Administrative work undertaken by the landlord on this should not involve you or your potential guarantor being charged any fees. These additional fees are considered unlawful premiums in Scotland according to housing legislation.
A legal agreement sets out the guarantor’s legal obligations and this usually has to be signed by the guarantor.
Is a guarantor only liable for unpaid rent?
In many cases, a guarantee agreement extends to other conditions under the tenancy as well as rent due, for example, any damage caused to the property, or cleaning costs at the end of a tenancy. If you are asked to pay for the damage, as the tenant, but you don’t pay it, the guarantor could be asked to pay it instead.
Does the guarantor have to live in the UK?
Not all landlords/agents require a guarantor but if they do, landlords will usually ask for a guarantor who lives in the UK as it’s easier for them to take legal action against a UK resident if they need to. There are reciprocal agreements within Europe for court orders to be enforced. This may make it more reasonable for a landlord to accept a guarantor within Europe, but of course they are not obliged to agree to accepting a guarantor residing outwith the UK.
Guarantors of tenants who live in shared accommodation
If you share accommodation with other tenants under one tenancy agreement, that is, a joint tenancy, it’s common for the guarantee to apply to the whole rent and not just your share of it. In the same way, if the landlord wants to evict one joint tenant they must also end the agreements with all the other joint tenants.
It’s best to check the guarantee agreement carefully and ask the landlord or agent any questions if something is unclear. As soon as the agreement is signed, the guarantor is bound by its terms and conditions. It is usually possible to draw up an agreement that specifies one person’s rent for a specific time period to limit the amount that is being guaranteed. You should make sure that the guarantor agreement specifies the exact amount to be guaranteed. For example, if your portion of the rent is £350 per month for a period of 12 months, the amount to be guaranteed should state this as such, a total of £4200.
Many guarantee agreements for joint tenancies may imply that one guarantor could potentially also have shared liability. In other words, a parent may not only be liable for the rent of just their own child, but the flatmates as well. In which case, the guarantors should ask to negotiate separate agreements where possible.
You might also want to keep in mind that someone acting as your guarantor can take out a specific guarantor insurance policy. As we highlighted in the above section (in relation to being in a joint lease), it may be the case that your guarantor is expected to cover the cost of any flatmate not paying their rent, leading to a high liability. Many insurance companies out there offer this product, so search for ‘guarantor insurance’ and look into these if you feel you need this additional security.
Checking the guarantee agreement
You must check any guarantee agreement carefully so that the guarantor knows how and when their liability ends. You may want to ensure the guarantor’s liability is limited. For example, this can be done by specifying the start and end dates the agreement applies to.
Advice for guarantors
If you are approaching your prospective guarantor, such as your parent/guardian, relative or family friend, you should ensure that they understand what their obligations are going to be.
It is advisable to thoroughly check the tenancy agreement before they act as guarantor. It is important that they know, as guarantor, what the tenant’s obligations and duties are to maintain the tenancy. These obligations should be covered in the tenancy agreement.
Guarantors should always seek legal advice before organising or becoming a guarantor. Their own bank may be able to provide them with a standard guarantor agreement.
What if I cannot provide a UK guarantor and my letting agent/landlord won’t accept one from my home country?
First of all check to see whether you might be eligible to apply to the University Guarantor Scheme (see below).
Some EU or international students are asked by their landlord to pay several months’ rent in advance as a way of getting around the problem of providing a guarantor. However, obviously, before you consider offering substantial sums of advance rent to your prospective landlord/agent, you would have to think very carefully and always check that the landlord/letting agent is legitimate. Also, you would have to calculate whether the extra amount to pay is a reasonable sum or even affordable.
Some things to watch for would include ensuring that the accommodation is suitable for you to live in, in an area that you feel comfortable in, and easily commutable distance, confident that the service offered by the landlord/letting agent is professional, that is not fraudulent or a scam, and that the landlord/letting agent are fully registered and the property is HMO compliant where more than three unrelated tenants live together.
University Guarantor Scheme
The University of Glasgow’s Financial Aid service operates a Guarantor Scheme for up to 50 students per year. The scheme aims to help overseas students, care-experienced students, students who are refugees or asylum seekers, and students who are estranged from their families, and therefore don’t have a UK guarantor. The detailed rules for who can apply to the University of Glasgow scheme, including the types of information you need to provide in order to apply, can be found on the Financial Aid website.
Professional guarantor services such as Housing Hand and UK Guarantor
Some international students are being asked to agree to professional guarantor schemes in order to pay their rent by instalment. Using the professional service incurs fees. The SRC believes the fees involved may be unlawful (known as ‘premiums’) in cases where use of the scheme is a condition of getting the tenancy, so please contact us if you have been asked to do this.
If you choose to use a professional guarantor service without any pressure being put on your by your landlord, then this would not count as an unlawful fee. However, please ensure you find out in advance what the fee will be, how much you will receive back at the end of your tenancy, and any other terms and conditions. Always make sure any agreement is in writing.
For more information about things to watch for when seeking accommodation please see our other accommodation advice pages, including 10 Tips to Avoid Housing Scams.
You can contact the SRC Advice Centre with any enquiries.