A guarantor is someone who agrees to sign an agreement (most typically a lettings agreement) and in effect guarantees that they will undertake the full obligations under the tenancy agreement on the tenant's behalf. If for some reason the tenant cannot pay the rent, the guarantor will make the payments.
This most commonly happens when a student needs to have a parent sign onto the lease as a guarantor so the Landlord feels comfortable that if the student cannot make the payments, the parents will. In the case of a lettings agreement a guarantor pays the landlord any losses, expenses or damages where the tenant fails to carry out their obligations under the lease.
With residential lettings those people who have low credit scores may be asked by the landlord or estate agent for a guarantor. There are many reasons why a tenant may have a low credit score when credit checks are carried out. These include:
If a guarantor is required then they will be referenced, just like a prospective tenant.
What happens if the gurantor does not pay?
The guarantor is contractually bound to accept the legal liabilities of the tenant and will be sued if they don't comply. In recent years there have been far more claims filed against guarantors and therefore assuming the role of a guarnator is a very serious one that should be considered very carefully.
Who can be a guarantor?
The guarantor would usually need to be a home owner with steady long-term employment if they are to meet the requirements of a good credit score to become a guarantor.
Parents of young people or students are often asked to guarantee their children's rent. Although it seems more likely that a parent can trust and therefore guarantee their child, parents need to realise that many students live in communal settings with other students. The parent who acts as a guarantor in this case is then guaranteeing all the residents of the property and not just their own child.
How do you become a guarantor?
Reference checks will look into:
Acting as a guarantor is a very serious undertaking. Think carefully before entering into long-term commitments.