A guarantor is a person who will pay the bill if you cannot. They are usually a close friend, a parent, or another family member. A guarantor could be referenced and be required to prove income to stand as a guarantor.
In a tenancy agreement, the guarantor will likely be responsible for both rent and damages. So, it’s vital that the tenant and guarantor talk, agree, and understand their liabilities and the AST. They must understand the contract points out what their obligations are.
Typically, a guarantor will be liable for everything the tenant would be in the joint and several contracts. That can mean that the guarantor could end up paying a sizeable bill (For more information on Joint and Several, please see our Wizolde explains Joint and Several post). Most landlords and agents would never try to recover all of the cost from one guarantor. However, the law shows they would be perfectly entitled to do so if they chose to.
It is for that reason that most landlords will insist that everybody has a UK based guarantor. If they don’t, they must pay rent in advance, often six months or maybe even the full year. That is to protect the tenants and guarantors, who are liable for the unpaid monies should a tenant without a guarantor not pay. Furthermore, it is impractical to pursue a guarantor overseas for rent and damages.
When a group of students asks if one of their group can proceed without a guarantor, perhaps they don’t always understand what that means to them. It is, in fact, themselves & their guarantor that will end up running the risk. Not the landlord or the agency.
If you are forming a group with someone who doesn’t have a UK based guarantor, it’s imperative to have that discussion with them and your guarantors first. Everyone should understand the issues and what options and alternatives are available to them. You should know the implications and risks should you decide to proceed without a housemate having a UK based guarantor.
Top tips:
Understand what a guarantor is and discuss with your group how you do so with someone who is an overseas student or does not have a UK based guarantor.
Explore options with the landlord if you are without a guarantor. They may have a scheme that would enable you to obtain an agency, university, or insurer to act as your guarantor.
Remember that everyone should have secured their finances to be able to study, especially those from overseas. Overseas students should have the money set aside to pay the rent in advance, and all parties should consider why them not paying rent in advance is not agreeable, before putting UK resident guarantors as risk.