New streamlined procedures that make it easier for landlords to use a High Court Enforcement Officer (HCEO) to evict residential tenants came into force on 23rd August 2020.
A guarantor is an individual who is agreeing to pay the rent if the tenant defaults on payments. Guarantors can often be necessary when renting to students or those in part time or low paid work, but any landlord can ask for a guarantor agreement if they feel there might be an element of increased risk taking on a tenant or the tenant doesn’t pass the credit checks the landlord or their agent has in place.
The guarantor must always see the tenancy agreement before signing, so if you are including it in the tenancy agreement it isn’t a problem, if you have a separate document then you should attach it to the tenancy agreement.
The guarantor needs to be in writing and many guarantees are made by deed, this means the agreement is signed by all parties and the signatures are witnessed. This means that the signatures cannot be forged by the tenant to gain the tenancy of the property.
Who can be a guarantor?
A guarantor is often a family member of the tenant, but this doesn’t always need to be the case. Anyone can be a guarantor, but the guarantor will often need to fulfil the following requirements:
- Be a homeowner
- Prove they earn 2.5 x the monthly rent
- Have a good credit rating
- Be a UK resident
When does the guarantor agreement end?
The agreement ends when the fixed term tenancy ends. The agreement can be extended beyond the fixed term, but this must be agreed with the guarantor, as they may wish to not continue as guarantor after the fixed term has ended.
If there is any change to the rent or to the terms of the tenancy agreement, then the guarantor agreement becomes unenforceable.
Guarantor agreements offered by companies
There are companies offering a rent guarantor service, these rent guarantor services typically charge the tenant a one-off fee equating to 3-4 weeks rent.
University guarantor schemes
Some colleges and universities offer rent guarantors schemes for their students: the student tenant will need to apply for this.
If the tenant falls into arrears, then the responsibility to pay the rent falls upon the guarantor. If the guarantor doesn’t pay up then the landlord may obtain a County Court Judgment by submitting the relevant evidence, such as the signed deed.
This CCJ can then be transferred up to the High Court and the enforcement process can begin once you’ve obtained the writ of possession.
David is an authorised High Court Enforcement Officer and our Director of Corporate Governance