Can a guarantor change during a tenancy?
This is unusual and is only usually agreed where a replacement guarantor is found who passes the referencing process.
When does a guarantor stop being a guarantor?
A guarantor's liability usually continues until the tenancy comes to an end and the tenant vacates. If the tenancy has a fixed term which renews, the guarantors obligations will usually continue into the extended term and until the tenancy eventually ends.
What if the tenant can’t provide a guarantor?
If a tenant doesn’t know anyone who meets the criteria needed to be their guarantor, there are other options. One option might be a guarantor service, where the company offering the service becomes the tenant’s legal guarantor. In return, the tenant pays the company a certain percentage of their annual rent.
Being a guarantor
Now moving on to questions that you may be asking yourself about if you’ve been asked to be a guarantor.
Is it risky being a guarantor?
It’s important to know what being a guarantor entails, including any legal implications. Being a guarantor often involves a high level of trust and, as a guarantor, you must accept the likelihood that you could be covering the cost of a tenant breaching the terms of their tenancy, which carries a certain level of risk, depending on your income. For this reason, it’s important to fully understand the liabilities involved and carefully read the agreement before signing it.
Does being a guarantor affect my credit rating?
You’ll typically find that landlords and agents will complete a credit check on the named guarantor to ensure that they are able to cover any rent arrears. This will usually be a ‘soft’ credit check, which will not impact your credit score. Read more about credit scores and what could affect them here.
How long is a guarantor of a tenancy liable for?
As a guarantor, you should check the agreement between you and the landlord carefully, to ensure you know when your time as guarantor ends. Typically, this will be for the duration of the tenancy, including any extension, renewal or continuation. If you would like to stop being a guarantor, you must come to an agreement with the landlord. Landlords are unlikely to agree unless either a replacement guarantor can be found or the tenants' financial situation has improved to an extent where they meet the referencing criteria.
This article provides a general guide to what can be a complicated matter, and is in no way exhaustive in terms of options and considerations. Anyone contemplating being a guarantor should ensure they are clear on their obligations, be prepared to pay when required, and seek legal advice if they are at all unclear.