When you are renting student accommodation in the UK, you are likely to be asked to provide a rent Guarantor. This article explains what a Guarantor is, why they are required and how to provide one.
What is a Guarantor?
A Guarantor is a person, company or organisation that agrees to secure or ‘guarantee’ somebody’s tenancy agreement or contract. The Guarantor effectively takes on many (or all) of the commitments that the main party to the tenancy agreement is taking on. In other words, if a student signs a tenancy agreement, the Guarantor will be responsible for fulfilling many of the terms of the agreement if the student does not.
The main obligation that the Guarantor is taking on is rent. What this means is, if you don’t pay your rent, the Guarantor will be required to pay it. Depending on the tenancy agreement, it can also mean that the Guarantor is liable for any other costs, such as damages and even the rent due from other occupants of the property who are on the tenancy.
It is quite common in student accommodation to be asked to provide a guarantor.
Who can be a Guarantor?
In short anyone who is considered eligible by the landlord who owns the property or the agent who is managing the property on behalf of the landlord. There are no hard and fast rules here, as different landlords and agents will have different criteria, as to what is acceptable to them.
Some of the more typical requirements are;
That the guarantor must be UK based.
This is a fairly standard requirement and is normally because the landlord wants to be able to properly assess the Guarantor’s financial credentials and to reduce the potential legal complications of making a claim against the Guarantor.
The guarantor must be able to meet their obligations.
It is often required that the Guarantor can demonstrate that they are able to meet the obligations they are taking on. From a landlord’s perspective there is little point in having a Guarantor that is unable to meet these obligations. This can mean that the Guarantor needs to own a property or prove that they earn a minimum amount of money.
It does not have to be a parent or family member.
It is not necessary however for the Guarantor to be a parent or family member. It can be anyone who is prepared to be the Guarantor and who meets the criteria required by the landlord or agent. In the case of most students it does tend to be a parent or family member, because they are the most likely to accept the substantial financial commitments of being a rent guarantor.
Why are Guarantors required?
In the student accommodation market, Guarantors are required because there is very little information available to the Landlord about a prospective student tenant.
In the UK, when a Landlord rents a property to someone it is normal for them to conduct a detailed check on that person before renting to them. This might include references from previous landlords and a detailed financial check.
For the majority of students this is not possible, as this will be their first time away from the family home and they will not yet have acquired a credit history. In the absence of this background information, which the landlord would typically use to make a decision about who might make a reliable tenant, they turn to a Guarantor to protect their position.
This provides the landlord with an extra level of re-assurance – a ‘guarantee’ – that the terms of their tenancy agreement will be met and in particular the rent will be paid.
Is a Guarantor always required for student accommodation?
In short no, they are not. Most University owned accommodation will not require a Guarantor, although some do with Liverpool John Moores University being a prominent example https://www.ljmu.ac.uk/discover/your-student-experience/accommodation/faq .
In addition most student accommodation will not require a Guarantor if you pay all or a significant proportion of your rent upfront. This is because by doing that you are removing a large element of the risk so there is nobody required to back up that risk. This is often the requirement for International Students, who in most cases will not have access to a UK Based Guarantor.
Some private landlords operate on a more flexible basis. So if a property is still available in August, they are less likely to be concerned with a Guarantor or receiving full payment of rent upfront and more concerned with filling the property before the September start of term.
There are also some types of accommodation providers who are a bit more flexible. Companies like studentroost.co.uk do require a guarantor, but have less stringent requirements of that Guarantor. For example, they will not require that person to be UK based.
Being a Guarantor
Offering to be the guarantor is a substantial commitment. It is important to consider very carefully if you are prepared to take on this role. Keep in mind that you are effectively becoming liable for the rent on the property, as well as any other commitments you are required to make – damage for example. Many guarantor agreements are heavily weighted in the favour of the landlord and can be open ended, for example if a tenancy become periodic (after the fixed tenancy period has ended).
Of course many are prepared to take on such a commitment because it is typically their son or daughter they are acting for. In most cases Parents are happy to take on the onerous responsibility of being a guarantor because it is for their child.
As a further complication, be aware that some tenancy agreements are joint. Joint tenancies are more typical when students are sharing a house and it means that each tenant in the property has exactly the same rights and responsibilities.
The complication can arise as a guarantor if one of the group of students does not pay their rent. Technically, if this student and their guarantor does not pay then the remaining students and their guarantors are liable. It is therefore, important to be clear about what type of tenancy agreement you are committing to.
How to secure a guarantor if you don’t have one.
There are a number of circumstances in which you might find that you do not have access to a UK Guarantor, but you do need one;
- Your potential Guarantor does not meet the criteria of the landlord or agent
- You do not have anyone who is willing to be your Guarantor
- You are moving to the UK from overseas and your accommodation requires a UK based Guarantor
- You are unwilling to pay a large proportion of your rent in advance
In such a case you can use a company to be your Guarantor. UK Guarantor is a company which has been set up to act as Guarantor to students who don’t have an access to a Guarantor.
Students are able to purchase the service for a fee of £249, and UK Guarantor are then able to act as the Guarantor to the student in the similar way that a standard guarantor would. This means that the student is sign a tenancy agreement and move into their accommodation in the same way as any other student.
The majority of student accommodation will require a UK Based Guarantor, as the landlord or agent of the property seeks to minimise the risk of renting their property to a student that has minimal credit and renting history.
Being nominated as the Guarantor on a tenancy is a considerable responsibility, with a variety of criteria in place. It is particularly important to think about these commitments on a joint tenancy where you are in effect taking joint responsibility for the tenancy.
There are alternatives available, which includes Guarantor companies, such as UK Guarantor.com which have been set up to act as Guarantor to students who do not have access to a Guarantor.