Landlord told to act as guarantor in bizarre twist

Landlord told to act as guarantor in bizarre twist

0:04 AM, 7th August 2023, About 12 months ago 12

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In a strange situation, a letting agency has asked a landlord to be a guarantor for their own tenants.

This means should the tenants stop paying the rent it will be the landlord who covers their payments.

The PRS redress schemes make it clear in their conduct codes that guarantors are separate to landlords and tenants but don’t exclude a landlord from being the guarantor.

­­­Why don’t you be the guarantor?

Julie Ford, a mediator at PRS Mediation, says during a discussion with a landlord they revealed they were named as a guarantor for their own tenants.

After the tenants failed referencing checks and were unable to get their own guarantor. The agency then told the landlord that they could become the guarantor instead.

Ms Ford says: “This particular high street letting agent said to the landlord you’re a homeowner, you’ve got a great credit score why don’t you be the tenants’ guarantor?”

“You don’t pay your rent, you pay yourself it’s baffling.”

New way for letting agents to fill properties

In the viral video, Ms Ford suggested that using landlords as guarantors for their own tenants may be a new way for some lettings agencies to fill properties when tenants fail referencing and can’t provide a guarantor.

The viral video with all the bizarre details can be seen below.

@gothard.rowe

♬ original sound – Gothard Rowe


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Shinh

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9:39 AM, 7th August 2023, About 12 months ago

Absurd we were asked the same too

Ma'at Housing Solutions

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9:48 AM, 7th August 2023, About 12 months ago

This is absolutely ridiculous and the only Tenants and Landlords I can envisage this assisting, are those tenants in receipt of housing benefit otherwise of course the guarantor being the landlord too would effectively be paying themselves?!!

Unfortunately my years of dealing with letting agents gives me a fair idea as to which " high street agency" this could be. If my suspicions are correct then this " high street agency" is one of the most unprofessional and inept letting agents I've ever had cause to deal with!

I do hope some Landlords may be prepared to name any agencies which are promoting this dubious practice.
Landlords need to know about poor letting agencies and their bad / dubious services!

Rupert Chapman

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9:50 AM, 7th August 2023, About 12 months ago

This protects the agent commission in the event of rent default by the tenant. The landlord would be liable to pay the agent commission.

It may also enable the landlord to get rent guarantee insurance.

However, the insurer would fund the rent to the landlord then claim the arrears from the landlord.

Bizarre indeed.

David Smith

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9:57 AM, 7th August 2023, About 12 months ago

If the letting agent thinks this is such a great idea then why don’t they become the guarantor?

moneymanager

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10:21 AM, 7th August 2023, About 12 months ago

Why would a landlord with a "great credit rating" expose it like this, absurd? In fact, we don't take guantors, if the guarantor can pay NOW for the term, they do, if they can't their guarantee isn't worth the paper it's written on.

Nikki Palmer

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11:28 AM, 7th August 2023, About 12 months ago

This site is becoming more like a comedy script every day ....cue Benny Hill theme tune

Crossed_Swords

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11:48 AM, 7th August 2023, About 12 months ago

In this instance it would seem the landlord is not actually a guarantor but waiving the option of having one.

As for filling vacant rentals, surely that is not a problem at present?

berkstunt

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13:28 PM, 7th August 2023, About 12 months ago

Reply to the comment left by David Smith at 07/08/2023 - 09:57
Ha ha! That's a good one!
Failing that, just dispense with the Agent, as not needed.

JeggNegg

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14:51 PM, 7th August 2023, About 12 months ago

Reply to the comment left by Ma'at Housing Solutions at 07/08/2023 - 09:48
is there now or even proposed there should be a register for Letting Agents? it seems wrong that the landlord pays them a fee and then takes the risks.
if this were true would the landlord have to deduct tax on the rent paid as guarantor? and no doubt pay the high street agent their commission plus vat!

nice one
and its NOT APRIL 1st

H MD

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15:11 PM, 7th August 2023, About 12 months ago

Just stop using High Street Letting Agents.

I signed up with OpenRent many years ago and use their service to find tenants, set up and mange the tenancy. Everything is done digitally. I get to conduct viewings and decide who I want to let my house to. it costs around £50 per tenancy and £20 per comprehensive referencing. Great if you local to your properties and like to be involved.

I personally would not use a Letting Agent again. Some just lie to your face and add a huge percentage to invoices. Not all of them - just my experience.

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