Prospective guarantor passes credit check but does not have a UK address

by Readers Question

8:40 AM, 21st June 2017
About A year ago

Prospective guarantor passes credit check but does not have a UK address

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Prospective guarantor passes credit check but does not have a UK address

As a result of finally having run out of fingers to burn off in recent years I am now taking an altogether more pro-active stance with my letting agents at the pre-tenancy stage. In particular, I now require sight of all of the tenant provided documents as well as the full results of the credit checks before I am prepared to agree to a tenancy being created.

One of the prospective tenants for a property of mine in the north east requires a guarantor.

The guarantor appears to check out fine (indeed more than fine) and HomeLet have declared him a suitable person to be a guarantor.

The problem is, at least as I see it, that the guarantor’s address is in France.

HomeLet seem to think it is fine, but I beg to differ. The letting agent can’t understand why I am raising the issue as a problem.

Neither HomeLet or the letting agent can understand why I am not reassured by the HomeLet 12 month guarantee, simply ignoring my observation that it is the 15 month (or whatever) point that concerns me.

From my perspective the whole point of having a guarantor is so that (god forbid that it should be necessary) UK court papers can be served on them at a UK property that they own and relying on an address anywhere else in the world is foolhardy.

What does the panel recommend?

Tony



Comments

Neil Patterson

8:44 AM, 21st June 2017
About A year ago

Hi Tony,

From Citizens Advice >> https://www.citizensadvice.org.uk/housing/renting-a-home/student-housing/students-in-private-rented-accommodation/student-housing-using-a-guarantor/

"Does the guarantor have to live in the UK?

Landlords will usually want a guarantor who lives in the UK, as it's easier for them to take legal action against a UK resident if they need to.

This may present a problem for you if you're an international student, so if you can't get a UK-based guarantor, you may be asked to pay more rent in advance."

Monty Bodkin

9:33 AM, 21st June 2017
About A year ago

Why does the tenant need a guarantor?
If it is because they have no job, no history (or worse, a bad history) and no prospects then no thanks, UK guarantor or not.

The Homelet policy can be renewed after 12 months.

It would be up to Homelet to pursue the guarantor so I am surprised they accepted them.

Why was the guarantor deemed acceptable? Do they work here in the U.K.? What is their French property like? Do they own it?

It is possible to credit check the guarantor in France. It is also possible to chase the debt in France via reciprocal agreements.

But depending on the answer to my first question, all sounds too messy.

Monty Bodkin

9:43 AM, 21st June 2017
About A year ago

Reply to the comment left by "Monty Bodkin" at "21/06/2017 - 09:33":

Are the guarantors ex pats living in France with UK property, a good UK pension and a UK bank account?
That would explain why acceptable to Homelet.
Even if so, would still want to know why tenant needs a guarantor.

Dylan Morris

10:08 AM, 21st June 2017
About A year ago

I'd only take a guarantor if they were a close family relative such as mother or father. I would never entertain simply taking a friend. If the tenant fails to pay the rent, then the idea is the guarantor steps in but they must have some emotional benefit in doing so. You want them to pay voluntarily and not end up taking them to Court which is a last resort.
I definitely would not take on a guarantor who does not live in the UK for the simple reason it is very difficult to chase them legally for the debt. That's why a UK bank will only lend on an unsecured basis to UK residents.

Another issue here is why are you continuing to use these agents when you clearly are not happy with their service and have no trust in them ? I recently ditched my letting agent and decided to go back to finding tenants myself.

Opened an account with Experian and did the credit searches myself. Cost £15 plus VAT per tenant. Used Letting Supermarket to put the property on 5 online portals Rightmove, Zoopla etc. Cost £40 plus VAT. Advertised as "no tenant fees" and managed to find an excellent tenant within 24 hours. (My letting agent had only got me one useless viewing in 5 weeks !). Saved the agents fees of 75% plus VAT of first month's rent.

Stopped all the stress of fighting with the agent over which tenant I should and should not accept. Was much happier doing all the documentation myself. And the tenant was over the moon as they paid no fees whatsoever.
I'd never go back to using an agent again.

Badger

16:02 PM, 21st June 2017
About A year ago

Reply to the comment left by "Monty Bodkin" at "21/06/2017 - 09:33":

A guarantor is needed because both salaries are needed to clear the affordability hurdle re the rent.

After recent unpleasant experiences I am being much proactive in monitoring what goes on otherwise I simply would not have found out until too late.

I too was rather surprised by HomeLet on this hence my original post.

The guarantor is the father of the prospective tenant and in all other respects except his address checks out admirably and certainly he is very well setup financially. The only problem is the lack of a UK address. Having now been challenged on this by a rather reluctant letting agent I am informed that a new guarantor has been put forward so I have to presume that he was unable to provide a UK address - which surprises me under the circumstances but would appear to have vindicated my original concerns.

Badger

16:08 PM, 21st June 2017
About A year ago

Reply to the comment left by "Dylan Morris" at "21/06/2017 - 10:08":

Been there, done that, got the t-shirt back in the 80s & 90s.

These days I prefer to let the agents take the strain.

I think it is possibly stretching things to interpret a relatively minor disagreement with the agent concerned as having lost all faith and trust in them. I have used the same agent for this property for several years now and they have always provided a good service.

Many thanks for your response though. If I was thirty years younger... 🙂

Anyway, the consensus seems clear, and this certainly concurs with my own assessment: no UK address for a guarantor - just say NO!

Thanks all.

Dylan Morris

16:44 PM, 21st June 2017
About A year ago

Each to their own of course and I'm pleased it's only a minor disagreement.
It was with you saying you'd had your fingers burned several times and you were now insisting on seeing all tenant documentation and credit searches, that I thought you'd lost trust with your agent and didn't feel you were comfortable leaving them to do the job properly on their own.

Claire Smith

11:37 AM, 24th June 2017
About A year ago

We have had our fingers burnt by a French tenant. You would have to claim through an international court and complete all documentation in French. I would recommend that you find another tenant!

Badger

13:05 PM, 24th June 2017
About A year ago

Reply to the comment left by "Dylan Morris" at "21/06/2017 - 16:44":

Ah - the pleasures of the vagaries of electronic communication. 🙂

My 'fingers burnt' commented were in respect of tenants not agents and across the entire portfolio not a single property.

Half a dozen or so serious rent arrears problems in the last ten years - only one of which can an agent (not the current agent under discussion) be said to have been a contributory factor in.

Dylan Morris

13:26 PM, 24th June 2017
About A year ago

Reply to the comment left by "Badger " at "24/06/2017 - 13:05":

With frequent serious arrears problems like that no wonder you are cautious. Seems a waste of money to pay your agent then have to check all the documentation and credit searches yourself though as you don't trust your agent to do it for you. Anyway good luck ?

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