Replacement guarantor?

Replacement guarantor?

10:24 AM, 4th January 2023, About A year ago 14

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Hello, We rent a house to a young family who have been tenants for 2 years. At the time we asked for a guarantor, which they were happy to provide by way of a family member.

The tenants are now saying that they have had a fallout with the guarantor and would like them removed from the agreement.

They have said they’re happy to provide a new guarantor if necessary.

We would like to keep a guarantor as extra security in these ‘financial crisis’ times, especially as only one of them are now working as the wife has decided to give up her job to be a full time stay at home mum.

I would like to know if it’s just a simple procedure of referencing a new potential guarantor which would then replace the previous one, or if it’s a bit more complicated?

Thank you,

Ashleigh


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Comments

Ian Narbeth

11:11 AM, 4th January 2023, About A year ago

Check that your guarantee covers the tenancy going periodic so that the current guarantor will remain liable. If you are unsure, get qualified advice e.g. from NRLA if you are a member.
If the guarantee endures then the safest thing is not to agree. As they say "No good deed goes unpunished". Unless the replacement guarantor is substantially richer than the current one, there is little or no benefit to you.
Try to find out the reason why they have fallen out. Forgive me for being cynical but if the tenants are in financial difficulty the guarantor (and they) may be working to get the guarantor off the hook.
If you do agree to a substitute guarantor, you will need to reference them thoroughly. Insist on a UK home-owner. You might also ask for the deposit to be increased to 5 weeks' rent, especially if the rent has been reviewed.
It is tricky to recover the cost of credit checks from the tenant so perhaps you increase the rent (and deposit) by a few pounds. Make sure the new guarantee is properly executed as a deed. Unless you know exactly what you are doing, do not accept digital signature of the guarantee but insist that the guarantor and a witness meet with you to sign in your presence.

Ashleigh

11:34 AM, 4th January 2023, About A year ago

Reply to the comment left by Ian Narbeth at 04/01/2023 - 11:11
Hi Ian. I used the nrla forms for the guarantor and it does say it’s for the duration of the tenancy and including the periodic period after the fixed term. I’m also a cynical person and I don’t really know why they would want to change it unless they are having difficulties financially. As far as I’m concerned as long as they pay the rent there would be no need for the guarantor to become involved! Thank you.

Robert M

11:39 AM, 4th January 2023, About A year ago

Exactly what Ian Narbeth has advised.

The only addition I might add is, if you do agree to a new guarantor, then make sure this is in place BEFORE releasing the previous guarantor from their liabilities, AND to get photos or video of the new guarantor signing the Deed of Guarantee (in the past I've had guarantors denying it was them that signed the guarantee, and as I had no photographic or witness proof to the contrary, the court accepted the guarantor's lies).

Susan Bradley

11:56 AM, 4th January 2023, About A year ago

I think it is a ploy to get around the fact that they might be after Housing Benefit and some landlords might not be keen to accept it. I say this because it has happened to me several times. They go in with a guarantor, after several months the guarantor steps down but there are no issues with the rent. This is because they are on HB but if they told you that at the start you might not have accepted them. One person I had was fine for years and then stopped paying the rent to get an eviction notice but promptly paid all the arrears as soon as they got the eviction letter. I gather it is so that they qualify for Social housing that way but can't get it if they have arrears. The Bailiff told me it was very common and he sees it all the time.

Seething Landlord

13:52 PM, 4th January 2023, About A year ago

Does there need to be consideration for the guarantee to be effective? If so, what would that be where the guarantor is replaced part way through the tenancy?

Ian Narbeth

15:13 PM, 4th January 2023, About A year ago

Reply to the comment left by Seething Landlord at 04/01/2023 - 13:52
No, consideration is not required provided that the guarantee is executed as a deed.

Chris @ Possession Friend

12:03 PM, 5th January 2023, About A year ago

Lots of helpful comments here, especially from Ian.
Ashley mentions he used the NRLA Guarantor forms and I believe these have been revised a few times. I presume having used the forms that advice has been sought. ?
We offer free advice, if that's of any help. ( whether your a member of NRLA or not )

Ashleigh

12:05 PM, 5th January 2023, About A year ago

Reply to the comment left by Chris @ Possession Friend at 05/01/2023 - 12:03
Thank you for this information. Yes I did get advice from nrla before I completed the forms. Always good to know there’s other sources available as well!

Noseyrosey

19:01 PM, 10th July 2023, About 8 months ago

Hi is the anyone who can give advice about guarantors?

Chris @ Possession Friend

21:40 PM, 10th July 2023, About 8 months ago

Reply to the comment left by Noseyrosey at 10/07/2023 - 19:01
We give free advice

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