Tag Archives: Guarantors

Student Guarantee with limited liability HMO's & Student Lets, Latest Articles, Legal, Lettings & Management, Property Investment Strategies

It is that time of year – student tenancies are in the news and up and down the country alert parents are saying “it is not fair – if my sons mate doesn’t pay his rent the landlord can come after me!”

Some landlords may feel that having 4 people guaranteeing a joint tenancy for 4 unrelated people is fine, after all, it does give them extra security, but it is a reality that in the lower courts, judges tend to look at the ‘fairness’ of an agreement, not just its legality, and a landlord trying to enforce a large debt against a guarantor in this situation may have difficulty obtaining a court order.  I myself have had a judge asking me (in so many words),”do you think this is fair?”. Student Guarantee with limited liability

We have put together a guarantee document that limits an individual guarantor’s responsibility for non-payment of rent to the relevant tenants ‘share’ of the rent.  Example – If Mrs Smith is a guarantor on a 4-person joint-tenancy with £10k pa rent, and Smith Junior can show he has paid £2,500 then Mrs Smith has no liability.

This ‘fairness’ can be a major selling point to tenants/guarantors, probably making obtaining a guarantee from parents easier and helping to convey to prospective tenants that the landlord will treat them fairly in other matters too.

I have added some further guidance notes in the comments section below and please feel free to ask further questions by posting comments.

If you would like to acquire a copy of the deed of guarantee referred to in this article then you may purchase a template by completing the form below. The price is £17.99 inclusive of VAT, the proceeds of which will be distributed as follows:-

£4.99 to Tenancy Services

At the request of the author “Chelseas Angels” childrens cancer charity will receive £5

£5 to The GOOD Landlords Campaign

£3 VAT

 


Tenant Referencing Using Common Sense Advice, Latest Articles, Property Investment Strategies, The GOOD Landlords Campaign

Common sense tenant referencing was pretty much the only option available when I first became a landlord and started letting property in the late 1980’s. Tenant Referencing Using Common Sense

In this article I am going to explain what my family do to find the next perfect tenant, right from the day an existing tenant let’s us know that they want to move out. More often than not these days, tenants think they can serve notice with just a phone call, email, facebook or text message – more about that later. Continue reading Tenant Referencing Using Common Sense


Concerned Mum trying to help her daughter Latest Articles, Lettings & Management, UK Property Forum for Buy to Let Landlords

This Facebook discussion between a letting agent and a concerned Mum is well worth sharing in my opinion. Please feel free to discuss. Concerned Mum trying to help her daughter

Concerned Mum – I wonder if you could give me some advice what documents would a 21 year old student would have to show to rent a house after university and would they need a guarantor to sign for them I would be very grateful if you could let me know this because we don’t plan on signing as guarantors for our daughter and she has no documents to show

Letting Agent – Sorry Kay but your daughter is very unlikely to find a decent home on that basis then. If you can’t trust your daughter to the extent of providing her with a guarantee then why would you expect a landlord to trust your daughter with rights to their property?

Concerned Mum – Thank you very much for the information that you have sent to me. My Daughter also has three hamsters, three mice, two gerbils, a rabbit and a guinea pig so I am guessing a landlord would not except all of those animals?

Letting Agent – Some landlords take a view on pets, I’m one of them. However, I do so based on logic. I like to see proof of current residence then take a look for myself. I also consider a persons ability to put right any damage caused at the end of a tenancy. Therefore, the amount of deposit paid, the finances of the tenant and the credit rating and income/assets of the guarantor are all taken into consideration.

Concerned Mum – Thank you for that but My husband and I just wont be signing for guarantor so that she can stay down in Southampton my husband said a long time ago that we would not sign for her after she has finished university and anyway I have all of her documents at home can you tell me what she would have to show you

Letting Agent – Always proof of identity and proof of residence, e.g. passport and driving licence. Many landlord also request to see six months bank statements and copies of utility bills. Guarantors are regularly expected to provide similar information. It is usual for landlords and letting agents to insist on seeing original documentation. Make sure that any agent you deal with is registered with The Property Ombudsman, you can never be too careful when handing over documents of this nature due to identity fraud.

Concerned Mum – my daughter has not got a passport and she has not got a driving licence and all of her bank statements come to my address the only thing she has got is her ID card from university would that be enough for her to rent a house without the other documents?

Letting Agent – I must refer you back to my initial response “Sorry Kay but your daughter is very unlikely to find a decent home on that basis then. If you can’t trust your daughter to the extent of providing her with a guarantee then why would you expect a landlord to trust your daughter with rights to their property?”

Concerned Mum – would her student ID be enough for her to rent a house after university?

Letting Agent – That’s at the discretion of the landlord. We certainly wouldn’t recommend our landlords to accept that as the only form of ID and proof of residence, especially without a guarantor.

Concerned Mum – so that means that she will have to come back home and live with us again as we will refuse to sign as guarantors for her. You have been very helpful thank you. We wont let her have any of her documents down at Southampton as I said before all of her bank statements come to my addresses and she has no documents to show other than her student id card. I hope that would that be enough for her to rent a house.

Letting Agent – You are very welcome. Whether your daughter moves back home or not is a matter for you and your daughter to decide. I wish you well 🙂

 


Latest PRS advice concerning ASTs, Voids, Referencing and Rent2Rent (e-news compilation) Latest Articles

compilation

Rent2Rent contracts – if you’re going to to it do it right

Rent2Rent companies are using the wrong letting contracts Whilst I have never been a fan of the Rent2Rent scheme I have to accept that a lot of investors are using Rent2Rent as part of their strategy.

As it is the mission of Property118 to share best practice, helping these investors to get their paperwork right fits within our mission, regardless of any the other misgivings I might have personally have about the scheme. read on

Unfair Section 21 Notice – Tenants Cry for HELP!

My landlord has issued me with a section 21 because I have asked for certain information regarding where my deposit is and to see a copy of the gas safety certificate.

I am devasted with this as I have a chronically ill daughter whom is on full disability and the house is perfect for her. read on

Referencing Services for Landlords

Referencing services for landlords come in several varieties and with numerous options and price structures.

You can get anything from a credit check for a fiver through to full referencing which guarantees rent on the due date if your prospective tenants and guarantors are considered to be a good risk. read on

Reduce your voids – the “move in free” business model

We have recently experimented with a “move in free” business model for tenants. We were asked to let several properties where the entire block had been purchased by investors.

Only two were let and that was creating a stigma for the block so we needed to get creative. read on

Tenancy agreements – At the end of the fixed term (by Tessa Shepperson)

All good things come to an end – and in due course your tenancy agreement’s fixed term will end too. What happens then?

When the fixed term ends Some people assume that the tenancy will end and that if the tenants stay on they will be squatters who can be easily evicted. However you will probably realise that this is very far from the case! read on

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Referencing Services for Landlords Latest Articles, Lettings & Management

Referencing services for landlords come in several varieties and with numerous options and price structures. 

You can get anything from a credit check for a fiver through to full referencing which guarantees rent on the due date if your prospective tenants and guarantors are considered to be a good risk.

The larger referencing companies have been around for several decades and are used by literally thousands of letting agents across the UK. They have, therefore, also developed huge databases over the years of bad payers, anti social tenants and tenants who have caused wilful damage to landlords properties.

If you are offered referencing for under £10, chances are that you will get what you pay for which at best could be described as an indicative report only. A company which previously provided lifestyle referencing free of charge now only offer this service when combined with a £4.99 credit check for example.

The advice from Property118 is to pay slightly extra and buy the real thing. If you are heavily reliant on your rental income and could not afford the legal costs associated with evicting a bad tenant we also recommend you to purchase rent guarantee insurance. The entire package is generally available for less than £100 a year. Do check the small print on RGI policies though as your claim might not be valid unless you follow time sensitive claims processes.

As of next month (August 2013), a new service will be launched into the market for complete peace of mind. It is a rent collection product with a difference; in that rent is paid to the landlord on the due date whether it has been collected or not. The company offering the product is new to the market but the scheme is underwritten by FCC Paragon, established in 1996 and regarded by many in the PRS as one of the UK’s most established referencing companies. The legal services for possession are outsourced to Landlord Action.  Rent continues to be paid on the due date until such time as possession is recovered, all at the expense of the underwriters. This scheme will be competitively priced at just 5% of rental income when it is launched towards the end of August 2013. It’s an ideal half way house in terms of pricing between self management and full property management, however, the major benefit is the certainty of cashflow. For more details see LettingAgentsOnline.co.uk Referencing Services for Landlords


Consent to let dilemma Latest Articles

Consent to let dilemmaCan you help me with my “Consent To Let” dilemma please?

I own a small property portfolio, 4 buy to let property, one property I own as tenants in common with my grandfather (no mortgage on this property) and one residential property that I currently reside in (since Sept 12).

Due to changes in my personal circumstances I intend moving in with my girlfriend this summer and hence I have let my property out to 4 students on a 12 months AST with guarantors etc..

Before I let the property out/sent the consent to let form in with my £30 pounds admin fee, I “tested the water” and rang Nationwide Building Society up, informed of the circumstances and they stated that there shouldn’t be a problem. I even went in to a Branch of Nationwide and they said they refuse the applications very rarely.

I haven’t heard from Nationwide despite sending the application in on 25th May with the £30 cheque that has been cashed.

I have phoned them numerous times and they say the application hasn’t been scanned on yet (I am not sure where the actual form is). I am now panicking as the students are due to move in on 1st July.

I am concerned that if they refuse the “permission to let”, what should I do? I can’t rescind on my contract in terms of not renting the students my house as they have all signed up. On the other hand Nationwide could take me to court for breach of a condition i.e. letting it out without permission.

Any advice would be greatly appreciated.

Thanks

Chris W


Letting Supermarket provides massive cost saving opportunities for private landlords Buy to Let News, Latest Articles

Letting Supermarket provides massive cost saving opportunities for private landlordsI am a non-exec Director of Letting Supermarket, an ARLA member letting agency which we have been recommending to Property118 readers since the end of 2012.

The feedback received from landlords we’ve referred has been superb with savings of 50% or more being reported when compared to other ARLA member letting agents. Continue reading Letting Supermarket provides massive cost saving opportunities for private landlords


Tenant claims to have moved out and ex-partner has moved in – Please Help Landlord News, Latest Articles, Property News, UK Property Forum for Buy to Let Landlords

Tenant claims to have moved out and ex-partner has moved inI Just saw an article on Property118.com about the new “squatters” law and would like some advice with a tenant that claims to have moved out but now the ex-partner has moved in and refuses to leave. Continue reading Tenant claims to have moved out and ex-partner has moved in – Please Help


Gwilym Jones of GTJ Property Nantwich GOOD Landlords Campaign Sponsors

The GOOD Landlords CampaignGwilym Jones of GTJ Property Nantwich

I have been a Landlord since 1996 and currently have 5 rental properties in Cheshire some of which are owned jointly.

The properties are kept in good condition and repairs are carried out promptly. I prefer professional couples as tenants, but I am willing to consider anyone provided they meet the referencing criteria.

However, I will no longer rent properties to DSS applicants, or those requiring guarantors. I would rather leave a property empty than rent to an unsuitable tenant. The rents charged are below market rates, but I do reserve the right to increase them with inflation.
Continue reading Gwilym Jones of GTJ Property Nantwich


Tenants Deposit Protection – what are the alternatives? Landlord News, Latest Articles, Property News, UK Property Forum for Buy to Let Landlords

Tenants Deposit Protection - what are the alternatives?I find the current tenants deposit protection schemes very time consuming and a waste of money, which all tenants sadly ultimately pay for through their rents.

I fully appreciate that a few tenants and a few landlords do give the other side a tough time hence understand why deposits need to be regulated if they are taken.

However, is there a better way to manage this area? How else can landlords get protection against tenants not paying their rent or damaging their property? Continue reading Tenants Deposit Protection – what are the alternatives?


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