If your tenant doesn’t pass their financial or credit check, or you’re concerned about their ability to pay the rent and bills, you may ask them to provide a guarantor.
Our short guide for landlords will give you valuable insights into some of the questions you should ask a guarantor who has put themselves forward for a tenant.
1. Are You a UK Homeowner?
A guarantor should be someone that owns and lives in their own property in the UK.
If they live abroad, chasing payments can sometimes be tricky. If they don’t own a property in the UK, it can also be challenging to understand their financial situation, credit score and overall affordability.
2. Have You Been a Guarantor Before?
This is a great question to ask so that you can understand how familiar the person is with being a guarantor. If they haven’t had this experience, it doesn’t mean you shouldn’t go ahead. But it does mean you will need to explain the process in more detail to confirm they fully understand the agreement.
If they have been a guarantor before, ask for more details. Find out who it was for and if they ever needed to make any payments for the tenant.
3. Are You Becoming a Guarantor for One Person or Joint Tenants?
If the guarantor is happy to be responsible for joint tenants, that means they’ll be liable to pay if any or all the other tenants don’t pay.
However, some guarantors may only wish to be responsible for one tenant, so make sure this is clarified and understood.
4. Do You Understand the Circumstances in Which You Will be Asked to Pay Money?
Essentially, you want to ensure the guarantor has read the agreement and fully understands when they may be liable for payment. While a tenant may have asked the guarantor this question, you’ll want to do your due diligence too, to ensure they are prepared for the commitment.
Usually, you’ll only need to ask the guarantor for payment if the tenant doesn’t pay rent or utilities, or damages the property in a significant way. So, be specific about the circumstances and potential costs to ensure they fully understand their responsibilities.
5. How Long Are You Prepared to Be a Guarantor?
You’ll need to agree on how long the guarantor agreement will last. If the tenancy agreement is fixed-term, the guarantor can specify whether it will only last for that fixed-term – or beyond if it renews or becomes a rolling tenancy.
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Call us today on 020 8366 9777 or browse our letting agent services at https://www.ashmoreresidential.com.