Definition of Guarantor:

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A Guarantor is someone who agrees to indemnify a Tenant's rent payments, as well as any damage that the Tenant may cause. It provides the Landlord with additional protection in that should the Tenant either default on his rent payments and/or fail to pay for any damage caused by him to the Landlord's property, the Landlord may proceed against both the Tenant and the Guarantor for payment to be made.

Guarantors are usually used in cases where the Tenant is either a student or the Landlord is unsure whether the Tenant can or will be able to pay the rent and/or and damage caused by him to the property.

It is important that thorough reference checks are made on the guarantor. It is also often a prerequisite that the Guarantor is a UK home owner as this makes recovery of monies much easier for the Landlord. However, this is not a legal requirement for Guarantors.

There are the following ways in which a Landlord can ensure a Guarantor's liability in cases of default by the Tenant:

  • The inclusion of the Guarantor in the Tenancy Agreement; or
  • Drawing up a separate Deed of Guarantee.

Inclusion of Guarantor in Tenancy Agreement:

In these cases, the Guarantor could be included as a party to the Tenancy Agreement, with the main parties being:

  • Landlord;
  • Tenant; and
  • Guarantor

The Tenancy Agreement will need to contain an additional clause dealing with the Guarantor and setting out the liability of the Guarantor. Furthermore, all the above parties will then need to sign the agreement.

For more information on tenancy agreements, see The AST Agreement.

Deed of Guarantee:

A Deed of Guarantee is a separate legal document between the Landlord and the Guarantor, setting out the terms and conditions upon which the Guarantor will be held liable.

The Deed of Guarantee must make specific reference to the Tenant and the Tenancy Agreement between the Landlord and the Tenant. Also, the Landlord must ensure that the Guarantor is given a copy of the Tenancy Agreement and is made aware of the provisions contained in such agreement.

The Deed of Guarantee must be signed by the Landlord, the Guarantor and an independent witness.

Where the Tenancy Agreement is replaced by a new Tenancy Agreement between the Landlord and the Tenant, the Landlord will need to obtain a new Guarantee from the Guarantor.

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