As a tenant, finding a place to rent can be a daunting task, especially if you have little to no credit history or income stability. Landlords want to ensure that their property is protected and that they receive rent payments on time, which is why many require a guarantor as part of the tenancy agreement.
What is a guarantor clause in a tenancy agreement?
A guarantor clause in a tenancy agreement is a provision that obligates the tenant to provide a responsible third party who agrees to guarantee the rent and other tenant obligations. Essentially, the guarantor acts as a backup plan in case the tenant is unable to fulfill their financial obligations.
Who can be a guarantor?
The guarantor can be anyone that the landlord agrees to, but in most cases, they must be a UK resident and have a good credit history. Usually, the guarantor must also be over 18 years old. It is common for the landlord to require the guarantor to earn a certain amount of income, usually three times the annual rent.
Why is a guarantor clause important?
A guarantor clause is essential because it protects the landlord from any potential loss of rent or damage to the property. It also offers security to the landlord when renting to a tenant with little credit history or income stability. In some cases, landlords may require a guarantor if the tenant has a history of missed payments or has a low credit score.
What are the responsibilities of a guarantor?
If the tenant is unable to pay the rent or fulfill any of their obligations under the tenancy agreement, the guarantor is responsible for paying these amounts. This includes rent arrears, damages to the property, or any other charges outlined in the tenancy agreement. The guarantor must also sign the tenancy agreement, agreeing to all the terms and conditions.
What should tenants and guarantors look out for in a guarantor clause?
Before agreeing to sign a tenancy agreement with a guarantor clause, both the tenant and guarantor should read the clause carefully. It is important to understand the responsibilities of both parties in case of default. Additionally, tenants and guarantors should ensure that they are comfortable with the landlord`s requirements and that all the terms are clear.
In conclusion, a guarantor clause in a tenancy agreement can offer the landlord financial protection and security when renting to tenants with little to no credit history or income stability. It is essential to ensure that both the tenant and guarantor understand their responsibilities before signing the agreement.