What are the risks of being a guarantor for rent?
The risk of being a guarantor initially seems to depend on how much you trust the tenant you guarantee. This is the case for some leases, but parents should be advised that most student leases or shared leases use a “community and multiple liability insurance” contract. You must accept that there is a chance that you may be asked to make good rent arrears, property damage, and possibly legal fees as well. If you don’t have the financial resources to wish yourself away, you might say £15,000, don’t.
Surety loans are often taken out by people who find it difficult to obtain loans in other ways because the lender views them as a risk. As a result of this risk, interest rates are often higher than other personal loans. Since many landlords know that when you have to call the guarantor when the fixed rental period is over, the tenant should move out but don’t. If you’re considering being a rental guarantor for someone, you should keep reading to make sure you understand exactly what you’re getting yourself into.
Only My Share is Housing Hand’s sister service for tenants who can offer a qualified rental guarantor and decide to protect themselves and their guarantors financially from the risk of paying the missed rent of other tenants. It is very important that the guarantor reads and understands the lease agreement and knows the full amount (based on the time covered) that he is responsible for repaying. However, if the borrower or tenant does not pay what he owes, you are legally obliged as a guarantor to make the payment on their behalf. If that fails, they’ll have few options left, although offering six months’ rent in advance is usually a deal clincher.
If there is damage and unpaid rent that your son’s ex-wife cannot or does not want to pay, you are almost certainly liable. If she defaults on her rent for any reason, your husband could be held liable, and that could easily result in thousands, and the really bad news is that he can’t get out of the contract now unless she can find another guarantor. For this reason, guarantors are sometimes asked to prove they are in work or have sufficient assets (such as a property) to cover the entire amount of the loan or mortgage owed. It could mean the difference between helping with the monthly rent or facing a mountain of missed payments.
I’ve given him so much time to find a spot, but no luck, and I’m still paying the rent even though I don’t live there. In essence, in the event that a tenant is unable to meet his obligations under the lease agreement, whether for overdue rent, property damage or whatever, the guarantor is legally obliged to assume the liabilities on behalf of the tenant.