UKC

My partner works part time and is self employed, she has a lage lump sum from her divorce settlement. She's just been given notice by her landlord and needs to find somewhere to rent for her and her two kids.

She's found somewhere but, the lettings agent is demanding a rent gaurantor. This looks like a serious responsiblity.

Any idea how I could work out the maximum possible financial liability? Rent, deposit, re-list fees etc. My thinking is my partner could lodge that amount with me, so I'd be covered if I get called upon as guarantor.

Thanks

In reply to iksander:

Assuming a fixed term contract, the maximum amount for which you are liable assuming she never pays anything is the monthly rent multiplied by the number of months in the contract. She will have to pay most other fees up front before moving in so she cannot default on them.

Another possibility is that for a fixed term contract, some agencies will let you pay the rent up front. It does strike me that if you are going to make her lodge the full amount with you, it is mostly the same thing.

Though you say it is a responsibility, it is a common arrangement, especially since most agencies require that you earn 3 times your rent. My dad is my guarantor for my current flat since I earn a measly amount, yet I have never missed a payment in 5 years. I suppose at the end of the day the risk depends on the quality of her financial management and ability to budget.

In reply to iksander:

Sounds like an odd 'partnership'.

In reply to iksander:

Just get her to put 6 months down plus deposit with the estate agents. That's what my old man does

In reply to elliott92:


Make sure that the landlord puts the deposit into the Deposit Protection Scheme: www.depositprotection.com/

In reply to Tony the Blade:

Thanks for the replies, the agency uses the DPS and requires 6 month's rent and deposit upfront PLUS a guarantor.

I think it is a 6 months fixed term then monthly renewal with 2 months notice.

>Sounds like an odd 'partnership'.

We live 40 mins away from each other and I also have a school age child so we don't have the prospect of living together for a few years. Maybe odd, but not unusual these days?

In reply to iksander:

What the hell is she renting that requires 6months upfront and deposit and guarantor, a yacht?

Tell her to find somewhere else with a different agents cause that's ridiculous.

In reply to iksander:


Assuming your partner is renting for a year you're intending to ask her to lodge a years worth of rent with you + expenses on top of that so that if she refuses to pay the rent and it defaults to the guarantor you'll have the funds there to pay it? If I'm understanding that correctly it certainly is unusual. If you don't trust her to pay the rent just don't sign as guarantor.

In reply to Removed User:


In the current property market it's not unusual. Too many renters chasing too few properties allow landlords/agencies to take the piss..... so they do.

In reply to iksander:

To be honest, the living apart bit isn't what I found odd, there are lots of reasons for that.

In reply to The New NickB:


in fairness without asking a lot more about the relationship you're being a bit judgemental to suggest it's odd.

op -

lots of letting agents do this now. It's ridiculous and a lot of people can struggle if they're in an area with few agencies and they all play the same game - I know while my mum would be happy to give me a loan if I asked (I don't though that's not relevant) she would be paranoid about being a guarantor and refuse. The guarantor needs to own a house generally so while I don't know for sure the legality about it, there's the suggestion that if your partner defaulted and you couldn't pay then the agency could cause you to lose the house, so that puts people off even in 'completely safe' situations.

Anyway, if there's lots of choice and she's not in a mega rush I would suggest looking for an agency that doesn't do this (or it could be the landlord that is insisting - ask) as those deals also tend to come with overly high fees and generally arsey contracts (monthly visits, sign saying you will clean the shower head out in a specific way once a week, bollocks like that) as well as simply the complication of the guarantor bit. Also handing over 6 months rent then finding out there's something terribly wrong with the house - it's a lot easier to avoid paying rent when you're in that situation than trying to get it back.

If this place is perfect or she really needs to get in quick then it should essentially be the cost of rent not paid up to when she leaves or when they're able to kick her out. In theory the latter could take a while if she refuses to leave. In practice - letting agencies can be pretty dodgy and flaunt the law with their contracts (things like saying admin fees are non refundable should they choose to not give you the house - it's only non refundable if you pull out or you claim something that isn't true on your application) so they could be trying to make the guarantor responsible for all sorts - including unlimited amount of repairs to the house if it's left in a state (or it's already got problems that they try to blame on your partner). While that may not be legal (I've not looked into that specifically) it can be very difficult to deal with a situation where bailiffs are knocking on your door and the letting agency won't communicate with you.

So my advice generally if it has to be this place/deal - go get the fine print and look it over. Find any holes in it and speak to them to get them to amend the contract so they're filled (if they refuse to do so then I'd really run a mile).

In reply to Removed User:

I trust her, and - although highly unlikely - it doesn't seem to be beyond the realms of possibility that she might not be able to pay the rent through no fault of her own.

And while neither of us have plans otherwise, splitting up is always a possibility which could leave me with an open-ended liability on top of my own obligations.

Or I could just say no and she and her kids move in to a B&B?

In reply to iksander:


That's totally ridiculous. Are you sure?
jk

In reply to Scarab9:

Exactly, and the OP is asking for financial rather than relationship advice too.

In reply to jkarran:

Yes, I have a copy of the tenancy agreement and their master terms. "Egregious terms" as lawyers would say, but apparently it's a landlord's market.

In reply to The New NickB:


Yes, how very odd for one adult to take steps to protect their finances whilst helping the other out.

The OP could invest the money he holds to cover the deposit at the same rate the partner would get, and could return the capital and interest at some point. Nobody looses, individual exposure to risk is minimised.

Plenty of people have been wiped out or hurt badly by their partners financial decisions. Without knowing far more than the OP needs to say to get help with their question you do not have the information needed to go off on a moral judgement here.

I'm a great fan of making finances as independent and robust as possible in a relationship, and none of the reasons driving this relate to the other person in the relationship. There are plenty of external events that can impinge, and better for everyone to take reasonable measures to secure their finances should, for example, the other person disappear or die suddenly.

Don't let that stop you judging though...

In reply to winter tree:


I am clearly not the one judging!

In reply to Scarab9:


It is hard for people, but it isn't "ridiculous". It recognises how many renters run away without paying, often having done serious damage to the rented property well in excess of the deposit sum. (By the way, the deposit is NOT the limit of liability - you can be liable for much more if you do much more damage).

In reply to iksander:

And will be even more so now the Government wishes to put new landlords off with the increase in stamp duty.

In reply to Neil Williams:

Speaking as a landlord, I find it pretty rediculous.

In reply to iksander:

I have a feeling that the maximum *possible* financial liability could be very large, if she torches the place then absconds.

In reality if she's a decent person, and ends up in a situation unable to pay the rent, the risk is not too high if she's already having to lodge her entire rent (and more than the notice period when it turns rolling) in the DPS. ?

I am not a financial advisor.

In reply to climbwhenready:

Ugh, take a look at this for some sobering experiences

http://www.propertyinvestmentproject.co.uk/blog/the-risks-of-being-a-tenant...

In reply to Neil Williams:

It is

It is ridiculous the amount many agencies and land lords charge. It is mostly the agencies though, who screw over tennnants AND landlords. And expecting a guarantor to rent? Many don't have anyone who will do that and in some areas therefore can t get a place.

In reply to iksander:

Obviously it's your decision but just remember if things turn sour it's your door the bailiffs will be knocking on.my wife acted as a guarantor for a close family member and as you can probably guess they defaulted which left me with a fairly hefty bill and a heavily pregnant wife on the verge of a breakdown.we have learned our lesion the hard way and in future I we would never do it again unless it was for one of our children.of course I don't know you or your partner so can only offer advice from my one bad experience.hope you find a solution,good luck.

In reply to iksander:

Your liability is for whatever her liability is under her contract.

The landlord won't (or at least not if they've got sense) accept more than 2.5 months upfront. Above this the lease automatically accrues different rights, the most significant of which is that the landlord no longer has right to repossess if they wish to sell.

In reply to iksander:

This isn't answering your question, but rent guaranteeing is risky, so my thoughts are:

DO IT for spouse / children / parents / brothers / sisters i.e. immediate family.

DON'T DO IT for anyone else at all no matter what.

Yes I'm horrible and please go ahead and press the dislike button anyone who wishes.

In reply to The New NickB:


There are many 'odd' ones. The one I seem to be in is a lot more odd.

In reply to abseil:

Theres a prog on C5 about high court baliffs and one of the cases was parents having there car seized because they'd acted as garrantors for there daughter who'd had trouble paying rent after job issues.

Look at your total liability and work out if you can afford it before signing anything.

In reply to Indy:


Car seized - blimey - what you wrote sounds like very sound advice, and thanks a lot for that.

In reply to Scarab9:


I'm assuming, possibly wrongly, that that isn't standard and that there is a reason (e.g. poor or no credit history) it is being applied in this case.

If it is being applied to all comers it is indeed ridiculous.

In reply to abseil: I would add Only do it for very close family after careful consideration as even these can leave you in the sh1t.
If you do act as guarantor expect the worst as it often happens. People who need a guarantor often have a shakey credit record and that is why one is needed.
Make sure you have cash you don't need for anything else, just in case. If anything does start to go wrong start the legal withdrawal of your 'guarantorship' as quickly as possible, via a solicitor. The consequences of signing any form of contract is that you will be held to it, and rightly so!
I am not a landlord or letting agent. I am a normal person who was financially screwed over by a wife and left to sort out massive debts (in the USA) as she had left the country. I had to sort them before they would let me leave, as I was her spouse and was jointly responsible, even though I knew nothing about most of the debt!

In reply to johncook:

>If anything does start to go wrong start the legal withdrawal of your 'guarantorship' as quickly as possible, via a solicitor

As far as I can tell it is not possible to withdraw from being a guarantor until the tenancy concludes, and I would be liable for any amount outstanding or contested even after she's moved out. Could be 6 months, could be indefinitely.

More of an issue is the fact that liability is unlimited, so it's impossible to mitigate against.

Yes she does have a "good" eg less than perfect credit rating courtesy of Santander who ballsed up her DDs one month through no fault of her own.

In reply to iksander:


That kind of thing can, and should, be challenged. Santander would have been able to correct the mistake on her credit record and pay back any and all fees incurred as a result of the mistake. Don't accept less.

In reply to iksander: May by the old cynic, but I heard the 'ooops the bank screwed up' excuse too often! Banks are usually fairly quick to resolve issues like this as they don't like threats of ombudsmen.
I managed to get rid of much of the 'wifes' debt by accusing the (USA) banks of not doing the thorough checks required. (They were in the middle of the money laundering investigations at the time.) Almost all 'her' residual debts were written off. Some were in joint names without me knowing, some were internet loans/accounts in either or both our names, again, without me knowing. The excuses were still the same. 'the bank screwed up.'
Cost me a good job and had to leave USA as I could no prove my financial viability to the State Department when I applied for a green card.
Could cost you your house and everything.
Trust no one!