By Steve Roulstone
One recurring issue when problems occur with a Tenant who has failed to keep up to date with their rental payments, when a Guarantor is in place, is the sudden realisation that despite having had the situation explained at the beginning of the Tenancy and in our case at Castle Estates having signed a confirmation letter that clearly confirms the Guarantors role, that they may become liable themselves for the arrears and any additional costs generated by the departing Tenant at the house concerned.
Increasing requirement.
This is a problem which is not going to go away, in fact most reference Companies (with a mind to the current financial situation) are requesting a Guarantor to assist the Tenant being referenced in achieving a successful application, in probably twice as many cases as they were five years ago. This means that it is even more important that the Guarantor understands that should debt arise as the result of the Tenants actions, then they could be asked to make good the shortfall if the Tenant fails to do so after every reasonable effort has been made to achieve success with the Tenant, in a court of law.
For the lifetime of the agreement.
It is therefore important that the Guarantor is advised about any possible liability as soon as possible after it becomes clear that a problem exists. This is when we normally get asked for the Guarantor to be released from the agreement and of course without a replacement waiting in the wings who would also need to pass reference (and if a problem has occurred this is not a likely scenario) they cannot and should not be released. Signing your name to a legal document has implications and therefore should not be entered in too lightly. Indeed Guarantors need to understand fully their role, which is why we have a separate letter which we ask to be signed and wherever possible, have the Guarantor present at the check in to ensure they understand their responsibility.
End of Tenancy problems.
Of course most problems where a Guarantor has to be advised occur at the end of the Tenancy and just recently we have had a very serious abandonment, where the Guarantor was a close relative of the Tenant who seemed to be fully aware that the relative would have to face the consequences of the Tenants actions, of course such malicious actions are very rare, but it does serve as a timely reminder to ensure, as a Guarantor, you will still want to support the Tenant in possibly two or even three years time (average length of Tenancy is now close to two years) As Agents we have to be sympathetic, and make every effort to seek recourse with the Tenant, but legally the Guarantor will be required to stand in the Tenants shoes if the Tenant does fail and the reality of this should always be considered before the agreement is signed.
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