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Steveg
13-03-2007, 18:35 PM
My wife and I have just secured our first student let. We have students lined up but they have been advised against getting their parents to sign up to a parental guarantee by the student union Their concern is about the joint and several liability their parents will be undertaking in signing the guarantee. They appear happier to sign if they guarantee just their child's portion of the rent. My concern with this is that as they will be signing an AST for the entire property this does not specify portions of the rent per tenant. Does anyone have any experience of this? Is there an acceptable compromise that protects both parties concerns? I can understand their concern however my concern is just as strong.

Poppy35
13-03-2007, 19:35 PM
My wife and I have just secured our first student let. We have students lined up but they have been advised against getting their parents to sign up to a parental guarantee by the student union Their concern is about the joint and several liability their parents will be undertaking in signing the guarantee. They appear happier to sign if they guarantee just their child's portion of the rent. My concern with this is that as they will be signing an AST for the entire property this does not specify portions of the rent per tenant. Does anyone have any experience of this? Is there an acceptable compromise that protects both parties concerns? I can understand their concern however my concern is just as strong.

this is always a problem with having to use guarantors - at the end of the day so they want the house? If so they should provide the guarantor and the guarantor should understand their liabilities. We have in the past had 4 sharers and had 4 guarantors although all jointly and severally liable. Luckily did not have to use them to any effect.

leydonlettings
14-03-2007, 01:31 AM
We are about to revise our own forms and contract wording but finding suitable wording to protect our specific interests is tricky!

It is possible to create a joint tenancy but still have individuals provide guarantors (be it a parent or otherwise) who only protect one housemate each. The parental guarantee form is individually completed and signed by say the parent(s) to reflect the portion of rent paid and the frequency by the tenant in question.

Where there is a group it is normal for all tenants to provide either an advanced cheque or standing order to pay the rent on the appointed dates. The guarantor simply inserts on the form the portion of rent paid by the tenant on the standing order. This does not alter the fact that the tenants are jointly and severably liable simply that the parent is only liable for his child to the extent indicated by the monthly rent and other relevant terms.

Should the tenants argue about who is responsible for say damage then it becomes murky whether a guarantor could be responsible for another child's (tenant's) damage. The form is best drafted by a solicitor alternatively if you are a member of a landlords association you could probably get one off the shelf - but whether it covers your question...?

Be careful about replying or writing to the effect, "take it or leave it". Courts apply The Unfair Contracts Terms Act (UCTA) and if deemed unfair or unreasonable or onesided could strike out your contract clause and then if without the clause the remainder of the document made no sense the whole document could be held unfair and inadmissable or unenforceable.

Our contracts show a separate calculator page enabling each tenant to see what they individually pay for the purpose of standing orders. We state that this is merly a guide so as not to create individual contracts within a contract.

Avoid creating individual contracts unless you have to as it can get complicated re TV license and Council Tax among other things.

David Lawrenson
14-03-2007, 11:05 AM
I know none of you have stated it, and you are probably well aware of this, but it's worth stating (for the new landlords reading this thread) that parents who are guarantors (or any guarantor) should always be a home owner - If they are, it makes it a whole bunch easier to make a recovery of money owed should you ever need to make one.
And you can check for a few pounds on the landregistry site whether they do indeed own the property in question. (I also use the land registry to check prevous landlords' references - to see whether the landlord really do own the property in question! A useful anti-fraud check)
Also, a guarantors signature should be witnessed by a third party.
David Lawrenson Topic Expert Lettingfocus.com Author: Successful Property Letting... For upcoming event - http://www.lettingfocus.co.uk/enews/enews.html

jeffrey
14-03-2007, 11:38 AM
I know none of you have stated it, and you are probably well aware of this, but it's worth stating (for the new landlords reading this thread) that parents who are guarantors (or any guarantor) should always be a home owner - If they are, it makes it a whole bunch easier to make a recovery of money owed should you ever need to make one.
And you can check for a few pounds on the landregistry site whether they do indeed own the property in question. (I also use the land registry to check prevous landlords' references - to see whether the landlord really do own the property in question! A useful anti-fraud check)
Also, a guarantors signature should be witnessed by a third party.
David Lawrenson Topic Expert Lettingfocus.com Author: Successful Property Letting... For upcoming event - http://www.lettingfocus.co.uk/enews/enews.html

...AND the Guarantee must be in the form of a Deed. If it's not executed as a Deed, it is unenforceable for lack of legal formality.
I have posted (in CONVEYANCING FORUM) a new thread on Contract Law basics!

amboy
20-03-2007, 14:26 PM
I too have pretty much the same dilema, I dont usually reference or get guarantors for my student tenants, however I currently have 2 prospective tenants who are wishing to rent a higher than average priced flat from me.

Their parents will be paying and the prospective tenants have indicated that they will act as guarantors, so my question is that is the guarantor form I have downloaded form this site acceptable.

Also, is thier any point referencing the tenants as they will have no credit history being students, however they are prepared to pay for a check

Paul_f
20-03-2007, 17:28 PM
Um..........just a few pointers!
We are about to revise our own forms and contract wording but finding suitable wording to protect our specific interests is tricky! If not impossible!

It is possible to create a joint tenancy but still have individuals provide guarantors (be it a parent or otherwise) who only protect one housemate each. The parental guarantee form is individually completed and signed by say the parent(s) to reflect the portion of rent paid and the frequency by the tenant in question. As it is the whole rent that is being guaranteed this won't work - see below

Where there is a group it is normal for all tenants to provide either an advanced cheque or standing order to pay the rent on the appointed dates. The guarantor simply inserts on the form the portion of rent paid by the tenant on the standing order. This does not alter the fact that the tenants are jointly and severably liable simply that the parent is only liable for his child to the extent indicated by the monthly rent and other relevant terms. No you can't do this as you are altering the terms of the tenants' joint and several liability, to that of an individual guarantor who is not being required to guarantee on the same basis. Remember you can only ask a guarantor to guarantee the obligations of the tenants - note plural, as stated within the tenancy agreement so they can't be altered for the sake of convenience

Should the tenants argue about who is responsible for say damage then it becomes murky whether a guarantor could be responsible for another child's (tenant's) damage. You've hit the nail on the head here! The form is best drafted by a solicitor oh really! so that makes it legal then?alternatively if you are a member of a landlords association you could probably get one off the shelf - but whether it covers your question...?

Be careful about replying or writing to the effect, "take it or leave it". Courts apply The Unfair Contracts Terms Act (UCTA) No! It's the Unfair Terms in Consumer Contract Regulations (UTCCR) guidelinesand if deemed unfair or unreasonable or one sided could strike out your contract clause and then if without the clause the remainder of the document made no sense the whole document could be held unfair and inadmissable or unenforceable. This is mumbo-jumbo

Our contracts show a separate calculator page enabling each tenant to see what they individually pay for the purpose of standing orders. We state that this is merly a guide so as not to create individual contracts within a contract. Very sensible.

Avoid creating individual contracts unless you have to as it can get complicated re TV license and Council Tax among other things. Students are normally exempt from council tax and I wouldn't be worrying who pays the TV licence, it's up to them to sort out.