What the guarantor is legally responsible or ‘liable’ for depends on what it is written in the guarantee.Usually the guarantee will say that the guarantor is responsible for paying the rent if the tenant(s) cannot or do not for whatever reason. The guarantee may also say the guarantor must pay for any repairs if the tenant(s) damage the property or costs such as cleaning service costs. Tenancy agreements vary, so it’s important to check yours carefully because there could be other costs or charges that your guarantor could be held responsible for.

The terms of the guarantee may be written down in a separate agreement or included in a section of the tenancy agreement itself. Sometimes there may just be a short section, called a ‘clause’, in the tenancy agreement with a separate form for you to fill in giving your personal and bank details.

Before you sign anything make sure you read the guarantee and the tenancy agreement carefully. You need to know and understand what both these documents commit you to, before you sign the guarantee.

If there is only very limited or no information about what you are responsible for, you should ask the landlord or their agent to provide you with more, before signing anything.

Be aware that the law stops landlords from overcharging tenants and guarantors for things like holding deposits (to reserve a property), tenancy deposits and letting agency fees. Landlords cannot ask for a tenancy deposit that is more than 5 weeks’ rent for accommodation where the total annual rent is less than £50,000.

If the total annual rent for a property comes to more than £60,000, 6 weeks’ rent is most you can be charged for a tenancy deposit.

If you want to reserve a property by paying a refundable holding deposit, the landlord cannot ask for more than one week’s rent.

You can find more details on banned letting fees and how deposits must be capped in the GOV.UK How to rent checklist.

Joint tenancies

When someone shares a property with other tenants under one tenancy agreement (a joint tenancy), the tenancy agreement usually requires each person to promise to pay all the rent, not just their own share. So, a tenant is responsible for paying their own rent but can also be asked by the landlord to pay all of the rent if any of the other tenants fail to pay. The law calls this being ‘jointly and severally liable’. In this situation, as a guarantor, you are likely to be responsible for whatever any of the joint tenants owe the landlord, not just what the tenant you are helping may owe.

You may also be responsible for any damage caused by other tenants, not just the one you’re wanting to help. This may not be what you expected and why it’s important that you understand the terms of the guarantee before you agree to them.

It’s very important that you read the guarantee carefully to ensure that you understand what you are signing up to. If you’re guaranteeing more than just unpaid rent, then you must read the tenancy agreement as well so you know what else you are guaranteeing.

If there’s anything in either document that you don’t understand, you should get independent legal advice. You may be able to get legal advice:

• as one of the benefits of your home or car insurance. Check your policy documents to see if this applies to you. Many insurance policies provide access to free legal advice about the law in England and Wales, for example, via a telephone helpline.
• as one of the benefits of trade union membership. If you are a member of a trade union, contact them to find out where you may be able to get free or low cost legal advice.
• from your local advice centre or Law Centre. See our Legal advice and helpline finder for more information about where to go for legal advice.
   

You are potentially responsible for:

• any rent money owed (you may hear this called ‘arrears’),
• the cost of putting right any damage to the property, and,
• any other costs that the tenancy agreement allows the landlord to charge the tenants as a result of them not complying with the tenancy agreement in some way

This depends on the wording of the guarantee.

If your relative or friend is sharing with co-tenants and they each have a guarantor as well, make sure the guarantee makes it clear that you will only become bound by the guarantee from the point when all the co-guarantors have signed up to the guarantees. Otherwise, if you’re the first one to sign, you could end up being responsible, on your own, for all the debts owed by any of the tenants to the landlord.

However, even if you do make sure that the other guarantors have signed up, there is still the possibility that your co-guarantors may ‘disappear’. A landlord does not have to take action against all the guarantors but can choose to pursue the guarantor(s) that are most likely to pay up. So, even if there are other guarantors, you may find yourself liable for the full amount of any debt.

Again, this depends on the wording of the guarantee. You may be liable for the fixed term of the tenancy and any extension period, and for any rent increases. If this is the case, you will be legally responsible if the tenant breaks any of the promises they made in their tenancy agreement before the tenancy ends and you will remain liable for a period of six years from the date they break their promise. So, for example, if the tenant fails to pay the last month’s rent, the landlord has 6 years from the date that the rent became due to take action against you and/or the tenant.

Unless the guarantee provisions say otherwise, you carry on being liable even if you fall ill or lose your job. So, even if your financial situation takes a turn for the worse, you will still be responsible unless the guarantee protects you from this.

If the tenant is declared bankrupt, the extent of your liability will depend on the wording of the guarantee. If you are declared bankrupt, then depending on the circumstances, the landlord may be a creditor in the bankruptcy for anything you owe. And if you were to die, the landlord may be able to claim against your estate but, again, this will depend on the circumstances and the wording of the guarantee agreement.

If some of the guarantee provisions seem unfair to you, you or the tenant could ask the landlord to agree to change the guarantee before you sign it.

For example, you may want to ask for changes that limit your responsibility, so that:

• The guarantee only applies for a set period of time, for example, 6 months or a year. In this situation it’s best if the provisions set out both a start and end date for your responsibilities.
• You are only liable for any debt owed divided by the number of tenants sharing the property. So, for example, in a situation where the tenant is sharing with 3 others, the guarantee only extends to 25% of the rent for any one month.

However, many landlords aren’t willing to limit a guarantor’s liability. So, they may not agree. But it’s probably worth asking.

Disclaimer

The information in this guide applies to England.

The law is complicated. We have simplified things in this guide. Please don’t rely on this guide as a complete statement of the law. We recommend you try and get advice from the sources we have suggested.

The cases we refer to are not always real but show a typical situation. We have included them to help you think about how to deal with your own situation.

Acknowledgements

This guide was updated thanks to funding from the Ministry of Justice. Law for Life would like to thank all those who provided advice and feedback on this guide, including A&O Sherman.