The rising cost of living and renting across the UK has led to a surge in students requiring a guarantor to secure private rental accommodation. This shift towards professionalised approaches by landlords in university towns and cities reflects a lucrative market amidst a challenging housing landscape. However, this also raises concerns for individuals agreeing to act as guarantors, who must be aware of potential liabilities and crucial protections available.
Housing expert Giles Peaker stresses the importance of students being on individual tenancies rather than joint ones. In a joint tenancy scenario, all tenants and their respective guarantors are jointly and severally liable for the entire rent. This means that if one student defaults on their share, the landlord can pursue any of the other tenants or their guarantors for the full outstanding amount – potentially leaving one guarantor responsible for arrears caused by someone else's child.
Guarantors also have rights regarding tenancy deposits. If a parent or guardian pays the deposit on behalf of a student, they are considered a 'relevant person' under the Housing Act 2004. This entitles them to receive the 'prescribed information' detailing which Tenancy Deposit Scheme the deposit has been placed into. Failure by the landlord or agent to provide this information could lead to a penalty claim against them, as highlighted by Peaker.
Prospective guarantors should also exercise caution regarding potential scams. Organisations like Shelter and the National Union of Students advise vigilance against practices such as landlords claiming no deposit is necessary, which could leave tenants and guarantors exposed to uncapped costs upon vacating the property. All legitimate tenancies should stipulate a reasonable deposit, which must be protected in an approved scheme.
David Manhood, who acted as a guarantor for his daughter studying in London, ensures that all prospective guarantors scrutinise documentation carefully. 'It's essential to verify that you're signing an assured shorthold tenancy and not some other arrangement,' he cautions, adding that it's crucial to confirm which Tenancy Deposit Scheme is being used and to receive all relevant paperwork upon completion.
As first-time renters, students are particularly susceptible to practices such as 'licences' instead of tenancies. While these may legally amount to tenancies, landlords offering them often attempt to circumvent protections like deposit protection or statutory notice periods. Guarantors must remain vigilant and scrutinise all documentation carefully to protect both themselves and the student they're vouching for.
For students requiring a guarantor, it's essential to understand the potential liabilities involved and the crucial protections available. By being aware of these key issues, prospective guarantors can better safeguard themselves and their financial futures.