Guarantors: Signing for Somebody Else's Rent

This works through third-party promises to cover a tenant's obligations in the order the parts actually depend on each other.

What a guarantor is promising

A guarantor undertakes that if the tenant fails to meet an obligation, the guarantor will meet it instead. The promise is a contract in its own right, made between the guarantor and the landlord rather than the tenant. Because it is a separate contract, it usually has to satisfy formal requirements that differ between legal systems.

Those formalities often include writing and signature, and defects in execution can leave the promise unenforceable. Landlords therefore take considerable care over guarantee documents, which is a signal of how much weight they carry.

Wider than rent alone

Guarantee wording frequently extends to every obligation in the tenancy rather than to rent payments alone. That can include damage beyond fair wear, cleaning costs, unpaid utility charges and the landlord's costs of recovery.

Read strictly, a guarantor who assumed they were covering a monthly figure may face a claim of a very different character. Some documents also cover the tenant's obligations under any renewal or continuation of the tenancy. Reading precisely what is guaranteed is therefore the whole exercise, and the scope varies enormously between documents.

Joint tenancies multiply the exposure

Where several tenants share a joint tenancy, each is commonly responsible for the whole rent rather than a share. A guarantor for one of those tenants may find their guarantee covers the entire liability rather than a proportion. Whether that is so depends on the drafting, and documents differ substantially in how carefully they address it.

Read strictly, guarantors of student and shared lettings are the group most frequently caught by this feature. Anyone asked to guarantee within a shared arrangement should have the document explained before signing rather than after.

How long the exposure lasts

A guarantee limited to a fixed term ends with that term, but many are drafted to continue into any periodic continuation. Where the tenancy rolls on automatically, an open-ended guarantee can persist for years without any fresh signature.

Where a dispute goes formal, withdrawing usually requires the landlord's agreement, since the landlord accepted the tenancy in reliance on the promise. Some documents contain a mechanism for release on notice, and many contain nothing of the sort at all.

The rules on when a guarantee may be discharged are technical and differ between jurisdictions in important ways.

Changes to the underlying tenancy

In several systems a material change to the guaranteed obligation without the guarantor's consent can affect the guarantee. The reasoning is that the guarantor agreed to a particular risk rather than to whatever the parties later negotiate. Well-drafted documents anticipate this by including consent in advance to variations of the tenancy terms.

For most everyday situations, whether such advance consent is effective, and how far it stretches, is a question local courts have answered differently. This is genuinely intricate law, and a guarantor facing a claim should not rely on any general summary of it.

Limitation periods are short and unforgiving, which is why proper advice is worth taking early rather than after reading around.

When a claim arrives

A landlord will usually pursue the tenant first as a practical matter, though the document may permit going straight to the guarantor. The guarantor generally has whatever defences the tenant would have had about whether the sum is actually owed. A guarantor who pays may have a right to recover from the tenant, which is often worth very little in reality.

For most everyday situations, records of the tenancy, the account and the condition of the property become the relevant evidence in these disputes. Because the sums can be substantial, a guarantor receiving a demand should take advice from a qualified lawyer locally.

The takeaway

The scope and duration of a guarantee are set by the document, and both are usually wider than assumed. General information only, not legal advice.

Get it in writing, keep it dated, and file it where you will find it again.