Do you know what amuses me? When someone willingly acts as a Tenant Guarantor for their nearest and dearest, but then as soon as they’re required to take responsibility for being a Guarantor (i.e. clear up someone else’s mess, usually in the form of paying their rent arrears), they shamelessly act victimised.
The question has to be asked, what the hell did they think they were signing up for in the first place?
The purpose of this blog post is to help everyone understand the responsibilities of a Tenant Guarantor BEFORE actually becoming one, to help understand the risks and avoid the apparent confusion!
What is a Tenant Guarantor?
A “Guarantor” is commonly a friend or family member of the tenant and has agreed to vouch for the tenant and accept the liabilities on behalf of the tenant. Essentially, in the event of a tenant being unable to meet their obligations under the tenancy agreement, whether it is for overdue rent, damage to the property or whatever, the Guarantor is legally bound to accept the liabilities on behalf of the tenant. There’s tonnes more information in the Tenant Guarantor Form page.
I regularly receive an annoying amount of emails from teary-eyed mascara-dripping Guarantors asking two of the following questions:
- How can I stop being a Guarantor for a tenant?
- My friend has fallen into arrears, and I’m his/her Guarantor, how do I get out of being liable for the debt?
Let me show you a prime example of what I’m talking about. I received this ridiculous piece of shit email last week:
I’m a guarantor for someone for a rented property. I have just recently found out the reason they needed a guarantor was cause the landlord thought she wasn’t working. She is now in arrears, is there anyway I can get out of being liable for her debt? Please help, I am at my wits end.
I’m sure the lady that sent me the email is a terribly nice person, so I take no joy in calling her a tediously underdeveloped chimp, but unfortunately that’s exactly what she is. The million dollar question is, what the hell did she think she was signing up for when she agreed to be a Tenant Guarantor, and why is she at her wits’ end?
Essentially, she’s got her nuts in a twist because she’s being asked to act upon the responsibility she agreed to. Heaven forbid! Of course, she’s not the only one; this is a common cry among guarantors.
It’s terribly frustrating.
There’s nothing wrong with being a Tenant Guarantor
Don’t get me wrong, there’s absolutely nothing wrong with being a Guarantor for someone you care for. By all means, be a Guarantor for someone you love and/or trust, just don’t shrivel into a wheezing blubbering mess if you’re actually required to take on the responsibility of being a Guarantor when that’s exactly what you agreed to do.
What to consider before becoming a Tenant Guarantor
With the objective of preventing this kind of stupidity from spreading much further, I’m going to jot down a list of points for prospective Guarantors to consider before agreeing to taking on the responsibility. If you’re in that position, you should carefully understand what you’re being asked to do, and then consider whether you actually want to do it.
1) Do you understand the responsibilities of a Guarantor?
I swear to God, 90% of the people that are a Guarantor don’t even have a clue what they’re liable for, they’re just happy they’re helping someone out. Very cute, but dangerously stupid. I’m sorry, but it’s true.
To reiterate, a “Guarantor” has agreed to vouch for the tenant and accept the liabilities on behalf of the tenant. Essentially, in the event of a tenant being unable to meet their obligations under the Tenancy Agreement contract, whether it is for overdue rent, damage to the property or whatever, the Guarantor is legally bound to accept the liabilities on behalf of the tenant.
Fully understand what responsibility you’re taking on.
2) Can you REALLY afford to pay someone else’s debt (not just hypothetically, but in reality)?
I think the main reason so many people agree to being Guarantors is because they believe their sweet little Dorothy isn’t physically capable of racking up debt with her landlord and smashing their trust and hearts into a zillion pieces. They basically think it’s a hypothetical scenario because they’ll never be let down. “Dorothy would NEVER let that happen”, says the idiot… while being struck by lightening.
Believe me when you I tell you, I’ve heard more stories than I care to remember about how sweet Dorothy screwed everyone over.
In any case, consider the implications on your own personal finances if the tenant you’re vouching for actually DOES fall into hardship. Can you REALLY afford to pay the debt, and more importantly, would you want to?
In situations like this, it’s always worth considering the worst possible outcome.
3) To what level do you trust the person you’re being a Guarantor for?
Trust comes in many, many, many layers, and you need to calculate to what level you trust the person you’re considering vouching for.
For example, I would trust my work colleague to pick up my Hugo Boss suit from the dry cleaners, but I wouldn’t trust him with in a 10 mile radius of my girlfriend if he’s coked out of his tits. Common sense.
Calculate which level of trust you have with the tenant, and if you’re left with concern, maybe that’s your gut instinct telling you to back-the-fuck-off from the situation.
4) Are you being pressured into being a Guarantor?
From my experience, most Guarantors are either family members or extremely close friends of the tenant. So there’s usually a feeling of emotional obligation pushing them into the situation, even if it’s subconscious.
If you feel even remotely pressured into being a Guarantor (even if it’s your own moral obligation pushing you, and not necessarily the tenant’s) or there’s a feeling of unease, even if it’s ever so slightly, I would think twice.
Emotional guilt tends to push us into a lot of situations we don’t really want to be in. Yes, we love our friends and family, and we want to do everything humanly possible to help them, but self-preservation is also critical.
5) There is zero reward for being a Guarantor
Understand one thing, there is ZERO reward for being a Guarantor. Well, besides from self-satisfaction of helping out someone you love. But that don’t mean shit, especially when you’re left paying their bills.
Seriously! There is no opportunity for financial gain, it doesn’t help your credit rating and you don’t get compensated for the tenant’s good behaviour.
It’s one of those acts of kindness that you do purely out of love, or whatever!
6) Will you panic/worry/stress if you have to pay the tenant’s debts?
So, assuming your nearest and dearest does rack up a debt that falls onto your lap, how would you feel about it? Like I previously said, it’s always best to approach this situation with the worst possible outcome in mind. If you think it’s going to cause you personal stress, then you’d be wise to dodge this bullet.
7) How strong is your relationship?
I’ve seen best friends of 20 years become enemies over money. It happens all the time. Hell, just watch Judge Judy, most of the cases on that programme involve family members and best friends scrapping over money. Great entertainment, but it’s embarrassing garbage.
Every relationship has their breaking point, and the subject of money is usually it. Sad, but true.
If the tenant (your close friend/relation) left you responsible for a pile of debt, would you carry any resentment towards them? Would it potentially ruin your relationship? If so, don’t put yourselves in that situation. It’s probably not worth it. Or maybe it is. I guess that’s for you to decide.
Anyone got any Guarantor nightmares to share? Comment box below…
Disclaimer: I'm just a landlord blogger; I'm 100% not qualified to give legal or financial advice. I'm a doofus. Any information I share is my unqualified opinion, and should never be construed as professional legal or financial advice. You should definitely get advice from a qualified professional for any legal or financial matters. For more information, please read my full disclaimer.