The All Things Property Podcast
Welcome to The All Things Property Podcast. Hosted by Simon Bacon, an independent property expert with over 35 years' experience, and Ian Sadler, this podcast cuts through the corporate noise to deliver authentic, practical advice for property investors, landlords and sellers.
Whether you're building a property portfolio, struggling with landlord challenges or looking to sell your home with personal service rather than corporate scripts, you'll find honest market insights, news updates and real-world solutions that actually work.
Each episode brings you either in-depth conversations between co-hosts or expert interviews with mortgage brokers, accountants, solicitors and other property professionals.
From investment strategy to tenant management and realistic property valuations, we cover the topics that matter to quality-focused property professionals and entrepreneurs who value relationships over transactions.
Subscribe now for weekly episodes.
The All Things Property Podcast
Understanding Guarantors: Responsibilities, Liabilities, and Legal Implications for Property Tenancies
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
Welcome back to The All Things Property Podcast with Simon Bacon and Ian Sadler. In this episode, the spotlight is on guarantors, a sometimes misunderstood but crucial part of the rental process.
Simon and Ian cut through the jargon to explain exactly what being a guarantor means, who is eligible, and the true extent of the responsibilities involved.
They tackle common misconceptions, the impact of changing regulations, and why clear communication between landlords, tenants, and guarantors is more important than ever.
If you think being a guarantor is just a formality, think again this episode is an essential listen for anyone navigating rental agreements in today's property market.
Timestamps
00:00 Understanding tenancy guarantors
03:17 Understanding tenant guarantor responsibilities
09:17 Explaining rent affordability checks
10:48 Understanding guarantor responsibilities
______________________________
Get in touch with Simon for all your property needs.
---------------------------------------------------------------------------------------
www.prefprop.com
E: simon@prefprop.com
T: 0121 2402244
______________________________
Get in touch with Simon for all your property needs.
www.prefprop.com
E: simon@prefprop.com
T: 0121 2402244
Today here we're going to talk about guarantors, that often misunderstood element of uh an application process or tenancy process. Who needs one and what are they legally responsible for? Welcome to the All Things Property Podcast with me, Simon Bacon of Preference Properties. Every week, Ian Sadler and I will delve into All Things Property. We'll guide you through with friendly, no nonsense advice. Welcome to the All Things Property Podcast with me, Simon Bacon. And me is Adler. I think sometimes most guarantors sign the paperwork thinking that they are just going to be a backup, but in reality they can be fully responsible for the tenancy. So Ian, in terms of uh a guarantor, what is, for those that don't know, what is a guarantor on a tenancy?
SPEAKER_01Well the best way to describe a guarantor is if you like a co-tenant, they accept and sign for all the responsibilities that tenant signs for, uh, rents, utility bills, obligations throughout tenancy. Um all-encompassing then. Pretty much. Yeah. Do you think guarantors understand that when they sign up? I think guarantor is more likely to understand the implications of a ten uh a guarantors agreement because it's a shorter document, easy to read, not a seven or eight page document that we've agreed already. Tenants quite often don't fully read. So, and if they have I find if they have have any queries after reading that, it's a quick phone call or an email, just clarifying the situation. Yeah, what um the length of liabilities a moot point, which we'll get on to.
SPEAKER_00We'll get on to that in a in a minute. So, who can act as a guarantor? What what's the general criteria for someone to be a guarantor?
SPEAKER_01Well, it's based on affordability. I think my referencing process is based uh initially on credit searches and affordability, it's um which is a more stringent check than it used to be. It's based on salary less ongoing expenditure.
SPEAKER_00It's it's funny the way things have changed. I think many, many years ago, probably when you and I were first starting out in the rental sector, a guarantor was often my great-grandmother, because she'll she'll make sure that I pay my rent on time, not realizing that uh actually they're they're actually liable for the rent. In terms of joint and individual liability, what's what's a guarantor actually responsible for? So if there are two tenants and you have, would you have one guarantor or would you have two guarantors? How how would that work? Well for you.
SPEAKER_01My understanding of it, and you might want to correct me, is that it's tenant responsibilities are joint in several. So if one defaults on the rent payment, then the other person has to pay. So if a guarantor is only guaranteed, how can a guarantor uh stand as a guarantor for just half of the rent?
SPEAKER_00It has to be for the whole lot. Okay, but but if you're referencing a guarantor for a 50% share of the rent, then the guarantor is only liable for 50% of the of the costs. Because you're only re the guarantor stands behind an individual tenant. So my understanding is on a joint tenant, it's joint and severable, so you can go against both uh both the tenants, but the guarantor is only standing behind the one individual tenant. So the landlord would lose 50% of the rent earlier. I think I think you know, my again, my understanding is that you'd probably end up pursuing the guarantor for 50% of the costs.
SPEAKER_01I think my guarantor agreement may be wrong, um, guarantees the tenancy.
SPEAKER_00So again, I think one of the takeaways from this is check what the guarantor is liable for. Are they liable for both, or are they just liable for the share of any costs attributable to the person that they are guaranteeing? So, in terms of duration of liability, then what's the situation on that one? Because in the old regime we had, you know, the guarantor was responsible for a fixed period of time, the fixed term of the tenancy, and if that tenancy then rolled on to a periodic tenant, then the guarantor uh their liability stops at that point, isn't it? Yes. It'd be interesting to see. I and because we're so new into the the new regulations, I'm not sure yet as to whether or not that's been tested, whether because it's not a fixed-term tenancy, my assumption will be that the guarantor lifespan of them being in occupation. No, I think so. That's it'll be tested. I think for me, lots of these changes that have taken place under the um Renters Rights Act until they get challenged, I think that's when there will be further clarity and further changes. So it feels like Well, it needs not to be an interpretation.
SPEAKER_01This is why I would stress making your tenancy agreements and your guarantor agreements relative to the new act.
SPEAKER_00Absolutely, no, definitely. So is there a risk for landlords in terms of relying on weaker guantors? Do you think? Or what do you mean by weaker guarantor? I don't know, you know, if you've got a guarantor that um you know is not financially secure or you know because I you know, I I suppose one of the issues is that, you know, how many guantors would be able to meet the obligations of the rent if the tenant is.
SPEAKER_01Well they're referenced on the same basis as the tenant. They in principle they're treated as a co-tenant, they go through exactly the same referencing process as the tenant of the property does. So if they can't afford it, they work fast.
SPEAKER_00But if you think about it, you're you're referencing a tenant on a rent share, aren't you? So let's say the rent's a thousand pounds, the tenant is going to be let's say one tenant, the tenant is going to be paying their £1,000. So affordability works because they're not paying another rent somewhere else, they're paying a rent. Whereas if you have a guarantor, they're being assessed for affordability against the rent, but it's not a credit search as in, you know, how many loans have they got or are they a mortgage payer? Because how many guarantors would would not be paying a rent or a a mortgage.
SPEAKER_01Well, isn't it isn't aren't they assessed basically on their their outgoings and expenditures?
SPEAKER_00They're base the guarantor just looks at what their income is. It's not on they don't have to divulge if they've got a mortgage and what their mortgage payments are. And I think that's for me that's one of those areas that again, you know, you from a landlord's perspective, yes, the guarantor works because it's someone else to to uh have sitting behind the financial risk liability, but ultimately, you know, how how effective is a guarantor? Have you ever had to speak to a guarantor because the rent hasn't been paid?
SPEAKER_01No.
SPEAKER_00No. Lucky me. You are. I mean I've had a couple and they've stepped up, but you know, it does raise the question of you know what you look for in a guarantor and and making sure the guarantor really does understand um what they're what they're signing up for. So I suppose to to bring this episode to an end, what we're really saying here is the guarantor isn't a formality. You know, anybody who becomes a guarantor, it's a serious legal commitment that needs to be properly understood. And again, what I would say, communication, making sure the guarantor understands what it is that they're signing up for is probably crucial. Thank you. Thanks for tuning in to this week's episode of the All Things Property Podcast. If you found this episode useful, don't forget to subscribe, like, and share. These things really help us reach the people who need to hear this advice. See you next week.