Guarantor Agreements: When and How to Use Them

Guarantors are not a magic safety net. Used properly they are a serious legal back-stop; used sloppily they are just another piece of paper a judge will ignore.

1. When you should ask for a guarantor

You bring in a guarantor when the tenant nearly fits your criteria but not quite. Common scenarios:

Income fails your affordability test (for example you want 2.5-3x rent net and they fall short).

First-time renter with no track record.

Student tenants.

Tenant with historic adverse credit but now in a stable job.

Tenant on benefits where income is close to the line, and a guarantor gives you extra comfort.

In all of these, the guarantor must be good on paper: stable income, cleanish credit, ideally a homeowner and UK-based. You reference the guarantor almost as hard as the tenant.

2. What the guarantor is actually signing up for

A sensible guarantor deed will say clearly that the guarantor:

Guarantees the payment of rent if the tenant fails to pay.

Guarantees performance of other tenant obligations if you want cover for damage and costs (this has to be spelled out; if you only mention rent, you cannot later chase them for damage or legal fees).

Is jointly and severally liable with the tenant for those debts -- you can pursue either or both for 100%.

Is liable:

Either for the life of the tenancy (and any statutory periodic continuation), or

Up to a clear cap (for example "up to GBP 10,000") or defined period.

Good modern deeds (for example the new Renters' Rights-era templates being marketed) explicitly say the guarantee continues whilst the named "Guaranteed Tenant" lives at the property, survives contractual changes, and may cap liability at a fixed figure.

Your guide should make one simple point: vague "guarantees" that do not specify what is covered, for how long, and on what terms are where judges often side with the guarantor.

3. Making the guarantee enforceable: deeds, disclosure and variations

Key legal points from case law and practice:

Guarantees must usually be in writing and signed by the guarantor (or someone authorised), to satisfy the Statute of Frauds principles.

If the tenancy is already signed when the guarantor signs, the guarantee should be executed as a deed (no "consideration" otherwise).

The document must say it is a deed.

The guarantor's signature must be witnessed correctly by an independent adult.

Shelter and landlord-side firms are aligned on this: if the signature is not properly witnessed, or it is not clearly a deed, you may not be able to enforce it.

You should also:

Give the guarantor a copy of the tenancy agreement and any major variations so they know what they are guaranteeing.

It is good practice (and sometimes relevant in challenges) to tell them to seek independent legal advice, especially on larger liabilities.

Variation and case law: Holme v Brunskill

The classic rule from Holme v Brunskill (1878) 3 QBD 495 is:

If you and the tenant vary the terms of the tenancy in a way that is not "obviously insubstantial or incapable of adversely affecting the guarantor", and you do it without the guarantor's consent, the guarantor can be discharged from liability.

Later landlord-and-tenant cases confirm:

A guarantor's liability will normally not continue beyond the end of a fixed term unless the guarantee makes that very clear (for example Junction Estates v Cope).

Significant changes (new fixed term at higher rent, major term variations) can release a guarantor unless the deed explicitly says it survives those changes and the guarantor has agreed.

In the new Renters' Rights world, where tenancies are periodic from day one, you want your deed to say in plain terms that it applies for as long as the tenant remains in occupation under that tenancy (including any statutory or contractual continuation), and to cover properly notified rent increases. Landlord-side templates are already being re-written for exactly this reason.

Death of a guarantor

General contract law position:

Existing accrued debts at the date of death can usually be claimed against the guarantor's estate.

Ongoing / future liabilities may end unless the deed explicitly says otherwise and that wording stands up.

So in practice, once a guarantor dies you should:

Review the deed.

Re-underwrite the risk: consider requiring a new guarantor or adjusting how comfortable you are with the tenant.

4. Referencing, students and Renters' Rights wrinkles

Referencing the guarantor

You absolutely should reference guarantors:

Credit check.

Income and employment (payslips, accountant letters).

Homeowner / equity position where possible.

Shelter's guidance to guarantors is clear: guarantors are jointly liable and can be sued just like the tenant; courts expect you to have treated this as a serious underwriting decision, not a name on a form.

Students

For students you often see:

Parent or guardian as guarantor.

University-backed guarantor schemes in some cities (common in PBSA, less in standard PRS).

You treat parent guarantors the same as anyone else: full deed, full explanation, full referencing.

Renters' Rights Act impact

Because the Renters' Rights Act abolishes new fixed terms and everything is periodic from the start, the old "fixed-term guarantee then maybe SPT" analysis changes.

What that means in practice:

A vaguely drafted guarantee that only talks about "the fixed-term tenancy" is now even less helpful, because there is no fixed term.

You should build in:

A clear statement that the guarantee runs for as long as the named tenant remains in occupation under that tenancy, up to a maximum period or monetary cap if you want.

A review / release clause -- for example, you agree to review the need for the guarantor after 12-24 months of clean payment history, or on written request.

This is both fair to guarantors and helpful to you, because a court is more likely to see it as a reasonable, balanced contract rather than an open-ended trap. Landlord-side commentators are already updating deeds along these lines.

5. What forums get wrong about guarantors

The mistakes to call out in your PropertyKiln guide:

"Any guarantor form is fine, it just scares them into paying."

Courts and advisers like Shelter are very used to challenging poorly drafted guarantees: no deed, no proper disclosure, unfair or unclear terms, or big tenancy variations without consent.

Result: your "guarantor" can walk away in court.

"Once a guarantor has signed, they are liable for anything forever."

Case law (including the application of Holme v Brunskill) says a guarantee will usually not survive major changes or new tenancies unless the wording is crystal clear, and even then there are limits.

"You don't need to give guarantors the tenancy, just a one-page letter."

Multiple firms flag that guarantors must see the tenancy terms they are backing; hiding or not providing the agreement is a recipe for a successful challenge on enforceability.

"Guarantor means you don't have to care about the tenant's finances."

A weak tenant plus a weak guarantor is still a weak covenant. You can sue either, but enforcement against both may be useless if neither has assets or income.

For PropertyKiln, the line is:

A guarantor is only as good as the deed and the person behind it. In the Renters' Rights era you want a properly drafted, witnessed deed that spells out exactly what is guaranteed, for how long, and how it interacts with a rolling tenancy and rent increases. If your current process is "download a free template and get Dad to scribble on it", you do not have a guarantor, you have a false sense of security.

Legislation tracker, budget coverage, new tools. Free, no spam.

Didn't find what you were looking for?