To Guarantor or Not Guarantor: That is the Question
The number one question that landlords ask us at RentGuarantor.com is “Do landlords get charged for the rent guarantor service you provide?” It is a fair question and one with a short answer:
“No!”
The cost of the RentGuarantor.com service is borne by the tenant, not the landlord, so that is one less potential cost for the landlord to worry about.
This isn’t something we are blasé about though. We know from our daily interactions with both tenants and landlords that the subject of cost is a sensitive one. Buying a rent guarantee is clearly not a throwaway matter, especially for the tenant who is footing the bill.
We’re candid enough to say the natural preference for any tenant should be to provide a family member as their personal guarantor ahead of moving into a new rental property. After all, moving home has its associated costs already and a tenant should ideally keep these moving costs as low as possible.
However, the reality is that an increasing number of tenants don’t have a family member on hand to use as their rent guarantor, for whatever reason that might be. It might be for potential cost liability reasons, or it might be because there is no family member available to act as the guarantor.
Our service caters for this growing segment of the UK rental population. It’s definitely a growing segment too if our internal data is anything to go by, with rapid annual growth in registrations and completed applications in the most recent reporting quarter.
The Tenant Fees Act: why you shouldn’t be concerned
Another concern that landlords raise with us is around rent guarantor agreements potentially breaching the Tenant Fees Act. Understandably, landlords don’t want to get into any trouble by entering into an agreement which might fall foul of the law. We understand this concern.
The Tenant Fees Act of 2019 banned most fees associated with letting a new property, as well as placed a cap on deposit levels, as NRLA members will already know.
The good news for landlords is that rent guarantees do not fall under the Tenant Fees legislation.
Why? Well, it is because rent guarantees can be legitimately provided by an individual connected to the prospective tenant without any exchange of cash taking place. This means that when a tenant buys a rent guarantee from RentGuarantor.com, the tenant is choosing to pay for the rent guarantor service.
The landlord consequently does not need to worry about being on the wrong side of the law, something our existing partner landlords know already! As an added benefit, our partner landlords know that we have the backing of Lloyds of London insurance, which itself adds a deeper layer of reassurance to the service we provide.
Getting paid when a tenant defaults
Finally, a potentially thorny subject area: what happens when a tenant defaults.
We have a predefined process that lays out when and how a landlord will get paid out, and we are very clear and upfront about it before the tenant and landlord sign up to the rent guarantor agreement. This way, expectations are laid out for both parties right at the start of the tenancy with the tenant understanding what their obligations are.
If the tenant defaults on their payments and doesn’t settle their defaulted rent with the landlord, we pay the landlord the full amount of rent owed.
Our reputation among the rental landlord community is very important to us, and not only because the company was founded by and is run by an active landlord. We understand that landlords need to trust our service for it to work efficiently and effectively.
We’re on a real journey of discovery at RentGuarantor.com right now as we find out just how useful and fulfilling our service has become to so many tenants and landlords across the UK. These are only three general subject areas that we get asked about on a regular basis, but if you have any further questions you want to ask we’re only an email or phone call away. We’d love to hear from you.
