It is a common requirement for tenants to have a guarantor countersign their tenancy agreement, often by a relative or friend. In fact it is so commonplace that unfortunately it is sometimes not afforded the appropriate level of consideration – you know and trust this person, you have a long standing relationship and you would be prepared to offer some financial assistance to them if and when necessary, what else should you consider?
If you act as a guarantor under a joint tenancy agreement you are signing as guarantor for all the tenants listed on the agreement. The landlord might not require all tenants to have a guarantor. The model tenancy form allows guarantors to act as guarantor for a specific tenant, but the tenants themselves are jointly liable under the agreement. This means that the landlord can pursue you for rent or damage under the tenancy by any of the joint tenants.
Relationships can breakdown between tenants, or one tenant may want to leave the property, but terminating a Joint Private Residential Tenancy requires agreement of all tenants.
Section 44 of the Private Housing (Tenancies) (Scotland) Act 2016 provides:
“No termination by parties except in accordance with this Part A tenancy which is a private residential tenancy may not be brought to an end by the landlord, the tenant, nor by any agreement between them, except in accordance with this Part.”
The tenant you act as guarantor for will be liable under the tenancy until it is terminated or assigned. So when you sign as a guarantor on behalf of your friend or family member, take heed that you are also taking on the additional risk of signing on behalf of the individual(s) they are living with, which will extend for as long as the joint tenancy agreement is in place, even if your relative or friend is a good tenant or has left the property.
There are steps you can take to protect your legal position. If you require advice before acting as Guarantor under a tenancy agreement, we at Jackson Boyd are happy to assist you.