Guarantor

[Sandie]

I am being pressured to be a guarantor for a relative who is a tenant in a unit. What are the down-sides of this? I would like to hear other views on this.

Sandie

[jimO]

run forrest run

[Gladdynook]

you basically become liable for any unpaid rent and damages. if it is a fixed term tenancy, and your relative is unable to continue to service the rent, then you are liable until the end of the tenancy.

why is the LL requesting a guarantor? do they think your relative will fail to pay the rent? if so, perhaps they are right..

[Keys]

Run Forest! Run!

I am being pressured

[artemis]

As above, don't. Plenty of cases where the relative's finances fell apart and the guarantor was stuck with not only the money but a very difficult ongoing relationship. Better to offer financial help later if needed (if you can and want to), but you keep control rather than be hooked into a more or less open ended contract.

[Aston]

The fact that you are coming on here asking for advice, suggests that you are not totally comfortable with it.

I totally agree with others... DON'T DO IT.

[td91]

Do you trust this person? what are they like with money? are they likely to trash the house? why do they need a guarantor? do they have a stable income? why are you the person they are turning to as guarantor?

Think about questions like this. But do remember that you are liable for any arrears they get into, any damage they do to the house etc. Basically if the crap hits the fan and a tenancy tribunal order comes into play then you are going to be the one with an order in your name and the one who has to appear in court and if they end up owing money and don't pay it, it's your credit that gets a red mark against it.

[kapitibeanman]

If you do go ahead, & I know, we do mad
things from time to time, add a clause that
limits your liability to $x, x being a figure
you are willing to lose.

[Keys]

Comes down to the first four words in the thread.

[PC]

Don't do it.

But if you really have to - put limits on your liability e.g. max $5,000 and guarantee is valid for 6 months only.

[Maccachic]

You would be better off gifting some money with an agreement to pay you back, if you can't afford to lose the gift then don't do it.

[Ivan McIntosh]

Don't do it.

But if you really have to - put limits on your liability e.g. max $5,000 and guarantee is valid for 6 months only.

What PC and others have said....don't do it but put limits on if you really have to.

Also, if you absolutely must do this, make sure you are only guaranteeing the relative's share of liability....ie are they joint and several tenants with others that makes them (and you) liable for the full value of all rent for the property? If so get the guarantee limited to your relatives proportionate share.

[Sandie]

Many thanks for your replies. They are most helpful. The unit is managed by a large international firm. Tenant has never missed a rent payment. There have many complaints by the agent about the tenants management of the unit, however, the unit was not in a good state when my relatives tenancy began, and those who have been to the unit do not agree with the agent's claims. Agent wants to redecorate the unit, tenant was ordered to move next door, sign a new tenancy agreement and get a guarantor. Failure to do this resulted in a 90 day notice. I finally concluded that the agents complaints were a smoke-screen to win landlord's support. The new Tenancy Agreement and Deed of Guarantee would give agent legal authority to agent (multi-national firm) to sue guarantor for cost of redecoration. It took me a while to get my head around it all, but it's now on its way to the Tenancy Tribunal. It is an interesting scenario !! Again - many thanks. Sandie

[artemis]

Well that is very interesting, Sandie. I am not surprised it took a while to get your head round it. I think most of the replies to your original post assumed it was the relative pressuring you. There is a lot of experience on these boards about the Tenancy Tribunal, and tenancy matters generally, so do please feel free to ask. You will find very helpful people here.

Meantime you and or tenant will need to gather all the documentation you can for the TT, including dated photos, emails, inspection reports, records of conversations.