Guarantors are a concept we are more used to hearing about in the banking sector but in these poor economic times they are a way of landlords getting a bit of peace of mind and tenants that do not look terribly reliable on paper getting, somewhere to live.
Another name for what we often refer to as guarantors is a surety agreement and the idea is quite a simple one. If the prospective tenant, for whatever reason does not come across very well on paper then they can have a friend or relative agree to back them financially if they are unable to pay their rent.
In practice this means that if the tenant does not pay any sum owed the landlord in a timely fashion then the landlord can pursue the guarantor for the money.
This can make a lot of sense for all concerned in some cases. A tenant who does not look too good on paper to a landlord may not seem a risk at all to family and friends who are more aware of their actual character. For example a prospective tenant who has less than a six month history of renting may look like a risk to a landlord but a friend or family member who knows them to be trustworthy in financial matters may not perceive there is any risk at all.
A surety agreement can, in some cases, be a great way for everyone to get what they want.
I think in the current climate it is good practice to get try and get Guarantors on all tenancy agreements.
