I read an interesting article in The Guardian the other day. Written by a fellow landlord, the article discussed the innovative notion of whether landlords should stop asking their tenants for a deposit at the start of a tenancy and instead ask them to name a guarantor, a person who becomes legally responsible for any future liabilities that may arise as a result of rent arrears or property damage.
In the writer’s opinion, this was a far more sensible approach for many reasons. Since a large number of tenants do not have one month’s rent (or more) lying around in their bank accounts, asking for a large deposit up front can put families under enormous financial hardship. There are also a number of stringent guidelines to follow when dealing with a tenant’s deposit, and if you screw up, you face a minefield of problems.
Asking a tenant to provide a guarantor is certainly one way of ensuring that someone pays when things go wrong, and if the guarantor is a member of the tenant’s family, they are less likely to default on the rent or trash the property. However, guarantees still have to be enforced when the need arises, which can be a lengthy process, so some kind of insurance cover would be a better idea.
There is no right or wrong way of tackling the issue. Ultimately it is whatever works for you, but the best way (for me) is to find a reliable tenant who pays their rent on time and keeps the property clean, tidy, and damage free.
