If you're renting in Scotland and asked to provide a guarantor, or if you're considering asking someone to be a guarantor for a tenant, it's vital to understand exactly what this commitment involves. A guarantor provides financial security for the landlord, but their obligations are serious and legally binding.
What Does a Guarantor Do? A guarantor legally agrees to cover certain financial liabilities of the tenant if the tenant fails to meet them. This primarily includes:
- Unpaid Rent: If the tenant falls into arrears, the landlord can pursue the guarantor for the outstanding amount.
- Property Damage: Costs to repair damage caused by the tenant (beyond fair wear and tear) if the tenant doesn't pay.
- Other Costs: Potentially other costs specified in the guarantee agreement if the tenant defaults (e.g., cleaning costs, unpaid utility bills if explicitly covered).
The Deed of Guarantee: The guarantor's promise isn't just verbal; it's formalized in a separate legal document called a Deed of Guarantee. This document is distinct from the main Private Residential Tenancy (PRT) agreement but linked to it. Both the guarantor and the landlord sign the Deed of Guarantee. Legalmaster can generate compliant Deed of Guarantee documents alongside tenancy agreements.
Key Points About Guarantor Obligations:
- Legally Binding: It's a serious financial commitment. Guarantors should seek independent legal advice before signing.
- Duration: The guarantee typically lasts for the duration of the tenancy agreement it's linked to, including any continuation or renewal unless explicitly stated otherwise. Read the Deed carefully!
- Joint & Several Liability (Tenants): If guaranteeing for joint tenants, the guarantor is usually liable for the total rent/damages, not just 'one tenant's share'.
- Landlord Must Mitigate Loss: Landlords should still pursue the tenant first and take reasonable steps before demanding payment from the guarantor.
- Credit Checks: Landlords will usually credit-check potential guarantors to ensure they have the financial means to cover potential debts.
Being a guarantor is not a mere formality. It's a significant legal and financial responsibility. Ensure the Deed of Guarantee clearly outlines the scope and duration of the obligations before signing.
