If you`re considering renting out a property, it`s important to have a tenancy agreement in place that includes a guarantor clause. This clause protects both the landlord and the tenant by ensuring that if the tenant fails to meet their rental obligations, the guarantor will step in and cover any losses.

What is a guarantor clause?

A guarantor clause is a provision in a tenancy agreement that requires the tenant to provide a guarantor who will assume responsibility for any unpaid rent or damages in the event the tenant is unable to meet their rental obligations. The guarantor is typically a friend or family member who agrees to be financially responsible for the tenant`s rent and any costs incurred due to damage or unpaid bills.

Why include a guarantor clause?

Including a guarantor clause in your tenancy agreement provides an added layer of security for both the landlord and the tenant. Landlords benefit from having a guarantor`s financial backing, as it ensures they will be able to recover any outstanding debts owed to them. Tenants, on the other hand, benefit from having the support of a guarantor who can help them secure a tenancy despite any financial limitations or credit history issues.

What should be included in a guarantor clause?

When drafting a guarantor clause, it`s important to be specific and include the following information:

– The name and contact information of the guarantor

– The terms of the guarantor`s obligation (i.e. will they be responsible for all rent and related costs or just a portion?)

– The circumstances under which the guarantor`s obligation is invoked (i.e. late rent payments, damages, etc.)

– The duration of the guarantor`s obligation (i.e. will they be responsible for the entire lease term or just a portion?)

– The procedure for invoking the guarantor`s obligation (i.e. how and when the landlord can contact the guarantor)

– The relationship between the tenant and the guarantor (i.e. parent, friend, relative, etc.)

Overall, including a guarantor clause in your tenancy agreement is a smart move for both you and your tenant. Make sure to draft a clear and specific clause to ensure that both parties are protected in the event of any issues.