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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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I am in conversation with a letting agent about the terms of

Resolved Question:

I am in conversation with a letting agent about the terms of a possible lease on a 1 bedroom studio flat in London. The letting agent would like me to nominate a guarantor to vouch for potential rent arrears. I believe this is a common formality.

My parents are willing to fulfil this role, however, they live abroad. In the event that the letting agent raises an objection to dealing with an overseas guarantor, I would like to be in a position to name an intermediary at a law firm here in London who would be willing to act as locally for the purposes of lease guarantee.

Are you able to inform me:

a) what this service is called in the UK property market?

b) where best to look for suitable solicitor firms?

Incidentally my parents, although octogenarians, are university educated, and have mastered the internet. We correspond by e-mail on a weekly if not daily basis.

Thanks
Jonathan
Submitted: 2 years ago.
Category: Law
Expert:  Joshua replied 2 years ago.

Joshua :

Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.

Joshua :

May I ask if you are working and if you have much credit history in this country please?

Customer:

I am not currently in employment. I do receive Jobseeker's Allowance. I have previously worked at large corporations both in the UK and overseas as well as at a UK management consultancy.

Joshua :

Thank you. the reason for my question is if you were in employment and had an established credit history, should be no real reason for the agent to ask for a guarantor but in the circumstances, it would be relatively standard practice.

Customer:

I have purchased an Experian credit report dating back 4 years. I have been in the UK since 2006

Customer:

My Experian report is clear, but I have been staying with a friend who has not been requiring rent from me.

Customer:

I have previous tenancy information to offer from lettings in London and Aberdeen.

Joshua :

the usual approach where rent guarantors live abroad would be for rent to be paid upfront either for six months or for 12 months as can be agreed. it is possible to seek a solicitor to provide a guarantee but the solicitors requirements would be relatively expensive in terms of money-laundering checks because we are so heavily regulated these days and the solicitor would also request monies to be paid into his client account in order to provide the guarantee. In addition, there would be the solicitors fee to pay and so what you effectively have is the same situation as paying rent upfront with all of the additional paperwork not to mention the solicitors fee which would likely at several hundred pounds. accordingly, such services are not cost-effective and therefore rarely used in day-to-day lettings transactions

Joshua :

as above, the common approach in such situations would be for rent to be paid upfront; ideally you would negotiate three months intervals that this is unlikely to be accepted. 12 months would commonly be accepted but six months would also be acceptable for some landlords depending upon how motivated if they are to rent their property out

Customer:

All the letting agent has asked for is a month's upfront deposit. I believe that the letting company owns the property.

Customer:

In Aberdeen in 2003-4 I was asked by a letting agent to supply a credit card with sufficiently high credit limit in connection with a flat rental to guarantee rental payments. It was unnecessary and never used, but provided adequate security. Are similar schemes available in England, and how are they regulated?

Joshua :

if this particular lettings agent will only accept a rent guarantor, they will typically not accept overseas guarantors, and accordingly, unless you have friends of family willing to act as a guarantor in the UK, for the above reasons, it is unlikely you will be able to proceed on this basis. if your parents have funds available to assist, as above, rent can be paid upfront but it is lettings agency will not accept upfront rent payment - some won't but it is unusual - then there are plenty of lettings agents that will. if paying rent upfront, ensure that you have confirmation that either there is no mortgage on the property or if there is a mortgage that the rent will be held in a separate client account are not directly transferred to the landlord in one lump sum

Joshua :

if you have access to a credit card, a similar approach could be taken in London however in truth it is worth very little to the lettings agent because you could simply cancel the card shortly after providing at preventing them from other debiting funds so it is unlikely that sensible lettings agents would proceed on this basis

Customer:

I am perplexed that the legal system offers little apparent alternative to naming a personal acquaintance in the UK as guarantor, which, is quite frankly, fraught with just as many potential difficulties as dealing with credit card guarntees, in my opinion.

Customer:

Have you any other alternatives to suggest that may both satisfy the potential letting agent and prove easily workable for the prospective tenant?

Joshua :

credit cards are not typically used for the simple reason that the credit card holder can simply cancel the card after having provided the agent with the details therefore preventing the agent from debiting any monies. They are therefore of no real value to an agent. the problem of course is that by giving a guarantee, the person giving the guarantee is same as if you don't pay the rent they will and therefore it is of relatively little surprise that there are not really any such bodies or individuals that would be willing to give such a guarantee.

Joshua :

The only real solutions if you are unlikely to satisfy credit checks because of presently lack of employment, are for rent to be paid upfront. it is in principle possible for a UK organisation to provide a guarantee, such as through a solicitor and so on but as above, that organisation would require monies to be transferred under their control in order to give the guarantee and of course which I some sort of fee for their service so given this, it would be more cost effective for such monies to be transferred to the agent as upfront rent

Joshua :

the other option would be to look at short-term lets whereby you rent a room either week to week or month to month. such lettings require little in the way of any form of upfront payment or security because you pay rent for short periods in advance and the landlord can evict you at short notice if you fail to pay. of course this type of letting may not be ideal because it gives little in the way of security of tenure but it can serve as a solution if your parents do not have funds available to cover an upfront rent period until you get back into employment when everything becomes a lot easier because you can apply on the basis of having an income

Customer:

I'm expecting to have pay the rent in advance anyway. That has been the norm in the rental agreements I have committed to in this country, regardless whether I have been in employment or not.

The issue is that I'm being asked to nominate a guarantor in addition to paying upfront and lodging a deposit. I don't want to be rejected from the tenancy because my guarantor happens to live overseas.

Joshua :

Many agents will accept upfront rent payment of 6 months instead of a guarantor. If this agent won't then there are plenty more that will. From what you say you can offer an overseas guarantor but typically an overseas guarantor will be rejected as they are not straightforward to pursue legally for rent and difficult to credit check

Joshua :

There are unfortunately only the above relatively limted options available for shorthold tenancy agreements. If these terms cannot be met, as above you could consider a flat or house share whereby you rent a room in someones house. It is of course different to having your own place but can still be comfortable and give you accomodation until you are can satisfy the fairly restrictive requirements for a tenancy for a property such as that you are presently seeking.

Joshua :

I recently had a client, retired worth in excess of £2million who having just sold his house want to rent and because he was retired the lettings agent would only rent to him if he paid rent up front - which was ridiculous - but lettings agents work to ticking boxes and their big box is "employment". If you are not employed you are usually faced with up front rent payment or a UK guarantor of good standing.

Joshua :

Is there anything above I can clarify for you?

Customer:

Your comments enlighten even if they don't help much. I shall have to see what sort of a solution I can arrange on an individual basis. Regards

Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience: LL.B (Hons), Higher Prof. Dip. Law & Practice
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