Guarantor

What is a guarantor?

A guarantor is a person or organisation that agrees to meet a tenant's's rent and other tenancy obligations if the tenant fails to do so. In practical terms, this means that if your tenant stops paying rent or leaves the property owing money, you can pursue the guarantor for those sums instead. The guarantor essentially co-signs the financial risk of the tenancy, without having any right to occupy the property.

Guarantors are most commonly used when a tenant's financial profile raises questions, for example, first-time renters, students, people who have recently moved to the UK, or those whose income is below the typical rent-to-income threshold (usually 2.5 to 3 times the annual rent). They are also increasingly used when tenants are on benefits, though the Renters' Rights Act restricts a landlord's ability to refuse applicants solely on this basis.

What does a guarantor actually guarantee?

This depends on the wording of the guarantee agreement. A well-drafted guarantor clause should specify precisely what the guarantor is liable for and you should not rely on a verbal agreement or a poorly worded clause if you want the guarantee to be enforceable.

A standard guarantee covers unpaid rent. A more comprehensive guarantee extends to damage to the property beyond fair wear and tear, cleaning costs, and legal costs incurred in recovering sums owed. The scope matters: if your guarantee only covers rent arrears and your departing tenant leaves the property in a poor state, the guarantor may not be liable for the remediation costs.

You should also pay attention to whether the guarantee is limited in time. Some guarantors agree to stand behind a fixed-term only and argue they are released when the tenancy becomes periodic. To avoid this, your guarantee agreement should explicitly state that liability continues for the duration of the tenancy, however it is structured.

How to take a guarantor reference

Referencing a guarantor is just as important as referencing the tenant. You should carry out a credit check, verify employment and income (the guarantor's income typically needs to cover 36 times the monthly rent, or a similar multiple, to demonstrate they can absorb the liability), and confirm their identity. Our article on tenant vetting gives broader context on the referencing process.

A guarantor who is based abroad can be harder to pursue through the courts if things go wrong. Many landlords prefer to require a UK-based guarantor for this reason. Where a UK-based guarantor is not available, some landlords use a specialist rent guarantee insurance policy instead, which provides similar financial protection without requiring an individual to underwrite the risk.

Guarantor versus rent guarantee insurance

Rent guarantee insurance is a policy that pays out if your tenant falls into rent arrears. Unlike a guarantor, it does not require you to find and vet an individual willing to take on the liability. It typically requires an initial referencing check to qualify, and policies vary in what they cover and for how long. For landlords who want certainty without the complexity of managing a guarantor arrangement, it can be a sensible alternative, though the cost of the premium should be factored into your rental yield calculations.

What happens if a guarantor dies or goes bankrupt?

If a guarantor dies, their estate may still be liable for obligations that accrued before death, depending on the terms of the guarantee. Ongoing liability will depend on whether the guarantee survives into the estate. This is a point worth clarifying with a solicitor when drafting the agreement. If a guarantor becomes insolvent, their practical ability to meet obligations falls away, even if the legal liability remains. In both cases, it is prudent to act quickly to secure a replacement guarantor or alternative protection.

Frequently asked questions

Is a guarantor agreement legally binding?

Yes, provided it is correctly drafted and executed. A guarantor agreement should be in writing, signed by the guarantor, and ideally witnessed. If it is not in writing, it is unenforceable in England and Wales under the Statute of Frauds 1677. Always use a written agreement.

Can a company act as a guarantor?

Yes. A company can act as a guarantor, and this is sometimes used in the context of corporate lets where an employer underwrites a senior employee's tenancy. The company's financial standing should be verified in the same way as an individual guarantor's, company accounts and credit checks both apply.

Does a guarantor need to sign the tenancy agreement?

No. The guarantor signs a separate guarantee agreement, not the tenancy agreement itself. The guarantee should clearly identify the tenancy it relates to, the address, the tenant, and the obligations covered.

Can I require a guarantor if I accept DSS tenants?

This is a nuanced area. The Renters' Rights Act restricts blanket refusals of applicants on benefits, but it does not prevent landlords from applying financial criteria consistently. If you require all tenants whose income does not meet your standard threshold to provide a guarantor, you can apply the same requirement to tenants on benefits, the key is consistency. Our guide on DSS and DWP tenants explores this in detail.

Last reviewed: April 2026 by the August editorial team. This entry reflects the law in England as at April 2026. Always seek legal advice when drafting guarantee agreements.

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