A well-known lettings agency has made the shocking move of asking a landlord to be a guarantor for their own tenants, it has been revealed.
Julie Ford, who is a mediator at PRS Mediation, says a female landlord has been in touch with her to ask her for help with a problem and during the discussions revealed she was named as guarantor for her own tenants.
This highly unusual situation means that, should the tenants stop paying the rent, it will be her who covers their payments.
The landlord was asked by her lettings agency to be the guarantor after it was recommended that she take out rent guarantee insurance as one of the two people renting the property had an insecture job and therefore the insurance company involved asked that they provide a guarantor, paperwork for which Ford has been shown.
The situation came to Ford’s attention after the landlord had requested vacant possession of the property when her circumstnaces changed and she needed to move back in. But her lettings agency had already renewed the rental contract without telling her – which led Ford to look at the paperwork more closely.
The landlord has been advised to seek specialist legal counsel to effect an eviction, and is expected to report the lettings agency to the relevant redress scheme and/or Trading Standards.
Baffled
“I am baffled by this and am don’t even understand how the rent guarantee insurance company could have allowed this to go through,” says Ford in a video that has gone viral. “Someone clearly isn’t looking at the admin.”
She also suggests that using landlords as guarantors for their own tenants may be a new ruse used by some lettings agencies during the cost of living crisis to fill properties when tenants fail referencing or rent guarantees insurance is required but the tenants cannot provide a guarantor.
It’s certainly a loophole – the various industry codes of conduct make no reference to the practice and for example both the PRS redress schemes make it clear in their codes of conduct that guarantors are separate to landlords and tenants, but don’t exclude a landlord being the guarantor.
But as Ford points out, most landlords would not want to end up paying the rent for their own tenants and should refuse such a request.
