Guarantor Agreement / Deed of Guarantee for a Tenancy

Overview

A guarantor agreement (or deed of guarantee) is the document by which a third party — typically a parent, relative or employer — agrees to be liable for a tenant's obligations under a tenancy (rent, and often damage and other breaches) if the tenant fails to pay or perform. Landlords commonly require a guarantor where a tenant has limited credit history, is a student, or is on a lower or less stable income. Why this is usually executed as a DEED, not a simple contract: under English contract law, a promise is generally only enforceable if given for 'consideration' (something of value exchanged in return). In a guarantor arrangement, the guarantor typically receives nothing of value directly in return for their promise — the benefit runs to the tenant, not the guarantor. Because of this, a guarantee given as an ordinary signed contract can, in some circumstances, be challenged as unenforceable for want of consideration. Executing the document as a DEED avoids this problem entirely, because a deed is enforceable without consideration — it binds the guarantor purely by virtue of being validly executed as a deed. This is why the vast majority of tenancy guarantor documents in England and Wales are, and should be, drafted and executed as deeds, and this template does the same. Formalities for a valid deed: under section 1 of the Law of Property (Miscellaneous Provisions) Act 1989, a deed executed by an individual must (a) be in writing, (b) make clear on its face that it is intended to be a deed (e.g. by being described as a deed and using an attestation clause 'signed as a deed'), and (c) be validly executed — which for an individual means signed in the presence of a witness who also signs to attest the signature, and then delivered. Missing the witness requirement, or having a signature that is not properly witnessed, can be fatal to the guarantee's enforceability as a deed — this is the single most common drafting error in tenancy guarantees and should be checked carefully. Scope of the guarantee: the deed should state precisely what the guarantor is guaranteeing — typically rent arrears, but often also damage beyond fair wear and tear, and sometimes other breaches of the tenancy. It should also address whether the guarantee extends to any statutory periodic tenancy that arises automatically at the end of a fixed term, and to any rent increase during that period — a guarantee drafted narrowly to cover only the original fixed term may not extend to a renewal or to a periodic tenancy that follows, depending on its wording (this has been the subject of real litigation in England and should be drafted with care). Independent legal advice: because a guarantor deed can expose the guarantor to significant financial liability for someone else's tenancy, it is good practice — and in some circumstances advisable to avoid a later challenge — for the guarantor to take independent legal advice before signing, and for this to be recorded. When to use: whenever a landlord or letting agent requires a third-party guarantee to support a tenant's obligations under an assured shorthold tenancy. Common pitfalls: executing the document as an ordinary contract without a witness, undermining its enforceability; leaving the scope of the guarantee (arrears only? damage? statutory periodic tenancy?) unclear; and failing to record that the guarantor had the opportunity to take independent advice. This template is a drafting aid only and should be reviewed by a solicitor, given the strict formalities that apply to deeds.

Information to customize

• Landlord's full name

• Landlord's address

• Tenant's full name

• Guarantor's full name

• Guarantor's address

• Property address (subject of the guaranteed tenancy)

• Start date of the tenancy being guaranteed

• Scope of the guarantee

  E.g. rent arrears, damage beyond fair wear and tear, other breaches.

• Does the guarantee extend to any statutory periodic tenancy or renewal following the fixed term?

• Has the guarantor confirmed the opportunity to take independent legal advice?

• Witness's full name

• Witness's address

• Date of execution

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Frequently asked questions

Why must a tenancy guarantee be signed as a deed rather than an ordinary contract?

Because a guarantor typically receives no direct benefit ('consideration') for their promise, an ordinary contract of guarantee can in some cases be challenged as unenforceable. A deed is binding without consideration, provided it is validly executed — which is why tenancy guarantees in England and Wales are almost always drafted and signed as deeds.

What makes a document a valid deed?

Under section 1 of the Law of Property (Miscellaneous Provisions) Act 1989, it must be in writing, clearly state it is intended to be a deed, and — for an individual — be signed in the presence of a witness who also signs to attest the signature, then delivered. Missing the witness requirement is the most common error and can invalidate the deed.

Does the guarantee cover a renewal or periodic tenancy after the fixed term ends?

Only if the deed's wording says so. This has been the subject of real disputes in English law, so the guarantee should state expressly whether it extends to any statutory periodic tenancy or renewal following the original fixed term.

What can a guarantor be made to pay for?

Whatever the deed specifies — typically rent arrears, and often also damage beyond fair wear and tear and other breaches of the tenancy. The scope must be stated clearly, as a vague or unlimited guarantee is more likely to be challenged.

Should the guarantor get independent legal advice before signing?

It is good practice, given the potentially significant financial exposure involved, and can help avoid the guarantee being challenged later. Many landlords record in the deed that the guarantor had the opportunity to take such advice.

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