Parents of students 'could be liable' for damage caused by people they don't know

Parents of students 'could be liable' for damage caused by people they don't know An expert is urging parents to check the small print Parents of students are being warned that they could be liable for damage caused by people they don't even know. Those agreeing to act as guarantors for teenagers moving into student houses are being warned to read the small print carefully, as they could potentially become liable for unpaid rent or damage caused by other tenants. The Renters' Rights Act, which came into effect earlier this year, stops an agent or landlord from asking for rent to be paid in advance, potentially meaning more parents, relatives and friends will be asked to act as guarantors for residential tenancies. With thousands of university students relying on a guarantor, many families may assume they are only taking financial responsibility for their own child. Tim Wakelin, founder of Guarantor Insure, warned that shared tenancy agreements could include “joint and several liability”, potentially allowing a landlord to pursue one guarantor for liabilities relating to the wider tenancy rather than simply their child's individual share. Guarantor Insure says that under such an agreement, if another tenant stops paying rent or causes damage, a landlord may be able to pursue an individual guarantor for the full amount, depending on the wording of the agreement. Tim said: “The biggest message to any parent who is asked to become a guarantor is: check the contract before you sign it. If you are joint and severally liable, then as a guarantor you could be asked to pay for damage or unpaid rent caused by the other tenants. “Parents naturally think, ‘I know my son or daughter and I trust them, so I'm happy to guarantee their rent'. What they may not appreciate is that they could potentially be signing something much wider than that. “In a student house, you may barely know the other people your child is moving in with, never mind their financial circumstances or their guarantors. Yet depending on the agreement you've signed, their actions could potentially become your financial problem.” Guarantor Insure says the risk was the reason the business was originally created, after its founders experienced the issue themselves while acting as guarantors for their own children's student tenancies. Its cover is designed for private individuals, guaranteeing shared student tenancies where joint and several liability applies. Its current product provides different levels of cover for student tenancy guarantors, including protection against qualifying unpaid rent and damage claims, alongside dispute resolution, legal cover and access to a legal helpline, subject to the policy terms. Tim expects the issue of guarantors to become increasingly important across the wider rental market following changes as a result of the Renters' Rights Act, including restrictions around landlords demanding large amounts of rent upfront. He believes that could result in more tenants being asked to provide a parent, relative or friend as a guarantor instead. He added: “This isn't about telling parents they shouldn't help their children. For many students, having Mum, Dad or another family member act as guarantor is what enables them to secure the property in the first place. “But signing a guarantee shouldn't be treated as a formality. You need to understand exactly what you're guaranteeing, how long that responsibility lasts and under what circumstances you could be pursued for money. “The potential problem is that people sign because they trust the person they're helping, without necessarily appreciating that the agreement may expose them to the behaviour of everybody else sharing that tenancy. Read the agreement carefully, ask questions if you don't understand it and make sure you know the potential financial liability before putting your name on it. “You wouldn't normally agree to guarantee the debts of a group of people you've never met without understanding the risks. A student tenancy shouldn't be treated any differently.”