Legal questions raised about rent guarantor contracts
Summary
Updated government guidance under the Tenant Fees Act, issued after the Renters’ Rights Act came into force, has raised questions about whether some professional rent guarantor contracts entered into before 1 May may still be valid. The guidance also indicates that tenants must be given genuine choice over guarantor services, and that requiring a specific provider could amount to a prohibited payment.
Why it matters
Letting agents, landlords and referencing businesses may need to review how they offer and document rent guarantor products to avoid breaching tenant-fee rules. Surveyors involved in lettings, lease advice or property management should be aware of the compliance risk and the potential need to flag contract and process reviews.
Key points
- Government guidance suggests some pre-1 May rent guarantor agreements may be affected by the Renters’ Rights Act.
- Tenants must be able to choose a professional guarantor service freely; mandatory use may be prohibited.
- Landlords and letting agents are advised to review existing guarantor agreements and seek consent for any variations.
- RentGuarantor says its customer contracts remain compliant and that tenant choice should be promoted.
- The Ministry of Housing, Communities and Local Government has not yet clarified what variations may be required.
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