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F A C T S H E E T

Letters of Guarantee

A letter of guarantee is normally asked of a tenant who can offer no evidence of their own financial standing (often a tenant who is a student or self-employed).

Under a letter of guarantee, the guarantor guarantees to meet the financial obligations the tenant is about to enter into.

For a guarantee to be valid, it has to be in writing and signed by the guarantor. It is also essential that the document of guarantee is signed by the guarantor before a tenancy is granted to the prospective tenant. If it is not, the guarantor has not received any benefit, and will not be bound by his promise to pay if the tenant defaults. It is a good idea to suggest the guarantor seeks legal advice, as there is a possibility, if the guarantor signed the agreement without being given the opportunity to understand it, it would not be enforceable.