Member

170: After Clause 21, insert the following new Clause— “Restriction on landlord’s ability to require tenant to provide guarantor(1) A relevant person must not, in any of the circumstances set out in subsection (3), require a person, as a condition of the grant of a relevant tenancy, to provide a guarantor in relation to the observance or performance of the tenant’s obligations under the tenancy.(2) For the purposes of this section, requiring a person to provide a guarantor includes accepting an offer by that person to provide a guarantor.(3) The circumstances are—(a) that the person has paid a tenancy deposit or has been assisted under a deposit scheme,(b) that the person is required to pay rent in advance of one month’s rent or more, (c) that on a reasonable assessment of their means the person’s income (including state benefits received and any other lawful source of income) is sufficient to enable them to pay the full rent due under the tenancy,(d) that arrangements will be made for housing benefit or the housing element of universal credit to be paid directly in respect of rent to a relevant person,(e) that the relevant person has entered into a contract of insurance under which they are insured against non-payment of rent, or(f) such other circumstances as may be prescribed by the Secretary of State.(4) In any other case where a relevant person lawfully requires a person, as a condition of the grant of a relevant tenancy, to provide a guarantor, the sum for which the guarantor may become liable under the relevant guarantee may not exceed a sum equal to six months’ rent.(5) In any case where a relevant person lawfully requires a person, as a condition of the grant of a relevant joint tenancy, to provide a guarantor, the sum claimed under the guarantee may not exceed such proportion of the loss as is attributable to the act or default of the individual tenant on whose behalf the guarantee was given; and if such proportion cannot be proved, may not exceed the sum obtained by dividing the total loss by the number of tenants.(6) In this section—a“guarantor” is a person who enters into a guarantee in relation to a relevant tenancy;a“guarantee” is a contractual promise to be responsible for the performance of an obligation owed by the tenant to a relevant person under the tenancy if the tenant fails to perform the obligation;a“deposit scheme” includes a scheme whereby a sum payable by way of deposit or a bond or guarantee is provided by a local authority, registered charity or voluntary organisation for the purpose of providing security to a landlord for the performance of a tenant’s obligations under a tenancy;a“tenancy deposit” has the same meaning as in section 212(8) of the Housing Act 2004;“relevant person” has the meaning given by section 16M(1) of the 1988 Act.”Member's explanatory statement This new clause would restrict the circumstances in which a landlord can request a guarantor.