Indemnity for tenancy - deed of guarantee

[Dirk Gently]

Briefly, there are two students about to rent a house, our son and another boy. Our son needs a guarantor (us) whilst the other doesn't - or at least as far as the landlord is concerned.

But we're not happy to take on 100% of the risk in this way - as this is a joint and several tenancy the end result is that we're effectively acting as sole guarantor for both the boys!

One option is to get the other boy's parents added to the Deed of Guarantee, but that may take a while as the referencing process is slow and inefficient and they may lose the house in the meantime.


So we've thought about accepting a signed and witnessed document from the other lad's parents, which would indemnity us, as guarantors, against any liabilities incurred by their son.

Is this a reasonable way to share the risk, and if so please could someone suggest (or point me to) a suitable form of words for this document?

Thanks in advance

[R0b]

Re: Indemnity for tenancy - deed of guarantee

If you sign the agreement then there is nothing which obliges the other boy's parents to sign anything to indemnify you.

Have you suggested negotiating with the Landlord and saying whether or not the the other boy's parents can be added as a guarantor? Alternatively what about the option of removing the guarantor clause and perhaps increasing a deposit on the house as additional cover?

Its a standard clause for tenancies such as these so before you sign make sure you know what you are getting into.

[Dirk Gently]

Re: Indemnity for tenancy - deed of guarantee

Thanks - I understand that, which is why we want a separate document which will indemnify us.

As stated, we could have the other boy's parent added as an additional guarantor, but for various reasons that doesn't fit the required timescale - hence we're looking at this additional document - and agreement between the other parents ad us - which will indemnify us against any losses we're chased which may be incurred by their son.

[R0b]

Re: Indemnity for tenancy - deed of guarantee

So just as I understand this, the boy's parents cant be added as a guarantor, so you are going to sign the indemnity first and then seek a signature from the boy's parents afterwards? If that's the case then you are taking a big risk but as you say you understand that.

As for the indemnity, I would suggest it is made in the form of a deed as that avoids the need for consideration for it to be binding and the time you can bring a claim is extended from 6 years to 12. It should also cover the following:

"This Deed is made on XX XX XXXX"
1. The name of the parties to the deed
2. reference to the fact that the deed is made pursuant to the tenancy agreement
3. the wording of the indemnity would be along the lines of Party 2 shall indemnify Party 1 against all liabilities, costs, expenses, damages, losses and all other reasonable expenses arising out of or in connection with:

(a) ...
(b) ...
(c) ...

4. You should put in the governing law and jurisdiction which if its England then it will be governed by English Law and jurisdiction of the English courts.
5. the execution at the end should be "This deed has been executed and delivered by or on behalf of the parties to the deed on [date] ... " and a witness to the deed also is imperative


The above is just a very simple outline of what should be included - if you don't get it right then your indemnity might be defective and invalid.