Are you planning to sign a residential lease as a landlord or tenant? In the context of a lease agreement for a primary residence, rental guarantees are a central concern for both parties. Among the most common mechanisms is the joint and several guarantee agreement, often required by landlords, particularly in high-demand areas. What exactly does this legal term cover? What are the effects, advantages, and limitations of a joint and several guarantee agreement? Here is a closer look.
What is a joint and several guarantee agreement?
A joint and several guarantee agreement is a written commitment by which a person, known as the guarantor, undertakes to assume responsibility for the tenant’s debts in the event of default. This commitment covers rent, as well as charges and any tenant-related repairs owed by the tenant (for example, damage to furniture provided in a furnished rental).
The distinguishing feature of a joint and several guarantee lies in the immediacy of this commitment: the landlord is entitled to seek payment directly from the guarantor from the first unpaid amount (unless otherwise stipulated), without first taking legal action against the tenant.
This agreement therefore provides reinforced security for the landlord when signing a residential lease. It enables the landlord to protect against potential unpaid rent. A guarantor may be requested for all types of leases: unfurnished, furnished, or mobility leases.
Simple vs. joint and several guarantee: what are the differences?
It is essential to distinguish between a simple guarantee and a joint and several guarantee, as they are often confused.
- With a simple guarantee, the landlord must first take action against the tenant before calling upon the guarantor (such as issuing a formal payment order through a bailiff). In addition, the guarantor may require the creditor to pursue the tenant’s assets before requesting payment.
- Conversely, a joint and several guarantee removes this benefit of discussion: the guarantor is bound by the same level of obligation as the tenant.
A joint and several guarantee therefore provides greater legal and financial security. It is a tool designed to better protect a rental investment that carries risks for the landlord (see also the steps of a real estate purchase).
Why use a joint and several guarantee agreement when signing a lease?
A joint and several guarantee agreement is generally used when the tenant presents a profile considered riskier by the landlord, due to insufficient income or unstable employment. This may include, for example, students or young professionals.
This type of protection may also be used when signing a lease in highly competitive rental markets, particularly in high-demand areas where application screening is rigorous.
This mechanism complements other safeguards such as the security deposit or unpaid rent insurance (GLI). Note, however, that a landlord may not combine GLI with a joint and several guarantee, except in specific cases (student or apprentice tenants).
What must a joint and several guarantee agreement contain to be valid?
To be valid, a joint and several guarantee agreement must comply with strict formal requirements. It may be executed privately or notarized and must include several mandatory details (similar to a lease agreement):
- Identification of the parties (landlord, tenant, and guarantor).
- Address of the rented property.
- Amount of rent and charges.
- Terms for annual rent revision.
- Duration of the commitment.
- Nature of the guarantee (simple or joint and several).
- Signature of the guarantor confirming their consent.
The agreement may also include a handwritten statement by which the guarantor undertakes to pay the landlord what the tenant owes in the event of default, within a specified limit written in both words and figures. This statement must comply with current legal requirements and is not systematically mandatory.
Note that the residential lease may mention the existence of the guarantor, although this is not a legal obligation. In practice, the guarantee agreement is most often attached to the lease.
What is the duration and scope of the commitment?
The guarantor’s commitment may be for a fixed or indefinite duration.
- Fixed duration: the agreement ends automatically on the specified date, for example at the end of the lease term (3 years for an unfurnished lease or 1 year for a furnished lease).
- Indefinite duration: the guarantor remains responsible for the entire duration of the current lease, even if they choose to terminate their commitment (without needing to provide a reason). They remain liable for sums due until the lease expires.
This agreement generally covers all rental obligations: unpaid rent, charges, late payment interest, legal costs, and even restoration work if it falls under the tenant’s responsibilities. Note that there is no statutory cap, but the landlord may specify a maximum liability amount in the agreement, for example up to 12 months’ rent.
What risks does the guarantor face?
Acting as a joint and several guarantor is a significant commitment: in the event of tenant default, the guarantor may be required to pay substantial sums, with no cap if none is specified in the agreement. They may also face legal proceedings and deterioration of their own financial situation, potentially lasting until the end of the lease.
It is therefore strongly recommended that any guarantor carefully assess the scope of their commitment, verify the duration and guaranteed amounts, and, if necessary, seek advice from a legal professional or real estate agency before making a decision.