Rent guarantee or friendship guarantee?
My best friend is in a tricky situation. He needs to find a new place to live as soon as possible, but the housing associations keep rejecting his application because of his financial situation. I've agreed to act as guarantor so that he can get his head above water, but I'm still wondering whether this exposes me to problems that could ruin our relationship.
R, Geneva
In short: you want to make a commitment to eventually pay the rent instead of your friend... Or at least, if necessary, more quickly than he does.
Under Swiss law, there are several mechanisms for «guaranteeing» a tenant. The best known is the «surety bond» provided for in art. 492 et seq. of the Swiss Code of Obligations (CO), under which a person promises the landlord that he will be liable for the debt if the tenant fails to pay. Where the guarantor is a natural person and the amount exceeds CHF 2,000, the law requires that the agreement be in the form of a notarised deed. Otherwise, such a commitment is null and void.
But housing associations know how to be imaginative. They sometimes talk about a joint and several liability or «joint and several debtor». This means that you don't just guarantee the debt: you become a debtor in the same way as your friend. The landlord can then claim the full rent directly from you, without even suing the tenant first. It's a bit like signing the lease yourself.
However, recent case law reminds us that the courts are cautious in examining such arrangements when the form of guarantee has been circumvented. If you are not a professional familiar with sureties, have no personal interest in the transaction and are unaware of the exact scope of your signature, a judge could reclassify such an undertaking as a guarantee subject to the authentic form, and therefore invalid if it has not been notarised.
In practical terms, it all depends on what you intend to sign. If the document refers to you as a «guarantor» without a notarial deed, there is a potential formal defect. If it refers to you as a «joint and several debtor», in principle you will be bound like a tenant. In all cases, your commitment will generally cover unpaid rent, incidental expenses and sometimes damage to the property.
So standing as guarantor is a kind gesture... but a very serious one from a legal point of view. Before you sign, make sure you analyse the situation carefully so that you don't risk losing your money and your friend!
