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Tenant's 'shadow' partner - guarantor or joint tenant?

Tuesday, March 12, 2019

IMG CREDIT: UNSPLASH

This week's question comes from Kelly (paraphrased): 

 

I have a lady tenant with kids who would prefer not to put her partner’s name on the tenancy agreement because her WINZ supplement would then be discontinued. I think she will need his income to be able to afford the property and if he is staying there I want him to be responsible for the rent, damage etc. Is it a good idea to add the partner as a guarantor on the agreement? If so how would one word that agreement?

 

Katrina O'Connor from Barfoot & Thompson kindly responds below: 

 

 

In shared tenancies, the best practice is to ensure that all tenants are named on the tenancy agreement so you benefit from the protections of “jointly and severally” liable. If the partner will be residing in the property this is the best course of action.

Usually, a guarantor is a parent or someone with assets so that in the event that the tenant breaches the terms of the Tenancy Agreement and the Residential Tenancies Act 1986, the Guarantor shall be liable for breach as if it were a party to the Tenancy Agreement. The Guarantor shall indemnify the Landlord for any liability or loss suffered by the Landlord as a result of or arising from any breach.

** Note ** When a beneficiary receives more money than they are entitled to due to not telling Work and Income they have a spouse or partner - for example, a woman in a de facto relationship while on the DPB, this is known as “Relationship fraud".

From 7 July 2014, a “relationship debt sharing” law has allowed Work and Income to investigate and prosecute both the client and their partner for benefit fraud. This applies to all debt where an investigation clearly shows that the partner has knowingly benefitted from benefit fraud.

 

If you have further questions feel free to contact koconnor@barfoot.co.nz.

Additional comment from the APIA: 

As an organisation, we do not condone fraudulent practices of any kind and caution landlords strongly against knowingly becoming associated, in any way, with fraudulent practices. Additionally, it looks as if your tenant is going to be hard pressed to meet weekly rent payments as they are. Considering rent is the primary cash source for many landlords, common sense would suggest that she poses too much of a risk and that an alternative candidate be considered for the tenancy. 

Do you have any tenancy related questions? Write to us at admin@apia.org.nz or hit us up on our social channels here and here

 

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