A spanner has been thrown into the professional rent guarantor sector after the Government published updated Tenant Fees Act advice following the go-live of the Renters’ Rights Act.

The new guidance warns landlords and letting agents that any professional rent guarantor service contracts that were issued before 1 May this year – when the Renters’ Rights Act went live – may be invalidated.

This is because the updated guidance stresses that after 1 May while tenants may ‘choose’ a professional rental guarantor service, it will be a prohibited payment if they are ‘required’ to take out such insurance as part of a tenancy agreement and not given the opportunity to make a free choice of provider.

Rent guarantors

Recent research showed that following the legislative changes, half of all tenants are likely to need a guarantor of some sort when entering a new tenancy.

“If a guarantor agreement was entered into before 1 May 2026, then the terms of that agreement may be affected by the tenancy reforms included in the Renters Rights Act,” it says.

“Guarantors should consider reviewing any existing guarantor agreements in place and obtain the consent of the landlord to any variations to the agreement that may be required.

If a guarantor agreement was entered into before 1 May 2026, then the terms of that agreement may be affected by the tenancy reforms included in the Renters Rights Act.”

“You or your guarantor may wish to seek independent legal advice if you are unclear whether a guarantor agreement is affected.”

The Neg has contacted The Ministry of Housing, Communities and Local Government for clarification what these variations may entail but so far it has not responded.

RentGuarantor, one of the larger providers of professional rent guarantor products to landlords and letting agents, does have a view.

Existing agreements

Bruce Evans, its Chief Commercial Officer says: “Updated guidance on the Tenant Fees Act for tenants, while somewhat vague, doesn’t undermine existing guarantor agreements for RentGuarantor’s customers.

“As you would hope from any credible provider, our customer contracts have been reviewed internally – including those in place before the new rules were implemented – to ensure full compliance.

“Updates were not required because our terms have never contradicted the new rules even before they came into play.

“We agree that empowering tenants to understand their agreements – regardless of provider – is essential.

“It is also crucial that lettings and referencing agencies promote consumer choice and fairness; those who do not offer a choice of rent guarantor options could find themselves in breach of the Act.

“This could apply to situations where agencies recommend a single choice of provider without an alternative, and also if a tenant brings in their own provider which is declined for reasons that suit the agent.

“Our partner agreements with agents actively encourage them to offer choice and we provide guidance and marketing support on how to do this effectively.”