FAQs – Apartment Lease Guarantor

By: ROS Team

For someone who recently moved into a new city or hasn’t had a chance to build a rental history. A guarantor on the lease can make the difference between getting your own home and having to live with your parents or friends. Before you ask someone to become a guarantor, let’s look at the most frequently asked questions about apartment lease guarantors.

What is a Lease Guarantor?

A lease guarantor is someone who signs a lease with the tenant but does not necessarily occupy the apartment. A guarantor becomes responsible for the financial obligations that the tenant doesn’t meet and can be held legally liable for anything the tenant violates in the lease agreement.

Why Do I Need a Guarantor?

To become a tenant, you may need to pay a deposit. In New York City, landlords often demand 40 times the monthly rent. This condition is difficult or impossible for many first-time renters and young professionals, especially in pricey places like San Francisco, where a studio apartment averages $2,300. If your income does not satisfy the landlord’s requirements, a financially secure guarantor may co-sign your lease.

You may need a guarantor if you have no rental or credit history or a low credit score. Landlords may not have proof of financial responsibility because recent grads haven’t built credit. A guarantor can help tenants with weak credit find landlords prepared to accept the risk.

Co-Signer vs Guarantor

These terms are often used interchangeably, but they are not the same. A co-signer is typically someone who signs a lease with the tenant and has a right to occupy the property. A guarantor, on the other hand, is someone who only takes on financial responsibilities if the tenant is unable to do so.

Who Can Be a Lease Guarantor

Someone close to you should serve as your guarantor, whether a family member or a close personal friend. You must also consider whether or not he or she is financially stable enough to pay the rent if you cannot make your payments.

It is possible for a work colleague, an acquaintance, or even a corporate organization to guarantee, though this is less usual these days. For example, when a company entity hires a contractor to come to town for a long-term work assignment, the business entity may function as the contractor’s guarantor. Moreover, government agencies can act as guarantors for low-income families that would otherwise be unable to get an apartment on their own, albeit this is an uncommon occurrence.

Are Guarantors Entitled to a Copy of a Tenant’s Credit Report?

Although a guarantor should know the tenant’s financial status, they are not entitled to a copy of the tenant’s credit report even if they ask for it. On the other hand, landlords have the right to check both your credit report and that of your guarantor to see if both parties have a healthy financial history.

When is a Guarantor No Longer Financially Liable?

Unless otherwise stated, a guarantor’s financial liability only ends when the tenant no longer occupies that particular apartment. This is usually referred to as an open-ended guarantor agreement.

How to Convince Someone to Become a Guarantor

A lot of responsibility goes into being a guarantor, so you should be very honest with him or she about what being a guarantor entails. Educate them on why you need a guarantor in the first place and provide some of your financial histories.

You’ll also need to give your guarantor a heads-up that they’ll be subject to a credit and background check. They’ll also have to provide copies of their pay stubs or bank statements and will have to sign the lease agreement. You should be realistic and not take it personally if someone declines your request to be a guarantor because it’s a big responsibility.

What to Do If the Guarantor Requests Changes to the Lease Agreement?

A tenant can find themselves in a scenario where the lease agreement provisions do not match what the guarantor has pledged to do financially. If you find yourself in this scenario, think about whether there is anything else you could do to persuade the landlord to agree to amend the lease. You may need to provide additional assurance to the landlord in the form of a reference letter or a more significant down payment or security deposit to convince the landlord to do so.

Does the Guarantor Have to be Local?

Where the guarantor lives depends solely on the landlord. Sometimes landlords require that guarantors live in the same city as the tenant or at least the same state. The precaution seems necessary since the guarantor has to make the payment when a tenant cannot do so, and having a guarantor in the same city may prove to be ideal for landlords when trying to recover outstanding fees.

Final Thoughts

Having a guarantor if you need one is a convenient solution, but it’s not the end of the world if you cannot find one. In most cities, some companies will act as guarantors. In addition, you can still explore other ways to find an apartment, like finding a sublet or living with a roommate.