When entering into a rental agreement, tenants are often required to provide a variety of documents and assurances to landlords. In some cases, one such requirement may be the presence of a rent guarantor.
Understanding what a rent guarantor is and whether you need one is crucial for prospective renters. Here's what you need to know:
What Is a Rent Guarantor?
A rent guarantor, also known as a lease guarantor, is an individual who agrees to take responsibility for paying rent in the event that the tenant is unable to do so. Typically, a guarantor is a family member or close friend with a stable income and good credit history. However, this individual is not required to live at the property or have a right to occupy it.
It is important to note that while "guarantor" and "cosigner" are used interchangeably, they are not the same. In contrast to a guarantor, a cosigner is usually a roommate or the spouse of the tenant who lives in the apartment. Cosigners are also required to sign the lease and have a right to occupy the unit.
Why You May Need a Guarantor
There are several reasons why a landlord may request a rent guarantor from a tenant:
Limited Credit History: Tenants with limited or poor credit history may be perceived as higher risk by landlords. In such cases, a guarantor with a strong credit history can provide assurance to the landlord that rent will be paid on time.
Credit Issues: Similarly, a tenant with a bad credit or a bankruptcy on their credit report may be perceived as higher risk by landlords and propery managers.
Low Income: If a tenant's income does not meet the landlord's income requirements, a guarantor with a higher income may be required to ensure that rent payments are made consistently.
Student Tenants: Landlords renting to students may require a guarantor due to their limited financial history and potential instability.
This list is not all-inclusive. As such, it is recommended to ask the leasing agent about the general qualification criteria for renters before you submit an application to know if you may need a guarantor.
Can Landlords Force Tenants To Use a Rent Guarantor?
Landlords have the right to set their own rental criteria and requirements, according to the New York Times, citing real estate lawyer Nancy L. Kourland. However, if a tenant is unable or unwilling to meet the landlord's requirements, such as providing a guarantor, the landlord may choose not to rent to that tenant.
