What is an Apartment Cosignor Guarantee?
Property management companies and landlords invariably establish certain criteria for a prospective tenant. The landlord will typically examine an applicant’s income and examine his credit history to reassure himself that the person is able to meet the rent. The credit history will also provide an insight into how well the applicant manages his finances. Additionally the landlord might order a total background check to obtain a grasp of the person’s personal history and to know whether there is anything in it which sends out warning signals. These precautions are taken by a landlord or property manager to avoid having to face an ugly situation where a person might not pay the rent, damage the apartment, or perform illegal activities in it.
An apartment cosignor is a person or entity who stands guarantor for a rental or lease agreement. Sometimes a landlord or property manager might insist on an apartment cosignor for a particular tenant who plans to lease or rent an apartment and whose credit history might not be quite up to scratch. It could be something in the prospective tenant’s financial background which does not quite meet the required standards for renting or leasing the apartment.
The cosignor assumes the liability to meet a rental obligation which may be outstanding and stands guarantee for any damages which may occur over and above the security deposit. Such contingencies arise when the tenant of an apartment defaults and causes damage to the premises. A cosignor guarantee can be sued by a property management company or a landlord for any money owed as if that person was the primary resident. The cosignor’s credit could also be impacted in certain jurisdictions if the primary renter fails to meet his/her financial obligations.
Sometimes a tenant’s income or background might not meet the criteria the landlord has set, or the tenant’s income might not be adequate or he might have a poor credit history or no credit history at all. In such cases the landlord may consider renting or leasing the apartment provided the tenant is able to bring an apartment cosignor who is financially stable. The landlord will apply the same tests to the cosignor. If the cosginor qualifies, he/she will have to sign off on the agreement and agree to meet all obligations should the tenant default.
Worst Case Scenario
A person assumes several risks when cosigning on an apartment lease or rental. The most noticeable is if the primary tenant defaults on his rental obligations or damages the apartment and refuses or is unable to pay for such damages. The problem arises when the cosignor is not informed until a suit is filed against the tenant where the cosignor is cited. Apart from being involved in a lawsuit where the cosignor is not the primary defendant, the judgment and lawsuit can also reflect on the credit report and damage the credit rating of the cosignor.