Landlords like to know what they are getting. Tenants-to-be who do not have good credit cause doubt. Find out what co-signers can do to help.
What you will find out:
When should a landlord ask for a co-signer?
Can landlords put limits on who can co-sign a lease?
Does a credit check need to be done on co-signers?
Can an owner sue a co-signer for back rent without evicting a tenant?
Can a co-signer break a lease, or end it?
Does the co-signer have any rights to the house or apartment?
College students and younger renters with no credit history often need co-signers. It is important for renters to have good credit. People who rent are more likely to pay rent on time if they have good credit. But if a person who wants to rent does not have credit or has bad credit, a co-signer can step in and use their credit to help the person who wants to rent. Here are some answers to questions that landlords often ask about co-signers that have to do with the law.
When should a landlord ask for a co-signer?
A co-signer is someone else who is financially responsible for the lease if the tenant can not pay rent or fixes things they break. A parent of a college student who needs an apartment but may not make enough money to meet the income requirements is a common example of a co-signer.
When an applicant can not meet the landlord’s income or credit standards on their own, they may need a co-signer. Instead of a co-signer, you could pay a bigger security fee or rent for a few months in advance. But some state or local rules limit the amount of protection fees or payments ahead of time. In the end, many landlords might think that having a co-signer protects them more from a renter who does not pay.
Can landlords put limits on who can co-sign a lease?
Most of the time, landlords have the right to decide whether or not to allow co-signers. Most of the time, landlords can also choose whether they want to accept co-signers from individuals or from business co-signer services. Trying to limit a co-signer based on their link to the renter, like requiring the co-signer to be a parent, could be against fair housing or other anti-discrimination rules.
It is normal for landlords to want the co-signer to meet or even go above and beyond their standards for screening tenants. For example, since a co-signer is also responsible for their own living bills, they may need to make twice as much as the standard minimum.
Does a credit check need to be done on co-signers?
Landlords may want to check a co-signer’s credit for the same reason they would check a tenant’s credit. A credit check can show if a potential renter and their co-signer pay their bills on time or if they have a lot of debt. Even if someone has a lot of money, they might not be good with it or they might have problems that make it harder for them to pay their rent or other bills.
Landlords can ask the co-signer to fill out a Rental Application, which lets the landlord check the co-signer’s income, credit, and past. If the cosigner lives far away, they can use RocketSign® to sign online. If the request is accepted, the co-signer would sign a Co-Signer Agreement instead of being listed as a renter on the lease.
Can an owner sue a co-signer for back rent without evicting a tenant?
Most co-signing deals say that the rent is the responsibility of both the tenant and the co-signer. This means that the owner can sue either person for the full amount of unpaid rent. If the owner sues the co-signer, the co-signer could, based on their deal, sue the renter for money.
Usually, if the renter has not already moved out, the owner would start eviction procedures against the tenant and also name the co-signer in that case. But the owner could also tell the co-signer that a payment was late or missed and ask the co-signer to pay. If necessary, the owner may tell the co-signer that the renter may be kicked out, and the co-signer may be responsible for all costs and back rent according to the lease.
Can a co-signer break a lease, or end it?
Unless the lease or co-signing deal says otherwise, the co-signer is legally tied to the lease for as long as it lasts, just like the owner and renter. If the renter and co-signer ask, the landlord may agree to release the co-signer if there is a new co-signer or if the tenant now meets the landlord’s financial standards without a co-signer.
Most of the time, the co-signer has the right to be taken off the loan if it is renewed. When the lease is up for renewal, the landlord might want to check local rules and the text of the lease to see if the co-signer needs to be given any warning.
If the co-signer wants to get out of the lease because the tenant is having money problems and can not pay the rent, it is the same as if the renter wanted to get out of the lease early. Landlords might want to talk to the renter and co-signer about a way to end the lease that gives them the right to charge any costs allowed by the lease and local law.
Does the co-signer have any rights to the house or apartment?
Co-signers are not renters. Most of the time, they can not use the rental place unless the tenant asks them to. As a renter, they also do not have a lot of legal rights. But owners may want to make sure that the co-signer is not living in the unit without permission, or the co-signer may end up with renter rights.
