Why a co Signor may be Needed to Rent an Apartment

There are times when a potential tenant’s promises are just not enough to convince a future property manager the tenant can handle the responsibility of living in his rental property.  Whether it be the tenant’s references or past history, something on the rental application may make the property manager a little nervous about selecting a tenant.

In these cases, a property manager may require a second person to co-sign for the tenant.  Usually the co-signor has an established credit and work history.  Having a co-signor’s signature on the lease reduces the manager’s risk and allows him to hold someone else responsible in the event there are damages.

The three most likely reasons why a landlord may require a co-signor for a lease agreement include:

1.    The potential tenant has little or no rental or credit history.

Young people just starting out and moving out of mom and dad’s house may not have a rental history.  There may be very few references for the manager to call, and there is no track record of what kind of tenant the applicant may be in the future.

Young applicants also may not have an established credit history.  It’s possible a person moving out on his own has never had a credit card or an installment loan.  

Without a rental or credit history, a property manager may require a co-signor to sign for the applicant when filling out a lease agreement.  If the tenant should default on the lease or damage the property, the landlord is able to seek funds from the co-signor for payment restitution.  Also, a manager may feel more comfortable renting the apartment to the tenant, if he knows a co-signor knows the applicant and feels the applicant is a good enough candidate that he will personally vouch for that person.

2.    The tenant had past landlord or rental problems.

Property managers do in fact call references on applications, and they do call past managers.  If the manager learns the potential tenant had problems  paying rent on time or maintaining the property, he may be unwilling to accept the tenant for one of his units.  

If the potential tenant  had severe problems – such as a property manager seeking a court judgment due to non-payment – finding a new place to rent may become almost impossible.

In these cases, a co-signor will almost always be required for the property manager to accept the tenant.

3.    The applicant has a poor credit history.

Even if the applicant has an established rental history, moving to a new place may be difficult if he has a poor credit history.  Property managers will almost always look at an applicant’s credit report upon receipt of an application.  A manager may not expect to see perfect credit, however, he may be unwilling to rent to an applicant who is not current on bills and is behind on debts.

Co-signing for a lease is a big responsibility and should be done with caution.  In all cases, the co-signor should only sign the lease agreement if he is willing to be responsible for what damages may be done.  If the tenant does not pay the monthly rent or damages the property, the co-signor could (and likely will be) held liable.

Alternatively, sometimes a young person just needs a start in life and needs someone that can account for his level of responsibility.  He may just need someone to give him the chance to prove himself.  If the co-signor is willing, his signature can help a friend or relative get on his feet.