Co-Signers


tenant co signersHow does a landlord deal with a potential tenant who has less than perfect credit? Perhaps the tenant is a college student, maybe the tenants’ income is a little shy, perhaps there has been financial problems in the past that the potential tenant is now moving past, such as a bankruptcy, but in all other regards, this is a desirable tenant.  Tenant Screening. As the landlord, you could of course just reject this tenants’ application or you could suggest that he/she produce a Co-Signers for the lease. That is a choice that you as the landlord may decide to go with or not. What is your comfort level in the matter of Co-signing? As a Co-signer takes on the responsibility of the contract, the same as the initial signer, the landlord must be very careful to do the same complete application process for the Co-signer as had been done for the tenant. A Co-signer is promising to pay the debt of another person in case of default, so all parties must enter this arrangement carefully and with much thought.

After meeting with both the tenant and the co-signer and discussing the terms and the details of co-signing, the landlord should have the co-signer fill out the standard application form, which states that the landlord has the right to run credit and background checks on this individual. A co-signer must be of legal age to sign and agree to this document.

CO-SIGNERS AND LEASE AGREEMENTS:

As the landlord, you have expectations. Tenants and co-signers have responsibilities. These items will be clearly stated in the lease. Read it carefully.
Who is the co-signer? Know who you are dealing with. It might be a parent or other family member, or a friend or employer. Remember, some one of legal age. The landlord must ascertain that the co-signer is financially able and is willing to honor the content of the lease. In the event that the tenant does not pay the rent as promised, the landlord will need at least two methods of which to contact the co-signer. The co-signer is now responsible for payment of the rent. In what manner will they submit the rent? Mail a check, Direct Deposit to the landlords rental account, credit card payment or will they bring cash to the landlord’s place of business? And when can the landlord expect the payment?

Prior to signing of the rental agreement, the parties have met and discussed the content of the lease. Everyone understands their responsibilities. It is best to meet in person, but in the case of long distances, it is perfectly OK to deal by phone or other telecommunication with the co-signer. Applications, leases and addendums can be faxed or emailed. In todays’ world, this really does not take a much longer period of time to complete. The landlord should make sure that the co-signers signature, as well as the tenants is on the lease. These should be notarized. As with all tenants’, the landlord must never allow a tenant to move into a rental, until all the financial and paperwork has been completed and returned. The landlord must have all required documents signed, notarized if necessary, and returned. All monies due must be paid up front. Is there a pro-ration for a partial month? It must be paid. The first months’ rent, and the   Security Deposit must be paid. To allow occupancy without the required documents is disastrous and sits a bad tone for the length of the lease. All parties should have signed copies of all documents for their own records.

TENANTS AND CO-SIGNERS:

There are many questions that tenants and co-signer would like to get the answers too. Now, before signing up, is the time to ask these questions and get the answers needed. Read the lease agreement.
How much are the rental payments and when are they due? How long does the lease last and when will the co-signer be “off the hook”? If the tenant extends the lease automatically, will the co-signer be extended as well? When and how soon, will a co-signer be notified if the tenant fails to make the appropriate payments? Will the co-signer be reported to the credit bureaus? Will an eviction proceeding involve the co-signer? Will the co-signer be responsible for damages to the rental?