Co-signing for leasing a rental property means that you agree to pay the rent should the tenant not do so. You will also be required to pay for any damage to the property, late fees, collection fees and broken lease fines. Landlords require a co-signer to back a tenant who has insufficient income, rental history or credit. Once you become a co-signer for a rental property, it can be challenging to change your status.
Items you will need
- Rental agreement
Read through the rental agreement. Contracts are legally binding, so you may have to wait for the lease to terminate before you can remove yourself as a co-signer. This is the easiest way to remove yourself. Once the lease terminates, simply refuse to be a co-signer for a renewed lease.
Speak with the tenant on whose behalf you co-signed. Explain that you no longer want to be the co-signer on the lease. The tenant can ask the landlord to create a new lease by verifying that he now has sufficient income or credit to not require a co-signer. This will require pay stubs or other income verification, credit reports, bank statements and anything else the landlord may require to determine income and assets. The landlord can run a new lease in the tenant's name only to determine whether he will now qualify on his own. If you live in the same area as the tenant, an in-person meeting with the landlord and tenant may be beneficial.
Ensure that your name will be removed from any lease renewals. Because the co-signer agreement is commonly a separate contract from the lease, many property management companies and landlords will not notify you at the termination of the lease if the tenant chooses to renew, since most commonly you are guaranteeing the tenant's rent for the duration of occupancy, not for specific dates.
- Co-signing a lease is no small matter, and backing out is not easy since contracts are legally binding agreements. Landlords and property managers do not typically emphasize the pitfalls of co-signing a rental property, so be aware that there are major consequences to acting as a co-signer. As a co-signer, you will be required to pay the tenant's rent, late fees, any damage caused by the tenant, and collection fees. The landlord can collect money from you before attempting to collect it from the tenant, and can also garnish your wages and damage your credit.
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