Being a co-signer on an apartment lease is a big responsibility. Many tenants use a co-signer when renting an apartment because of unsatisfactory credit scores or limited income. A co-signer is an extra layer of protection for the landlord because in the event that a tenant fails to pay his rent or damages the property, the co-signer is also legally responsible for the costs. This is helpful to landlords because they will have another party from whom to collect if the renter defaults.
Risks of Co-signing
There are risks involved in being a co-signer, including the risk that the tenant will fail to pay rent or break the lease early and refuse to pay the lease termination fee. If the tenant refuses to pay, you could be on the hook for hundreds or thousands of dollars owed to the landlord. If you can't pay, the landlord could pursue you with a collection agency and ding your credit score for nonpayment. If you are a co-signer on a lease, you are legally responsible for any and all costs the tenant fails to pay.
Navigating a Lease Contract
A lease is a legally binding contract. As a co-signer to that lease, you are a legal party with obligations under the contract. Most leases run for a period of months, and at the end of the lease period the tenant is required to sign a new lease. You can contact the landlord to request that you are automatically released as a co-signer at the end of the lease term. If there is a relatively short period of time until the end of the lease term, many co-signers choose to wait until the lease concludes and then refuse to sign a new lease as a co-signer. If the tenant signs a new lease on the same apartment, you will no longer be a co-signer unless you also sign the new lease.
Communicating with the Tenant
A co-signer also may be able to work with a tenant to remove herself from the lease. This requires some goodwill on behalf of the tenant and the landlord and will likely only be possible if the tenant now has income or credit sufficient to qualify for the lease on his own. Once a co-signer alerts a tenant that she wishes to remove her name from the lease, the tenant can request that the landlord issue a replacement lease without a co-signer. The tenant will likely need to provide sufficient evidence to the landlord that he will continue to pay the rent in a timely manner and won't default without the help of a co-signer. If the landlord approves and issues a new lease signed between the tenant and the landlord only, you will no longer be a co-signer.
Items you will need
- Rental agreement
- 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.