Many residents will often ask us, “Why do I need a guarantor?” Luckily, the answer is rather simple. We’ll outline the basics of a rental guarantee—what the guarantor is, why they’re necessary, and who needs them.
First, what is a guarantor?
A guarantor provides security in a lease or other similar investment. They are obligated to help you pay for your rental property if you are unable to do so. The guarantor is not bound by the conditions of the lease, nor are they an occupant or tenant, but they do have a financial obligation to the management company.
That makes sense, but why do I need one?
Guarantors are just a way to insure that those who are most likely to fall behind on rent—first-time buyers or renters, young people, people with bad credit, or people without any substantive income of their own (usually the requirement is that you make three times the cost of rent, in order to pay for rent and other daily necessities)—will always have a safety net. Your guarantor will often be a parent, close friend, or other kind person who will help secure your stability as a tenant. If you do need a guarantor, your landlord will be sure to tell you!
What should I tell my guarantor?
Your guarantor is legally and financially obligated to pay for rent if you are incapable of doing so. Generally, a landlord or manager will require some sort of income identification—tax returns or pay stubs—in order to check their financial security. A background check or credit report might also be required, in order to give further validity to the guarantor’s status. They will assume responsibility for your lease, meaning that they will need to assist you if anything happens. You need to upgrade your guarantor on your financial stability, and make sure to stay in contact with them about your ability to pay.
What if I can’t find a guarantor?
The answer to this question depends on where you are, and who your landlord is. Generally, they will require a guarantor, meaning that you will have to find a place in section-8 or affordable housing. However, there can be other terms arranged—for instance, putting several months’ rent in escrow, paying months in advance, or live with a roommate (some places only require one guarantor per room).
What else do I need to know?
Guarantor requirements differ between states, cities, and even individual properties. If you have any questions, don’t hesitate to ask your property management office. This is important business, and will often determine your ability to rent in the first place, so it’s imperative that you understand the terms, requirements, and necessities of this role. Your guarantor is bound to the lease for its entire period, just as you are, so be sure to maintain steady and open communication between the two of you!
