How to Handle Lease Cosigners and Guarantors
April 23, 2023A cosigner or guarantor adds a second layer of financial protection when an applicant doesn't independently meet your income or credit standards — commonly for first-time renters, students, or applicants with limited credit history.
Cosigner vs. guarantor: know the difference
A cosigner typically has the same rights and obligations as the tenant, including a right to occupy the unit. A guarantor guarantees the tenant's financial obligations without any right to live there. Most landlords use a guarantor arrangement for applicants who need financial backup but aren't planning to live in the unit themselves.
Screen the cosigner or guarantor just as thoroughly
Run the same credit, income, and background screening on a cosigner or guarantor as you would on the primary applicant — the whole point of requiring one is added financial protection, which only works if that person actually qualifies.
Set a clear income standard for guarantors
A common practice is requiring a guarantor's income to be significantly higher than what you'd require of a tenant alone — since one person's income is now covering a rent obligation for someone else's household — commonly 4-5x rent rather than the standard 3x.
Put the guarantee in a separate signed document
Use a dedicated guarantor agreement (not just a signature line on the main lease) that clearly states the guarantor is responsible for the tenant's financial obligations under the lease, including rent and damages, for the full lease term.
Know that enforcement against a guarantor can be harder
Pursuing a guarantor for unpaid rent typically requires separate legal action from any eviction proceeding against the tenant, since the guarantor isn't the one occupying the unit — factor this into your expectations if you ever need to actually collect.
Frequently Asked Questions
When should I require a cosigner or guarantor?
Common triggers include an applicant with insufficient income relative to rent, limited or no credit history, or being a first-time renter — anytime an otherwise interested applicant doesn't independently meet your standard screening criteria.
What income should I require from a guarantor?
Many landlords require a guarantor's income to be notably higher than the standard tenant threshold — often 4-5x monthly rent rather than the typical 3x — since their income needs to comfortably cover an obligation that isn't their own housing cost.
Does a guarantor need to be screened the same as a tenant?
Yes — run the same credit, income, and background checks on a guarantor as you would any applicant, since their financial reliability is exactly what you're relying on if the tenant doesn't pay.
Can a guarantor be removed from the lease later?
Generally only with your agreement, often once the tenant has independently demonstrated reliable payment history over some period — this should be handled as a formal lease amendment, not an informal understanding.
What happens if the tenant doesn't pay and there's a guarantor?
You can generally pursue the guarantor for the unpaid amount per the guarantor agreement, though this typically requires separate action from any eviction process against the tenant, since the guarantor doesn't occupy the unit.