In Practice
A co-signer backs up a resident who may not meet your income or credit standards alone. Parents of students and first-time renters are common examples. The co-signer signs, and agrees to pay if the resident does not.
Co-signers are screened under your written criteria, and the paperwork needs to be clear on what they are responsible for and for how long. Some properties use a separate guaranty form and call the person a guarantor. Others add the person to the lease as a co-signer. Know which structure your documents use so you can enforce them.
Example: a student applicant has no income. A parent applies as co-signer, passes screening and signs. When the student misses rent, the lease file shows the parent's obligation.
The common mistake is loose wording. Does the co-signer owe only rent, or damage and fees too? Does it cover renewals? Say so in the document. Also apply the same co-signer rules to every applicant, and have counsel review your forms because the rules vary by state.
Treat the signed co-signer document like any other lease record: complete, dated and filed. When a balance gets large, you will be glad the paperwork is in order.
Not to Be Confused With
A co-signer or guarantor backs up the payment and usually does not live in the unit. A co-applicant applies to live there and is on the lease.
Co-Signer: Common Questions
What is a co-signer on a lease?
A person who signs along with the resident and agrees to be responsible if the resident does not pay.
Does a co-signer live in the unit?
Usually not. A co-applicant lives in the unit, while a co-signer backs up the payment.
Co-signer vs guarantor: are they the same?
They are used for the same purpose and are often treated alike, but documents may define them differently. Check your forms.
