If a friend or loved one needs to rent a new apartment but can't pass the credit or background check on their own, they may ask you to co-sign the new lease to help them out. But there are some things you should consider before you do so. The apartment complex may hold you responsible for the lease if your friend or loved one fails to pay their rent or keep up the property. Here are things you should be aware of if you co-sign the lease.
If you help your friend or loved one rent a new apartment and they leave the lease early, it could affect your credit. If you don't take over the lease or pay on it, an apartment complex can place the unpaid balance on your credit reports. To avoid this issue, sit down with your loved one or friend and discuss how they plan to pay for the apartment.
In most states, renters must make two or three times as much as the rent before they qualify for an apartment. Apartment complexes set these types of guidelines to make sure consumers can make their payments on time. For your protection, it's a good idea that you ask your friend or loved one about their income so that you can help them find an apartment they can reasonably afford.
If the person is unwilling to share this information, you may want to avoid co-signing the lease. Although your loved one or friend's income is private, it can become a problem for you if they can't pay the rent once you sign the lease. But if the person understands the risk you face if they break the lease, they may be more willing to share their income information with you.
Renting an apartment is a legally binding agreement. As a co-signer, you become legally bound to the lease, even if your loved one or friend pays their rent on time. But if the person stops paying for the new apartment, the complex can take you to court in order to obtain the past due rent, court fees and other expenses associated with the lease.
If the person does break their lease, you can continue the payments until the lease ends. You may also have the option of settling the past due rent without going to court. Sometimes, apartment complexes will accept several months of pay from a broken lease instead of the full amount owed. It's a good idea that you ask the apartment complex about this option before you co-sign the lease.
If you still want to help out your friend or loved one, consult with a real estate agency, such as Sterling Realty, for a list of available apartments in your area. The list may contain apartments that fit your friend or loved one's income.