A surety is a person who pays certain financial debts for a lease, but who has not actually signed the lease and therefore has no rights to the premises. As a result, the owner generally wants the co-signer to be legally considered a guarantor. There are essentially two different types of guarantees, broad and narrow. The broad form of guarantee makes the co-signer/guarantor responsible for all financial matters, including rents and damages. The narrow form limits liability to rent. While it may offer a way to fill vacancies, especially in narrow markets or college towns, many homeowners feel that time, effort and additional costs are required to verify co-signers and coordinate the contract with the signatory, the practice of accepting co-signers is of low real value. In practice, a lessor can therefore legislate on its rental policy to refuse, with one exception, the consideration of co-signers. Some landlords include a simple additional clause in the rental agreement with a sign line for the deposit. In other cases, it may be a brief amendment or a secondary contract. The surety usually receives a full copy of the entire tenancy agreement, as he or she is responsible for its terms, just as you are the principal tenant. In New York, the owners call this person the “guarantor” of an apartment. Wherever you want to rent an apartment, ask for the rental language to be clarified with the owner if a guarantor or co-signer is mentioned. That way, everyone will be on the same side.
Technically, a surety is responsible for intervening and paying rent if it is not paid. However, a co-signer may be a person who, as another tenant, is added to the tenancy agreement and has the right to occupy a dwelling. Some companies, such as Insurent Lease Guaranty, will intervene and serve as leases or co-signers. They may have fewer income and employment requirements. As defined in the terms of the loan agreement, a surety may be limited or unlimited with respect to the schedules and the amount of financial participation. Example: a limited guarantee can only be called upon to guarantee a credit for a certain period of time, after which only the borrower assumes responsibility for the remaining payments and only the consequences of a default. A limited surety can only be liable for the assistance of a certain percentage of the loan called penalty amount. This differs from the unlimited guarantors who are responsible for the entire amount of the loan for the duration of the contract. This means that if your rent is 3,000 USD, the landlords want to prove that you earn at least 120,000 USD per year. An owner can also apply for a co-signer or guarantor in an apartment if you don`t have a credit history or bad credit. Some owners mix the two descriptions in the role of the “co-signer/guarantor.” Such clauses clearly define rights and responsibilities that are generally closer to the traditional definition of a guarantor and not a co-signer. For example, signing as a “co-signer/guarantor” does not allow secondary individual rights to occupy the dwelling.