Co-signers and guarantors can be valuable tools for landlords when evaluating rental applicants who don’t fully meet your screening criteria. Whether an applicant has low income, limited credit history, or is a student without stable employment, requiring a co-signer or guarantor helps provide added security for your rental property. But not all landlords fully understand the legal and practical implications of using a co-signer or how to structure those agreements properly. Knowing how co-signers and guarantors work—and when to use them—can help landlords reduce risk while still filling vacancies with responsible tenants.
What Is a Co-Signer or Guarantor?
A co-signer or guarantor is a third party who agrees to be legally responsible for the lease if the tenant fails to meet their obligations. This means if the tenant misses rent payments, breaks the lease, or causes damage, the co-signer can be held financially accountable. While the terms are often used interchangeably, there are subtle differences between the two.
Co-signer
A co-signer typically signs the lease agreement alongside the tenant and is jointly liable for the full term of the lease. They have the same legal responsibilities as the tenant but usually do not reside at the property.
Guarantor
A guarantor often signs a separate agreement rather than the lease itself. Their responsibility is typically limited to covering rent or damages if the tenant defaults. A guarantor may have narrower liability depending on the language of the agreement.
Both roles provide additional assurance that the landlord will receive payment and compliance with lease terms.
When to Require a Co-Signer or Guarantor
Landlords may request a co-signer or guarantor when a prospective tenant is otherwise a good candidate but falls short in one or more areas of the screening criteria.
Common situations include:
- Low or no credit history
- Income below the required threshold
- Unverifiable income (e.g., freelancers or students)
- No rental history or recent relocation
- International applicants without a U.S. credit profile
Rather than denying the applicant outright, requiring a co signer gives landlords flexibility and provides tenants an opportunity to qualify with support.
What Makes a Strong Co-Signer or Guarantor
Just as you would screen a tenant, it’s important to screen co-signers and guarantors thoroughly. Their ability to step in if needed is only as strong as their financial qualifications.
A qualified co-signer should:
- Have a strong credit score (typically 700 or higher)
- Demonstrate stable, verifiable income
- Earn 4x to 5x the monthly rent to ensure affordability
- Have a clean financial history with no recent bankruptcies or collections
- Be willing to sign the necessary legal agreements and provide documentation
The co-signer should understand the full scope of their responsibility. Miscommunication or assumptions about the role can lead to complications down the line if the tenant defaults and the co-signer claims they weren’t aware of their obligations.
How to Draft a Co-Signer or Guarantor Agreement
To avoid legal confusion, landlords should use a written agreement that clearly outlines the co-signer or guarantor’s responsibilities. In California, it’s important to have this agreement reviewed or drafted with legal accuracy to ensure enforceability.
Key elements to include:
- Names of the tenant, landlord, and co-signer/guarantor
- The specific lease or rental agreement being guaranteed
- A clause stating that the co-signer is jointly and severally liable for rent and damages
- A clear outline of what the co-signer is and is not responsible for
- Duration of liability (e.g., entire lease term or until replaced)
- Signatures of all parties, including date of agreement
Make sure the agreement aligns with your lease terms and local laws. Never rely on verbal commitments or informal promises.
Risks and Limitations of Using Co-Signers
While co-signers provide extra financial security, they are not a guarantee against risk. Landlords still need to follow the proper steps if a tenant defaults, including serving notices, attempting collection, and possibly pursuing legal action.
Potential challenges include:
- Co-signers may be difficult to locate or unresponsive if the tenant defaults
- Legal action against co signers can be time-consuming and costly
- A co-signer might dispute the validity of the agreement if not properly documented
- Landlords must still comply with all fair housing laws and cannot require co signers only from certain applicants or groups
Co-signers are an added layer of protection but should never replace proper tenant screening or clear lease enforcement.
Best Practices for Landlords Using Co-Signers
To effectively and legally use co-signers and guarantors, landlords should treat them as an extension of the rental process and maintain consistent practices.
Recommended steps:
- Include a co-signer requirement in your written rental criteria
- Provide a separate co-signer application with consent for credit and background checks
- Use a professional co-signer agreement that complements your lease
- Keep copies of all agreements and correspondence for your records
- Ensure the co-signer receives copies of the lease and any updates
- Communicate clearly with all parties about expectations and responsibilities
If the tenant later wants to replace the co-signer (e.g., after establishing stronger credit or income), create a process for reviewing the request and documenting the change.
Alternatives to Using a Co-Signer
In some cases, landlords may prefer not to use a co-signer or may not receive one who qualifies. Alternatives include:
- Requiring a higher security deposit (if allowed by law)
- Offering a shorter lease term until the tenant proves reliability
- Requesting rent upfront (e.g., first and last month’s rent)
- Accepting a rent guarantee service or insurance product
- Rejecting the application if minimum standards are not met
Each option comes with pros and cons, and landlords must ensure any policy is applied fairly and complies with local rent control or deposit limit laws.
Understanding the role of co-signers and guarantors is essential for California landlords looking to reduce risk while offering flexibility in tenant selection. With proper agreements, consistent screening, and clear communication, co-signers can serve as a valuable backup and help expand your pool of qualified applicants.