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Tips For Co-Signers

Business Team Signing ContractIt’s not easy starting out in life. That’s why a little boost from the parents never hurts. But speaking of hurts, you may want to be careful about extending a helping hand, lest it get lopped off.

So that young fledgling that was seemingly a few years ago a squirming newborn is ready to leave the nest. Congratulations Mom and Dad! But before achieving lift off, a little help might be needed.

So junior is going to need a co-signer on that first apartment because their income is a little shy or there is no rental history. So being the good parent or guardian that you are, you’re going to step up and help out. After all, what could go wrong? This is your blood, your kin, your very own. They even look like you.

But if you’re wondering what could go wrong, let me introduce you to Murphy’s Law. Over the years, I’ve seen more horror stories than there is space here to repeat. But let’s start with this: A little help starting out is a commitment to the rental agreement so long as junior stays in the apartment. So imagine that everything looks good on day one. But on day two, or year two, junior has welcomed the new roommate who trashes the apartment, then disappears. Guess who’s going to pick up the tab?

That’s just the beginning. What if you’re stepping up to co-sign and there is already a roommate? One question would be where is the parent of the roommate? Are they going to co-sign too? If not, why not? We have plenty of young people apply where we ask for a co-signer. If a parent won’t co-sign, that’s a huge red flag.

Or imagine this scenario. Junior is combining with a new roommate at college and you’re going to co-sign. The roommate equation seems like a good idea. After all, you’re already springing for tuition and books, a little break on the rent you’re also paying for wouldn’t hurt. But a few weeks into the semester, it becomes evident that junior is living with the roommate from way down under. So you do the thing good parents do – you get junior out of there.

But now what about that apartment where you’ve cosigned? The Beast is still in residence. You don’t want you and your child named in an eviction proceeding, so you continue to pay your half of the rent. Then you get a notice from the landlord that the Beast has not paid his portion. What now? You still don’t want to become part of an eviction proceeding, so now you agree to pay the full rent and the Beast gets to live for free.

Sound far-fetched? I have seen it happen. The bottom line is this: you had better know and know well, anyone your child is going to be living with. That seems like a good idea even if you aren’t tied financially to a co-signer agreement. And it’s helpful as a back up to rent from a responsible company that carefully screens tenants, like Decker Properties. For more information about appropriate screening, see the blog post Careful Tenant Screening Creates Great Apartment Communities.

Also see “Why Do I Need a Co-signer?”