Cosigner Question

[Account Closed]

Hello everyone.  Question regarding a cosigner.  Do landlords run the background check against the cosigner instead of the actual people who are living there?  Will the cosigner be signing the lease or will I need to give him a Cosigner form as an addendum?  Thanks in advance.  Didn't see this one coming so curious as to the best practices on this.  I have a condo in Philadelphia which I'm going to lease.

[Tom Ott]

Originally posted by @Account Closed:

Hello everyone.  Question regarding a cosigner.  Do landlords run the background check against the cosigner instead of the actual people who are living there?  Will the cosigner be signing the lease or will I need to give him a Cosigner form as an addendum?  Thanks in advance.  Didn't see this one coming so curious as to the best practices on this.  I have a condo in Philadelphia which I'm going to lease.

Hello Alexander!

Great question! This is something I see a lot with my company. 

To answer your first questions I would say, YES, always run a background check on a cosigner! You want to make sure they too fit your criteria for leasing. They must meet the same requirements you have for your tenants. If you have any doubt in your mind be sure to check. Also, yes you should run a background check on the tenant as well. Both of them are equally important and you want to make sure they have clean backgrounds.

To answer your second questions, yes, the cosigner must sign the lease. Treat the cosigner as if they were a tenant. Explain to them all of the rules and polices within your lease. They need to be just as aware of everything as your tenant is. They are also responsible for the unit so they need to follow all of the rules as well.

Some things I like to consider when doing a background check are:

Have them sign an authorization form, which allows you to look up their credit report and do a background check. Never simply look at a credit SCORE, but make sure you look at the whole REPORT. Someone could have a good score, but owe a lot of money on collections. (I know, but it happens)

Analyze their credit report and if you feel comfortable, do a background check and make sure their criminal history checks out.

Another key factor is employment history. Make sure they have a job of course! You also want to make sure they have had the job for more than a few days. Remember their ability to keep their job (or have a steady income) will directly effect their ability to pay the rent.

We always have them submit pay-stubs. 2 - 3 most recently ones give us the information we need. You want to use that information to check to make sure they have enough money to pay their bills, including the rent. We don't normally ask for a license until they are signing documents, but that might be different depending on your state.

Please let me know if you have any questions!