Risks of allowing a cosigner or lessor not in residence?

[Johann Jells]

I have a potential applicant who wants to rent the unit for his retired parents who do not have sufficient income to qualify. He would co-sign or take the lease himself, and let them live there. I don't recall ever allowing a co-signer, it always seemed just a licence to sue a 3rd party if things went bad, so I don't have actual experience with this. Any thoughts on what my liabilities are in the situation above a normal tenancy? I'm thinking it won't happen as it's a 3rd floor walkup, but I'd like to have a well thought out answer.