Do I Need A Guarantor for a NYC Apartment?

I applied for an apartment, but the management agent says that I will need a guarantor. What is that and why do I need one?

Because of the costs associated with renting in one of the most expensive economies in the world, many renters find it difficult to be accepted on the basis of their own credit or finance. If you have had bad credit, work in an unstable job, or (in some cases) are in need of a roommate, renting in Manhattan in particular can be difficult. If you are unfortunate enough to be both unemployed and without resources, renting an apartment in Manhattan can be almost impossible. You will either have to wait to apply for a property until you have corrected your financial or employment situation or you will have to find someone who is ready and able to pay the lease on your behalf, if something goes wrong. Traditionally this is your Guarantor.

A Guarantor is basically a co-signer. It is a person who is in a financial position to be legally bound to pay your rent in the event that you are unable to do so. This person can be anyone, but is typically a relative. Because a Guarantor is expected to be able to pay their own bills and potentially to pay yours as well, they are held to a higher income standard then a single renter. Where you are expected to make between 35-40 times the monthly rent as your salary, a guarantor is typically expected to make between 80-100 times the rent. They will have to go through the same credit and income verification steps that you do and if they are self employed, retired or live on the proceeds of a trust or on investments, then bank statements and the previous year’s tax statements will probably be required of them as well. A Guarantor must sign the lease and is then legally bound to pay the lease if you are unable to do so.

Frequently, a parent acts as a guarantor. When the parent doesn’t live in New York City, and isn’t familiar with the unique rental climate, acting as a guarantor can seem very invasive. The guarantor will have to open their finances and credit to the same scrutiny that you would. This can be especially difficult for parents who are self employed or retired, as they have to provide information similar to a tax audit.

Finding a guarantor who meets the financial requirements can be difficult. However, there are ways to get around the financial formula. One way to get around the Guarantor situation is to make the potential guarantor the primary on the lease with you as an occupant. Basically, that means that the Guarantor is actually leasing the apartment, but is allowing you to live there. This will drop their financial requirements back down to the 35-40 times the rent range.

Guarantors are usually required in the following situations:

· If you are a student
· If you are self-employed
· If you have bad credit
· If your own income will not meet the financial requirements

You also may find that you need a guarantor if you need a roommate, if you have an unstable job, or if you are without a social security number.


Extract from The Nouveau Native’s No Fee New York available at all fine bookstores and online booksellers.

originally posted February 25, 2006