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Cosigner Agreement Template
What Is a Cosigner on a Rental Agreement?
A cosigner on a Rental Agreement is a third party who is responsible to pay rent if the tenant is unable. Sometimes, the lessee may not meet the conditions of the lease requirements for a particular reason (i.e., a limited credit history, history of late payments, or a low income level) so a Cosigner Agreement is needed as third-party financial insurance.
Normally, a cosigner is a family member, friend, or colleague with a strong credit history and stable financial position who earns enough to pay the monthly rent. If the lessee stops paying rent due to some circumstances, a cosigner becomes fully responsible for rent payments. That's why it's important to understand all of the potential liability issues that a cosigner could be exposed to.
A ready-made Cosigner Agreement template can be downloaded through the link below. Alternatively, you can make your own agreement with our online form builder.
How to Add a Cosigner to a Residential Lease Agreement?
A Residential Lease Agreement is a contract between a property owner and a tenant. In the case where a cosigner is required, the parties compose a Cosigner Lease Agreement. An agreement can be helpful in the following ways:
- It determines the legal obligations of each participant of the contract and is attached to your Lease Agreement or Rental Agreement to prove that the rent payments are secure;
- The guarantor agrees for the lessor to check their credit history;
- It establishes the guarantor's obligations to make rent payments, cleaning fees, or damage assessments under the terms of the lease if the lessee fails to fulfill their financial commitments;
- A Cosigner Agreement must also contain the lease term and signatures of each party of the contract.
How to End a Cosigner Agreement?
If a cosigner wants to stop the responsibility of being liable for a lease or rental, there may be some ways to exclude themselves from the contract:
- Fulfill the contract. One of the ways out of a lease may just be paying it off. After that, a cosigner is able to make a separate agreement and collect the debt directly from the lessee.
- Check the agreement. A Lease Agreement with a cosigner may include specific provisions on how to terminate the lease or rental. For example, a contract may contain a clause that the cosigner may terminate the lease if they pay the security deposit.
- Do not renew the agreement. Rental Agreements, Lease Agreements, and Sublease Agreements are generally short legal agreements that expire in a year. After the expiration of the initial lease term, a new contract is renewed for a new period of time. The guarantor may refuse to conclude any subsequent agreements.
- Get a new contract. If the original tenant specified in the agreement has enough resources to pay the rent and the owner of the property agrees, the original contract can be terminated and a new one can be drawn up without requiring a cosigner.
- Cosigner's protection. If a tenant does not fulfill their obligations, a cosigner can recover the balance amount in a contract and legal costs in court.
Related Forms and Templates:
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