Friend has asked my to be Guarantor on their Lease... Now what?
March 28, 2021 3:22 PM   Subscribe

I have a friend in their late 20s who is very responsible, reliable, kind hearted, and employed. They have asked me to be the guarantor on their lease in NYC and I am... kinda freaked out about it?

we've known each other for a bit less than a year through mutual aid circles. I really like them, I know they are pretty secure in their job, but i know this is a big ask and I would love some help understanding the um, implications of it.

Is it just for the one year lease term or am i on the hook for the next year if they re-sign?

I am in NYC, the landlord is asking for a 680 credit score and and income of 72x the rent which would be $122K.

I want to say yes but also I am... nervous about that. I don't know them THAT well
posted by wowenthusiast to Law & Government (41 answers total) 1 user marked this as a favorite
For me personally I'd nope out. I'd only possibly be a guarantor for someone I've known for a long time, and even with that, someone who I can trust very well. Not knowing someone for more than a year is definitely, for me anyway, an instant, flat-out no.

I believe there are companies that will act as guarantors - this is a good place to start. You could refer them to this website as a way to get a guarantor. This is better, as they're independent — no ties, no friendship/family connections, just someone neutral who will act as their guarantor. Yes, their fees might be high, but it'd be better than having a friend as a guarantor, especially a new friendship that can easily go wrong for a number of reasons.

My two cents, but it's up to you; follow your instincts.
posted by dubious_dude at 3:28 PM on March 28, 2021 [38 favorites]

I don't know the particulars of how a guarantorship like that would work (I'm not in NYC, for one thing), but I do know that mixing friendship and large-dollar financial activity rarely ends well. The fact that your question ends with "I don't know them that well" should give you your answer pretty quickly.

Put it another way: using the numbers you gave, the annual cash equivalent of what you're being asked to do is $20,333. Would you be willing to loan this person $20,333 in cash once a year (for potentially more times than just the one year)? If not, maybe don't guarantee their lease.
posted by pdb at 3:30 PM on March 28, 2021 [27 favorites]

It would be different if it was an old and trusted friend. For someone like this, it's a rather obvious "hell no" - not just because you've only known them a few months (!!) but also because it's a major red flag from them that they would even ask you. (It's presumptuous and/or bad judgement to ask you to take on such a serious risk despite your short acquaintance, it's suspicious that they don't have other longer-term or closer friends/family willing to help them, etc.)
posted by MiraK at 3:30 PM on March 28, 2021 [32 favorites]

I would only lend money that I can afford to lose, and I would not be a guarantor.
posted by saturdaymornings at 3:31 PM on March 28, 2021 [7 favorites]

I'm not familiar with New York law specifically, but in my experience unless the guaranty explicitly says so, when your friend renews, the guaranty renews as well. For as long as the relationship between this person and their landlord exists, you will be on the hook.

Peoples circumstances are different, so maybe there's a good reason why you are being asked to do this, but unless you are able to comfortably cover this debt for your new friend, I would not even consider this. Your downside is huge, and they should have someone better suited than you.

posted by China Grover at 3:34 PM on March 28, 2021 [3 favorites]

Gawd no. Why would you take this type of financial risk for someone you've only known a year? Maybe they're a really good scam artist for all you know. There's nothing in it for you at all, and tons to lose. Perfect time for "I'm sorry, but that wont be possible."
posted by cgg at 3:34 PM on March 28, 2021 [9 favorites]

I am a guarantor on a friend’s lease, so I absolutely do think this is a good thing to do in some circumstances. However, I did it for a friend who I consider to be chosen family, and for whom I could and would gladly just give them their rent as a gift if they would take it. I don’t care if they stop being able to pay their rent; I can afford to pay it indefinitely and want their happiness and comfort more than I want that money.

If those things are not all true for you, then I would not do this.
posted by Stacey at 3:35 PM on March 28, 2021 [43 favorites]

The specifics are irrelevant. Follow your gut.
posted by nkknkk at 3:39 PM on March 28, 2021

Nope. You won't be able to take it back. Don't do it.
posted by Glinn at 3:41 PM on March 28, 2021

I would only do this if either
a) If push came to shove and they don't pay their rent, I could afford to pay the rent for the term of their lease while still paying my own bills or
b) the person has a year's worth of rent in savings and it could be put in escrow or something, to be released to you if you end up needing to pay their rent.
posted by needs more cowbell at 3:50 PM on March 28, 2021 [1 favorite]

No way, no day. You haven’t even known this person a year. What does it say about them that they’re prepared to ask someone they hardly know to do this and that there’s no one they’ve known longer that they can ask (eg family member) or worse still, the people who have known them forever won’t do it for them?! The fact that you’re their best option should give you serious concern about either their trustworthiness, their ability to to pay it off or both.
posted by Jubey at 3:51 PM on March 28, 2021 [19 favorites]

Nope. I would only do this for a friend or family member I knew very well, and I had fairly intimate knowledge of their personal finances. Plenty of good people have bad credit scores, but it feels a little fishy that they are asking you of all people, someone they've known less than a year.

On Preview, what Jubey said above.
posted by coffeecat at 3:54 PM on March 28, 2021 [3 favorites]

As an addendum, some framing: lately I have seen people in leftist spaces talk about cosigning leases [which I'm gathering is similar] as a sort of way to lend their privilege, if it's within their ability and the risk feels low. Not everyone has parents or extended family who have the credit score or income to cosign a lease.

Cosigning a lease would feel scary and not an option to me personally, because I have never made much money, but I think for people who have an extremely different level of disposable income than I do [let's say: someone for whom the friend defaulting would mean, maybe they'll have to skip next year's luxury vacation] it's an interesting thing to consider doing.
posted by needs more cowbell at 4:10 PM on March 28, 2021 [8 favorites]

Regardless of your decision, I think it’s unfair to judge this person for asking you to be a guarantor. Not everyone has a good relationship with their family members and not everyone has good/old friends who are at the income level that would qualify them as a guarantor. You know your friend and can judge their intentions better than internet strangers. It’s perfectly fine (and honestly probably wise) to decide you’re unwilling to take this financial risk, but please don’t think less of your friend for asking.
posted by rabbitbookworm at 4:18 PM on March 28, 2021 [27 favorites]

Hell no.

This particular internet stranger can’t imagine asking anyone they had known for a year to assume this sort of open ended responsibility. Even if you could be comfortable with it now, what if your circumstances change? What about property damage? What about insurance for something more catastrophic - eg. they're the cause of a fire or water damage to other units?
posted by bonobothegreat at 4:28 PM on March 28, 2021 [1 favorite]

I would be more inclined to tell them you cannot guarantee the lease, but if they are coming up short one month to call you and hopefully you will be able to help out at that time. It shows you are willing to help (to a lesser extent than asked, but help nonetheless).

What is the worst case and best case in this situation. Worst case is they default immediately and won't move out so you are paying their rent for a year. Best case is they never need you. Best case is what should happen in any case. You have no upside and all downside. Just determine what you think the probability of your guarantee coming into play is and what you can afford. Can you pay $20,500 or any portion thereof, happily or better put willingly?

Fwiw, I do think you could sign for just the term of the first lease. Tell the landlord the guarantee is good for just the term of this lease and if they were to sign again, you will decide at that time if you want or need to guarantee it again. Personally, if this person pays on time for the term of the lease, the need for a guarantee by the landlord on the next lease is overkill to me.
posted by AugustWest at 4:29 PM on March 28, 2021 [6 favorites]

I have talked people through this in non-NYC locations. I do not know your specifics and I definitely agree with what needs more cowbell said above, this is a solid way to lend privilege.

However it's also quite risky for someone you do not know well. In the situation I was familiar with the lease renewing meant that the guaranty renewed. It also may be worth thinking about this particular situation. Is asking for an income equivalent to six years of rent really reasonable in this rental market in NYC? It might be but I have also seen a lot of other AskMes about people negotiating their rent downwards and it's seemed like a renters market. The worst case in this situation is that something happens to your friend, they both do not pay and do not leave and you are somehow on the hook for months of rent while eviction proceedings take place. I know it's unlikely. I know it's an uncharitable thing to think, but while you are assessing what your risks are it may be worth putting a dollar amount on.

I am a big mutual aid/anarchist fan generally. My concern would be that if your friend winds up in conflict with their landlord, they might not feel bad about screwing over the landlord (I know I wouldn't be) but that might inadvertently screw you over too.
posted by jessamyn at 4:38 PM on March 28, 2021 [10 favorites]

Is asking for an income equivalent to six years of rent really reasonable in this rental market in NYC?

Annual income 40x the monthly rent is normal in NYC. Based on the numbers it sounds like this might be one person trying to rent a 2br by themselves (and then hopefully rent that room out, because otherwise how can they possibly afford this?)
posted by showbiz_liz at 4:47 PM on March 28, 2021

Only if you can afford to take over their lease.
posted by chesty_a_arthur at 5:00 PM on March 28, 2021 [3 favorites]

In my experience in NY they generally ask for the guarantor to earn 70-80 times the rent, and the tenant to earn 40 times.
posted by SpaceWarp13 at 5:08 PM on March 28, 2021 [2 favorites]

For me the issue would be that even if he is a friend who is very responsible, reliable and kind hearted, there are a world of things beyond his control that could mess this up. The other side of it for me would be to wonder, do we only help people when it costs us nothing?
posted by InkaLomax at 5:20 PM on March 28, 2021 [1 favorite]

Not everyone has long-term friends or close family who are able or willing to be their guarantor, but everyone who has a modicum of responsibility knows not to ask someone they've known for less than a year to be their guarantor. Yes, it sucks when you're estranged from your family and your friends are poor. That's also no excuse to ask casual acquaintances to take on vast amounts of financial risk for your benefit. OP, you have every reason to judge your friend for making this request. Please be wary.
posted by MiraK at 5:24 PM on March 28, 2021 [18 favorites]

Back in college, I was a guarantor for two fellow students whom I'd known for just a few months when they needed a loan from the school to buy desktop computers for their dorm rooms. The computer loans were for $1000 each, and at the time I had not yet been kicked out of home by my parents, so from my job I would have been able to cover the loan myself in a worst case scenario. It would have stung but it wouldn't have been devastating. In addition, I knew these students were asking me only because I had a permanent resident permit in the country we were in, and they, being fresh off the boat, did not know anyone else who did (having a PR was a requirement for guarantorship).

Your friend, OP, is asking you to take on a devastating $20,000 of risk and it doesn't sound like they have any extenuating circumstances like immigration status to lead them to ask you for this type of help.
posted by MiraK at 5:38 PM on March 28, 2021 [4 favorites]

Please don’t do this.
posted by uncannyslacks at 5:38 PM on March 28, 2021 [3 favorites]

> Is it just for the one year lease term or am i on the hook for the next year if they re-sign?

The person asking you this should know the answer, and should have sent you the information. (Me, there's no way I'd do this.)
posted by The corpse in the library at 5:41 PM on March 28, 2021 [1 favorite]

For a blood relative, maybe. For just a friend? I personally won't.

My sister co-signed my "student loan", pretty close. But she's my sister. And I can make payments on the loan for at least 6 months (it'd be a bit longer term than that). If it's just a friend, I'd personally say "sorry, can't".
posted by kschang at 6:05 PM on March 28, 2021

Oh HELL NO, especially not someone you haven't known and trusted for ages. I have bad vibes from this. They don't want a guarantor unless they're fairly sure the person is going to flake/bail/otherwise fail, right?
posted by jenfullmoon at 6:35 PM on March 28, 2021

On the other hand. When I moved to the US, I couldn't find a place to stay because I had no credit history in the US. Someone I only tangentially knew heard about my predicament and offered to co-sign for me. Without her doing that, I don't know what I would have done to find a place to rent. I am forever grateful for her kindness, which was offered out of the blue and came with zero strings attached.
posted by EllaEm at 6:47 PM on March 28, 2021 [9 favorites]

I would put this in the same category as "should I loan money to this person?" -- you do it if you are able to comfortably consider it a gift. If you can't, and if not being paid back would be a big problem financially (or emotionally) for you, then you shouldn't.
posted by Dip Flash at 7:22 PM on March 28, 2021 [3 favorites]

Can you easily afford to pay that rent for the lease period? Even reliable people have catastrophes, and landlords who ask for guarantors are in the Giving No Fucks profession. Alternative - front a month of security deposit.

My brother is a really good guy who co-signed not one, but 2 car loans for married friends. They didn't default, so that can happen, but it's a huge risk.
posted by theora55 at 7:24 PM on March 28, 2021 [2 favorites]

My personal rule is any financial help I give to friends or family (even if we're calling it a "loan"), I mentally treat as a gift. If I get paid back, great. If not, no worries. I do not offer financial help to friends or family that I have not mentally identified as a gift. Anything else is a recipe for resentment and I'm not willing to sacrifice my relationships over money troubles.

I gave friends a loan for their small business startup. In my mind, it was a gift -- if I got it back with interest, it would be a fun bonus, but I couldn't go into the transaction with that expectation without jeopardizing our friendship. I ended up getting this money back with a bit of interest, actually, which was fun! But I would have just been happy to help them with their business experiment if I hadn't.

Similarly, when my friend needed help with a significant amount of money to be able to afford lifesaving medical care, I just gave it as a gift. (With certain friends, it's possible a "forgivable loan" might be preferred to avoid stressing the recipient out, but in this case I thought a gift was less stressful -- I didn't want her worrying about paying it back.) We've known each other since we were kids and she's historically resistant to financial assistance, but I just explained to her that it was like she was my spouse -- you'd make sure your spouse got medical care, right?

But in your case... it seems like an awful lot of money, with someone you don't know that well. Unless you'd be happy to pay their entire lease and any damage expenses in the situation that they break the lease, I would not do this.
posted by cnidaria at 8:13 PM on March 28, 2021 [5 favorites]

Oh good Lord no. If the person in question is trustworthy and has good intentions, it's no protection AT ALL, and you don't know them well enough to know even that much. And you don't particularly even WANT to do it. If you were dying to do it to help out your best friend in the world, it'd STILL be a terrible idea, but there'd be at least some justification for it. Here there is none. The fact that you were asked doesn't make it a reasonable request. Just say no.

>California requires that the following warning accompany any such contract in which a co-signer is involved:

>..."The creditor can collect this debt from you without first trying to collect from the borrower. The creditor can use the same collection methods against you that can be used against the borrower, such as suing you, garnishing your wages, etc. If this debt is ever in default, that fact may become a part of your credit record."
posted by Sing Or Swim at 8:19 PM on March 28, 2021 [5 favorites]

Uh... I'd say no. But then, I learned early, the hard way, these rules:
- Do not lend money unless you're willing to just give it.
- Do not lend money you will need returned.
- Do not lend money unless you're willing to let the loss of that money destroy the relationship.
- Do not co-sign ANYTHING unless you can afford the extra expense without it affecting your lifestyle or needs in any way whatsoever.

The ONLY exception I've made to these rules in years was when I saw a need, the person never asked, never hinted, and it was clear for months that they were doing their damnedest to solve the problem themselves... and when I offered, they tried to turn it down. I made it clear that it was an open offer with no strings, because it was obvious to me that solving the problem would improve their ability to repair the problem much more quickly. It was someone I've literally known 40 years, and they're one of less than five people I actually TRUST with very little reservation. I STILL did not do it and count on having the money back, or back in any specific time. I did get it back - six months later than the original estimate - and there were no bad feelings, because I was totally clear that I was fine with whenever, my goal was to see the problem solved and the person back on better footing.

Would I co-sign for him on someplace I wasn't living, or on a vehicle? Still no. But I would SHARE a loan or lease with him, with no concerns.
posted by stormyteal at 9:48 PM on March 28, 2021 [2 favorites]

Um, these folks saying you could potentially be on the hook for around 20k are wrong. It can be substantially more than this if this person refuses to leave the apartment at the end of the lease or just decides to stop paying rent for any reason and not leave the apartment. There is no magical force that makes anyone leave at the end of the lease, except for eventually after months and months of court proceedings the marshall showing up at the door.

I've lived in NYC over 30 years and have heard countless stories of people being able to stay in apartments for years while the court cases dragged on. From my own personal experience and from talking to others, I think that it's very rare for a landlord to not attempt to get owed back rent.

There is also the possibility that the apartment gets damaged beyond the scope of the deposit, and the landlord comes looking to cover the additional expenses.

There is maybe one person alive right now that I know that I would do this for. Someone I've known less than a year is not even a consideration. I wouldn't necessarily think that they're crazy for asking if they're new to the city or just inexperienced in NYC landlord tenant things in general.

No one can predict the future. If this were a little over a year ago, and you co-signed, and this person lost their job due to Covid and stayed in the apartment without paying for the full time evictions were put on pause, would they have the lump sum that would be needed when the landlord was able to eventually sue the both of you for back rent?
Covid gave us all a good lesson in the unpredictablity of life. Proceed with caution.
posted by newpotato at 2:05 AM on March 29, 2021 [6 favorites]

I co-signed for a friend's first mortgage when we were both in our 20's. They did always pay but with hindsight I must have been out of my mind as I would potentially have been on the hook for a huge amount of money at a time when my own job was insecure and I was living at home with parents. And this got this was someone who if they had got the mortgage some other way I would have given a few thousand pounds/ dollars if they ran into trouble, not some recent acquaintance. I would definitely not do this in your position and if it costs you the friendship so be it.
posted by AuroraSky at 2:27 AM on March 29, 2021

If you've watched as many episodes of Judge Judy as I have you'd know this isn't a good idea, unless you're able to afford their rent as well as your own and are willing to assume responsibility for the debt to avoid your own credit being ruined.
posted by essexjan at 4:04 AM on March 29, 2021 [1 favorite]

Nope, nope, nope, nope, nope.
posted by Thorzdad at 5:12 AM on March 29, 2021 [2 favorites]

It's possible to say no to a request like this without giving them the side-eye and mentally tucking your wallet under your seat. I would say no. Firmly. Politely. You don't know them that well, which is fine. But don't react to them like they've tried to rob you if you haven't got a reason to think they're a con artist.
posted by Armed Only With Hubris at 6:56 AM on March 29, 2021 [6 favorites]

One solution is gifting them a couple of months rent which they can offer to the landlord as prepayment. Some landlords are ok with that. I wouldn't serve as guarantor though.
posted by jello at 8:21 AM on March 29, 2021 [1 favorite]

Unless you’re independently super wealthy this should be a no. At least for me it would instantly be a sorry friend but I am unable to do this.
posted by RichardHenryYarbo at 10:04 AM on March 29, 2021

I have done this for a very old friend (thirty adult years and counting ) who had the money in a bank account but for [reasons] needed a guarantor. They knew it was a big ask even in these circumstances and were careful to frame the request in a way that made it very clear that 'no' was a totally acceptable answer.

I wouldn't even consider it in the circumstances you describe.
posted by tardigrade at 12:18 PM on March 29, 2021

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