What First-Time Landlords Need to Know About Co-Signers & Guarantors
When it comes to your first rental property, managing first and last month’s rent or a security deposit (depending on the province), concerns about damage, finding the right tenant and even the financial concerns around evictions can be a lot to take on. But, being a landlord doesn’t have to be so complicated, especially when your property is backed by a guarantor.
Generally speaking, a residential guarantor is someone who signs as a co-signer and agrees to pay the rent for a tenant if the tenant fails to pay. Often this is someone’s friend or family member, but this may not always guarantee that if unforeseen circumstances occur, you’ll have a stress-free resolution to the problem. Namely, clauses in standard lease agreements are usually vague and rarely specify what the co-signer is guaranteeing. Sometimes, the clause refers to a separate document that is actual guarantee and sadly, many landlords don’t realize that agreement was never signed or obtained until it’s too late.
LOCNEST gives landlords peace of mind.
BBecause the law of guarantee is quite complex, LOCNEST simplifies the process for landlord and tenant. A LOCNEST Lease Guarantee provides certainty to the landlord that their tenant is backed by a credible third party that will step in and pay the landlord in the instance of lease default, damage to property and even related expenses.
Here’s some benefits to a LOCNEST Lease Guarantee:
- Each new tenant’s guarantee application begins with LOCNEST’s own online vetting process. Whether a future tenant is requesting a Lease Guarantee Pre-Approval to accompany a rental application or applying directly for the official Certificate of Lease Guarantee, LOCNEST begins with an automated credit check supplied by Equifax or with a manual process for more specific request to evaluate whether a tenant is eligible.
- We can eliminate the burdensome administrative process associated with holding last month’s rent. You may choose to offer qualifying tenants the option to save their cash because now your tenant is backed by a credible guarantor. This can increase the number of applicants, but you will only need to consider those who qualify for a guarantee, making identifying your shortlist so much faster!
- We cover damage up the maximum guarantee amount. We can replace the traditional security deposit in jurisdictions where they are permitted, and in Ontario and Quebec, where they are not permitted, we are the only legal alternative. In provinces where they are permitted, a security deposit may only be equivalent to half a month’s rent – the addition of a lease guarantee provides an additional layer of protection over and above.
- Avoid having to deal with credit agencies. Locnest takes care of that for you. Our process saves you time and the expense of vetting your tenants. We take this on so all you have to do is find the perfect tenant for your rental.
- Evictions? No problem. We can’t help with the administration of filing an eviction notice, but landlords do have access through the guarantee funds in order to offset the associated costs with the eviction process. Evictions can cost landlords up to $9K depending on the province and regulations. As a first time landlord, that’s a huge blow to your plans and a lease guarantor can help your recover some of those costs.
- Lease Guarantee is available at no cost to landlords. Yes, you heard correctly, when you choose to partner with LOCNEST and request your tenants obtain a LOCNEST Lease Guarantee, the tenant pays a low annual fee. Nothing to lose and everything to gain for peace of mind!
LOCNEST is built on a successful 25-year-old Swiss model, the Lease Guarantee model holds almost 30 percent of market share in Switzerland. New in Canada, we partner with landlords to streamline the renting process and help you focus more time to find the perfect tenant. With so much competition for rentals in Ontario, Alberta, British Columbia and Quebec our service allows you to rent stress-free!
To find out more information about how a LOCNEST Lease Guarantee can help you and cover your property call us today and speak to one of our local team members at 1-833-LOCNEST.