Guarantor Tenancy - When is it needed?
When you sign a rental agreement for an apartment, your landlord, in this case Slättö, will make a credit check. If it is assessed that you will not be able to pay your rent according to the agreement, for example because you have too low an income, you may be refused the apartment. In these situations, you can use a guarantor to assure the landlord that the rent will be paid on time every month.
What is a guarantor?
If you don't have a high enough income or have too many existing loans and expenses, you may be refused a tenancy agreement. This is an assessment made after the landlord has carried out a credit check to see what your financial situation is like. If the landlord considers that you will not be able to pay the rent, you can use a guarantor to sign the contract and get your rental apartment.
A rental guarantor is like a kind of insurance that your rent will be paid every month. If you as a tenant do not pay your rent on time, the landlord has the right to claim the money from your guarantor. The landlord also carries out a credit check on your guarantor before signing the contract, to ensure that he or she can afford the guarantee and can pay your rent if you cannot afford it yourself.
When is a guarantor needed for rental property?
You need a guarantor for a rental apartment if it is judged that you cannot afford to pay the rent according to your rental agreement. Before you sign a rental agreement, the landlord makes a credit check to see if you have any existing loans or other debts. The credit report also shows your income from the previous year and whether you have debts to Kronofogden.
If your income is too low or you have one or more large debts that you need to pay off every month, you can still sign a tenancy agreement with a guarantor. Of course, your guarantor must also show that he or she can afford to pay the rent if you cannot. A guarantor is therefore needed in situations where you want to sign a contract but you are not considered able to pay the rent on your own.
What are the obligations of a guarantor for your rental property?
What happens if there is damage to the apartment that you cannot afford to pay for?
When you sign a rental agreement with a guarantor, the guarantor has the same obligations as the tenant. Both in terms of both payment of rent and responsibility for any damage and faults caused by you while living in the apartment. This is according to the Rent Act.
In addition, there is no ceiling on the number of months of rent or the amount the guarantor may owe if the tenant does not pay the rent. In cases where the tenant has not paid their rent, the guarantor is notified of this via the debt collection company we work with.
How long is a contract with a guarantor for rental property valid?
A rental agreement with a guarantor is valid for at least two years. The time limit applies to the guarantee and not to the lease itself, which is valid until terminated by either the landlord or the tenant.
If the tenant's financial situation has improved after two years, he or she can terminate the guarantee and stand on the lease without a guarantor. When the guarantee is terminated, a new credit check is carried out to assess whether the tenant can afford to pay the rent, just as before the original signing of the contract.
In which situations is it good to have a guarantor for rental property?
If you are young and have just started working, your financial situation is probably not stable enough to sign a rental contract. In these situations, parents often act as guarantors for their children so that they can sign a contract for their own apartment. In some cases, guarantees are also used when a couple moves in together to try cohabitation but one partner wants to keep their own apartment. If the person on the lease is deemed unable to afford the rent, the partner can act as a guarantor for the lease. Being a guarantor for someone is helping them to sign a contract for something they are not deemed to be able to afford. However, as a guarantor, you should always remember that you are signing up to cover the costs if the tenant cannot afford their rent or other costs.
Can a guarantor of a rental property take out a loan during the guarantorship?
An important factor to remember when guaranteeing someone is that it affects the guarantor's credit rating. For example, if the guarantor needs to take out a loan or sign his or her own lease, the guarantee will appear on his or her credit report. It is therefore important to take a long-term view and decide whether your guarantorship will affect your own future plans. It is of course possible to terminate a guarantee, but only after at least two years after signing the contract.