Over the past decade, landlords have increased their application requirements for tenants. This stringent screening stems from the fact that the landlord-tenant law in NYC typically favors the tenant when an eviction proceeding is leveled. Thus, landlords want tenants to show income of typically 40x the monthly rent and good credit. Applicants typically need to provide tax returns, bank statements, employment verification, and pay stubs to get an approval.
If the tenant doesn’t the income required and/or have good credit, often they are in need of a Guarantor. A Guarantor is an individual who co-signs the lease in order to secure it for the applicant. Here are some things renters need to know about securing an apartment using a guarantor:
* Guarantors need to submit all the same paperwork as the applicant as well as fill out an application to run credit/background. Also they often need to notarize a guarantor form or letter.
* Some landlords require in-state or tristate guarantors. This is because “it is much harder to pursue judgments from afar,” explains Jamie Heiberger, a lawyer who represents landlords (NY Times).
* For landlords who do take out of state guarantors, some will not take them from Florida, Texas, or Louisiana. This is because those are ‘homestead states.’ Homestead laws in those states protect residents by allowing them to register a portion of their property as “homestead,” making it off-limits to most creditors. This means that they are more protected if a landlord is coming after them for rents due.
* For those who do take guarantors from all 50 states, they need to show that they make 80-90x the monthly rent. Keep in mind that the average rent is around $3,000 in Manhattan, thus requiring a guarantor to show around $240,000 on income taxes.
So what can a renter do if they don’t meet the requirements or have a specific situation? As always, I advise that renters consult a real estate professional who knows the ins and outs of what each landlord requires. Those who work with rental apartments will know which landlords will be more lenient. Also, some landlords will allow insurent.com, a company that acts as a guarantor (for a fee) in order to secure the lease. If you have other questions about the rental process in NYC, feel free to reach out at lauracook@kw.com.
