My guarantor was rejected because they live in Connecticut. What's the deal?
Every NYC landlord has their own rules on who they accept as guarantors.
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A landlord rejected my parent who lives in Connecticut as my guarantor because they don’t live in New York. I thought guarantors could live in the tri-state area. What’s the deal?
There’s no hard and fast rule about who can be a guarantor in New York City, which is why your landlord rejected your choice of guarantor.
Instead, it’s up to each landlord to decide who to accept, says Becki Danchik, a broker at Coldwell Banker Warburg. About 50 percent of NYC landlords accept guarantors who live in the tri-state area, some prefer ones who live in New York, and others will approve guarantors who live outside of the tri-state area, she says.
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Some large property management companies allows personal guarantors who live out of state as long as they provide financial documents, says Annie Cion Gruenberger, a broker at Coldwell Banker Warburg.
Some landlords require a guarantor to live in the tri-state area because it’s easier to track them down if you default on your rent. Some states also have laws that make it more challenging to sue for back rent.
When it comes to qualifications for guarantors, it’s usually the same no matter where the guarantor lives, Danchik says. They are of course a tall order: Guarantors must earn an annual income of at least 80 times your monthly rent and have solid credit. (The thinking is they need to make enough to cover your housing expenses on top of their own.)
Jeffrey Geller, vice chairman and chief operating officer at Insurent (a Brick Underground sponsor), says many NYC landlords have become more reluctant to accept personal guarantors who live out of state over the last few years. Many parents also cannot meet the strict income requirements required by most NYC landlords, he says.
If you don’t have someone else who lives in New York to be your guarantor, you can try to use an institutional guarantor like Insurent. To qualify for Insurent, you must have a minimum annual income of 27.5 times the monthly rent or cash assets or publicly held securities of a minimum of 50 times the monthly rent, and decent-to-good credit.
Don’t qualify on your own? Your parents can be your signatory on the Insurent agreement, which has less stringent requirements. They can live “anywhere in the world” as long as they have an annual income of 50 times the monthly rent or have cash assets of 80 times the monthly rent, Geller says. And they just need to provide a driver's license and pay stubs or a bank statement—much easier than providing tax returns and credit checks to a landlord.
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