Co-signing a lease for an apartment is an important decision because the potential negative impact on the co-signer can be quite high. When a person co-signs a lease, the co-signer is agreeing to pay the rent for an apartment in case the actual renter stops paying or damages the apartment. A co-signer is betting on the renter's responsibility and financial security. The pros and cons of this situation, then, depend on whether or not the renter is actually responsible and whether or not this situation leads to legal or financial trouble for the co-signer.
Commonly, people are advised against co-signing a lease because of all the negative consequences that can arise if the renter does not fulfill his or her responsibilities. The co-signer is responsible for all of the rent for the apartment, which can be an immense financial burden. One major problem that can arise is when more than one person shares the apartment but only one of those people has a co-signer. In this case, even though a person may have thought that he or she was only co-signing for one person, he or she may have effectively co-signed for both because the co-signer is responsible for the entire rent.
In some situations, co-signing a lease may also lead to reduced access to credit for the co-signer, negative credit history in the event of unpaid debts, or even legal battles over the apartment. On a social level, co-signing a lease can lead to interpersonal strife between the co-signer and the renter. While co-signing on a car can leave a co-signer some recourse, such as repossessing the car, an apartment does not always lend itself to this type of action.
Even given all these negative possibilities, there are still some positive aspects to co-signing a lease. In many cases, a person may not be able to rent an apartment without a co-signer, particularly when the renter is young and lacks a credit history. A parent might benefit from co-signing on a child's apartment because doing so promotes independence and helps the child transition into adulthood. Co-signing a lease provides very few financial benefits, but the social benefits can be great when all payments are made according to plan.
The pros and cons of co-signing a lease depend on the specific situation at hand. For trustworthy renters, there may be no problems associated with to co-signing a lease, but for delinquent or irresponsible tenants, the problems can be quite devastating. When weighing the pros and cons of co-signing, the co-signer must weigh the renter's character against his potential risk.