So your tenant applied for your rental property and he or she was not the ideal applicant due to low credit score or lower than ideal income. So they offered to have a parent or a friend sign as a guarantor for them. What does that mean?
A guarantor is a third party to a contract who agrees to become financially liable for a debt unpaid by your tenant to you.
Sounds perfect, right? Well, it’s not a ‘get out of arrears free card’. The process of collecting outstanding rent is just that – a process. The first step is to understand that this guarantor is not a tenant. He or she is not responsible for the terms of the lease and the LTB will not order the rent arrears be paid by the guarantor. This is where having a paralegal guide you through the process can be your saving grace. An experienced paralegal who knows the process and how to set yourself up for success is your best asset. If you don’t have the correct documents in order properly at the beginning of the tenancy, you won’t be able to collect the arrears from the guarantor at the end. If you or someone you know is dealing with a bad tenant, give us a call and we can guide you through the process and get you on the road to a healthy tenancy. Protect your investment!
