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Guarantor for renting a property: why is it still required?

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You are ready to rent a property, you have already found the ideal apartment or house for you and your family in a good neighborhood and will start organizing all the documents requested by the real estate agency. And this is exactly where many people stop, as some landlords require a guarantor to rent a property.

The controversial figure of the guarantor exists to legally guarantee that the rent will be paid in some way. When the lessee fails to make the agreed payment, it is the guarantor who is responsible for this debt, and may even have the property placed in the contract as a form of payment.

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Although there are other ways to ensure that the tenant is able to keep the rent up to date, such as deposit check or specific insurance for these purposes, some landlords still prefer the guarantor.
Therefore, in today’s post you will understand what the guarantor’s right and duty are, what are their legal protections when taking on the lessee’s debt, whether there are other options for renting a property that does not involve third parties and the documents that the guarantor must have to be approved in the lease process. Follow and learn more!

Check below why the guarantor to rent a property is still required to close a deal.

Owner requirement

The real estate agency exists precisely to guarantee the safety of the lessor and the lessee during the property rental process. Therefore, when placing their assets for lease, the owner needs to feel confident that they will receive the amount initially proposed.

Therefore, it is up to the owner to choose between the types of insurance that he will accept from his future tenants. Some currently choose to only rent with surety bond, which replaces the guarantor by taking out an insurance policy, which breaks down the value of the property.

However, some landlords still prefer the traditional form of an in-person guarantor for guaranteed payment. Therefore, it is completely legal and common for some landlords to make demands on guarantors and surety bond on their properties available for lease.

Also within the issue of guarantor, certain owners are even more demanding: some ask the guarantor to own a property in addition to the one he lives in, others still demand that he own the property in question in the same city.
Finally, the practice of asking for a guarantor ends up limiting those who do not have any choice of friends or family that fit the requested profile.

What is the duty and what is the guarantor’s right

The responsibility a person assumes in becoming a guarantor is also their main duty: to assume the tenant’s debt if he defaults on the rent.

The landlord can even activate it without notifying the tenant that he is going to do it, notifying that the rent is already in arrears for the first month, if so specified in the contract.

The equity described in the lease agreement referring to the guarantor’s properties is what will be entered into the account as payment for this debt.

As a right, the guarantor can demand the waiver of this function at any time, and the lessor is obliged to present a new guarantor to the owner or real estate agent within a period of 30 days. If this does not occur, the lease can be canceled.

The guarantor can also trigger the so-called “order benefit”, which means to indicate assets owned by the lessor that are free and cleared to try to settle the lease debt without having to use their assets.

Required documentation

It is known that the guarantor must own a property paid off and prove a monthly income that is sufficient to cover the rental costs if the lessor defaults.

Currently, people request that close friends or family members take over this position, as it is a delicate situation and involves a lot of trust in the landlord.

When defining who will play this role in the property’s lease, the following documents for evaluation must be delivered to the real estate agency:

For Individual guarantor:

  • RG and CPF (of the couple, if necessary);
  • Marriage Certificate, if any;
  • document that proves the income of three or more times the rent amount, which can be a professional card, income tax declaration or pay stubs;
  • copy of the property’s property tax which will be given as security;
  • Certificate of Royal Liens.

For Legal Entity Guarantor:

  • RG and CPF of the company’s owners or legal representatives;
  • Social contract and all its updates. It must also be verified in this contract if there are any restrictions that prevent the guarantee to third parties;
  • power of attorney for legal representatives (if applicable);
  • document of the last two fiscal balances and last balance sheet;
  • CGC card;
  • State or Municipal registration card.

Important information’s

Some time ago it was authorized by the STJ that the only property that the guarantor has and that was given as insurance at the time of signing the contract be pledged in case of debt. This decision came after a series of acts of bad faith, in which the guarantors claimed to have only one property, when in fact they owned more than one, to avoid the risk of attachment.

In other words, if you have accepted to be a guarantor, it is important to be informed that family assets, including the house where the guarantor lives, may be subject to attachment if there is a legal need to collect unpaid rent.
It is important that the guarantor always evaluates the contract before signing it and questions any clause if he is in doubt about the duties imposed therein. The guarantor also has full right not to sign the contract when it indicates a clause with which it does not agree, thus asking to modify it.

Being a guarantor requires mutual trust so that there are no future problems. Even though it is still the choice of many owners who feel more secure in this way, it is worth negotiating and seeing if there is the possibility of contracting a surety bond or even making a deposit.

These alternatives require more purchasing power from the lessor, but they eliminate the need for the guarantor and can make the rental process easier.