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My roommate is behind on the rent. I'm not able to pay her half, and my father is our guarantor. If the situation were to get bad, how will my father be affected? Would I be able to break from my lease?
Let's rip this Band-Aid early: Just because you're not the one who's flaked on payments doesn't absolve you (or your dad) from covering the rent.
"In the event that the overdue rent isn't paid, your father will be liable," says Charles Schoneau, managing director of Insurent Lease Guaranty, an institutional guarantor solution and Brick Underground sponsor. "There are no two ways about that."
[Editor's Note: Have a question for our experts? Send us an email. This article previously ran in February 2015.]
According to most standard lease and guarantor agreements, "all roommates are liable for the entire apartment's rent, and by extension, guarantors are liable for the full amount," says landlord Arik Lifshitz, co-founder of DSA Realty. "This happens all the time." (It's also why we advise potential guarantors to proceed with caution.)
Worst case scenario? Your landlord drags you, your roommate, and eventually your father to housing court for non-payment, earning you and your roomie spots on the tenant blacklist. In all likelihood, your dad will have to pay whatever the landlord is owed (plus potential legal fees), and all of your credit scores will take a major hit.
"The landlord can sue one of you for the full rent if the other stops paying," notes Catharine Grad, a real estate attorney with Grad & Weinraub. "It's not a defense to say 'but I paid my share.'"
And, as with so many other housing disputes, there's a big difference between what you're legally entitled to do here and what will actually get you the results you want. While you've got every right to take your roommate to Small Claims Court for her portion of the rent, as Grad puts it, "if the roommate has no money for rent, what do you expect to get out of her in court?" Plus, if you're both on the lease, kicking her out will be a tough thing to pull off. Instead, your best bet here is diplomacy with both your roommate and the landlord.
Talk to your roommate, and if her financial situation isn't going to change anytime soon, see if she'd be open to moving out so you can replace her with a subletter who'll actually pay the rent. If she's open to it, ask the landlord to update the agreement so it's in your name only, which means more responsibility for the apartment, but also more control over who lives in it, says Lifshitz. (And bear in mind that even if the roommate isn't on the lease, she has certain legal rights, and evicting her will still be a tricky process.)
While it might be nerve-wracking to talk to the landlord, they may help you find a solution that doesn't involve a trip to housing court. "It doesn't hurt to ask the landlord and say, 'Listen, it didn't work out. I want to do the right thing by you financially but I can't afford to pay the entire rent and I'm worried my roommate isn't living up to it,'" suggests Lifshitz. It's unlikely they'd want to let you out of the lease—these are legally binding agreements, and winter is a notoriously slow season for the rental market—but, as he puts it, "hopefully the landlord is reasonable and willing to negotiate." (And if they do try to give you a hard time, don't forget that you're well within your legal rights to bring in a subletter.) That said, you should still be prepared for the landlord to come after the most reliable source of cash in the situation: your father.
Lastly, this is a prime opportunity to learn how to protect yourself in future rental agreements. You may want to consider splitting the cost of an institutional guarantor like Insurent among roommates so that the burden for backing the lease doesn't fall on just one tenant (or one tenant's parents). Lifshitz also recommends signing a roommate agreement up front saying how much of the rent each of you agrees to pay, which can be useful if you do eventually head to Small Claims Court. "[This situation] is a reminder that when we choose our roommates and our co-tenants, that we have to think about it almost as a business venture," says Grad.