Who is a Rent Guarantor and What Do They Do?

When moving to another country, one of the main concerns that many people have is where they will live.  

That’s no different as an international student; indeed, it can even be more stressful, as you may not have any contacts where you’re going! 

Luckily, our team here at BorderPass has expert knowledge of the processes you’ll need to follow - so you’ve come to the right place!

In this article, we’ll be talking about rent guarantors. You should read this article because it will explain what one of these is, why you need it, and how to go about getting and formalizing a rent guarantor.

In particular, we’ll cover:

• What a rent guarantor is
  
  
• Some common reasons why a rent guarantor may be required
  
  
• Who you can ask to be a rent guarantor
  
  
• The responsibilities of rent guarantors
  
  
• How to get into Canadian student housing
  
  
• Some FAQs

Let’s get into it!

What is a Rent Guarantor for International Students?

A rent guarantor is someone who “guarantees” your ability to pay rent for your accommodation.  

This is different from someone who might give you a good reference for your accommodation or job application. Rather than just putting in a good word, they are financially liable should you be unable to pay your rent.

A guarantor’s exact responsibilities will vary depending on the terms of your lease agreement with your landlord.  We’ll touch on some of these later in the article.

It’s worth noting that a guarantor will only have to contribute money if you are unable to do so from your own funds.

Why Do You Need a Rent Guarantor?

First-time Renter

First-time renters can be seen as a risky proposition by many landlords, as they have no tenancy history to work with.  

This means that they are potentially inviting people into their property who may not take good care of it, engage in antisocial activities in the neighborhood, or even cause active damage or commit crimes in the property.

As a result, many landlords want to make sure that this potential cost will be covered.

And seeing as they have no record of you being able to make rent payments on time either, they may want to see a guarantor present who does have a history of making regular payments and good financial standing!

Low Income

Low income is another similar reason why a landlord may ask for a guarantor on your lease, as it indicates that you may not be financially stable enough to consistently pay the rent on the property.  

Even if you can cover the rent, a landlord may still ask for a guarantor to ensure that any property damage is paid for, or in case you temporarily lose some or all of your income.

Irregular Income

Just like low income, irregular income is another warning sign for landlords.  

Even if you get paid thousands of dollars every paycheck, this isn’t worth much to a landlord if you are only getting it sporadically, with no sensible schedule of payment; you may run out of money before it is time to pay!

Non-Residents

Being a non-resident of Canada can also be a reason for a landlord asking for a guarantor.  

This can often be because your landlord doesn’t have much information on you, as your files and records are stored in another country where they likely can’t access them.  

This means they can’t tell whether you are a good tenant, make payments on time, and so on – so they may want the extra reassurance of a guarantor.

Who Can Be a Rent Guarantor?

A rent guarantor is typically someone with a high (or at least respectable) credit score, with good financial standing in general.  

They must have this credit score recognized by one of the major credit providers in Canada, which typically means that they must have a financial history in Canada (for example a Canadian bank account, transactions that have been completed in Canada, and so on).

While there is no express comment that a guarantor must be a Canadian resident or citizen on the official website, this is a commonly-held popular opinion.  

This is for one simple reason: legal liability is much harder to enforce across international borders.  

Landlords will be understandably wary about having someone who they cannot prosecute guarantee your rent.  

This doesn’t mean that you can’t have someone from outside the country as your guarantor – as long as they have a Canadian bank account and a good credit score.

Responsibilities of a Housing Guarantor for International Students in Canada

Act As an Assurance

Any housing guarantor must provide assurance to the landlord that they will not be caused to lose income from the tenant's missing rent payments.  

This is their primary function in the role, so ensuring that your guarantor has a strong financial standing and credit rating is important.  

Similarly, they need to be able to be found if things do go wrong, so they should be easily accessible within Canada.

Pay Rent If Needed

If everything goes downhill, the guarantor will actually need to step in to pay rent.  

Depending on how you have arranged your lease and whether you are living alone or with other people, this can be anywhere from your portion of the rent in a multi-person flat to the entirety of the rent for a multi-person flat.  

It’s a good idea to discuss with co-tenants and the landlord during the application process what your guarantor will be responsible for.

Be Liable for Any Damages

If you damage the property in any way, your guarantor will become liable – which means they will have to ensure that the repair costs are paid.  They will also likely be liable in any criminal suit should the damages be proven to be malicious.

How to Get Student Housing Canada Guarantor

Getting a guarantor for student housing in Canada can be difficult.  

The process is typically much easier if you are renting accommodation provided by your university, known as “living in residence”.  

This is because they are used to international students, and so can help you with the process of finding a guarantor or waive this requirement entirely depending on their process. You should check with your institution as to what their particular procedures are.

If you are looking at privately owned rental accommodation, you will need to find a guarantor another way. 

Your educational institution’s international student program will likely be able to assist you in finding a guarantor.  

BorderPass may also be able to assist you; for example, using the mobile app to access the housing portal can be a great way to streamline the process!

Student Housing Canada Guarantor Cost

In theory, a guarantor does not cost anything.  However, this is likely to not be the case if they are someone you don’t know, as they will be taking on a significant risk.

In general, a housing guarantor will need to have enough money on hand to cover several weeks of rent to allay any doubts from the landlord.  

If you’re wondering whether your finances are sufficient, you could check out our article about how much monthly rent is in Canada and work off of this.

Key Takeaways

Hopefully, this article has helped you with the question of what a guarantor is. In general, a rent guarantor:

• Is someone who is financially liable for any missed rent or damage payments
  
  
• Is someone who the landlord asks for in order to allay doubts about a new, low-income, or intermittent-income renter
  
  
• Must have a Canadian bank account and/or credit history
  
  
• Often a Canadian resident.

Good luck with your housing search!  And if you ever need a hand, BorderPass is happy to help.

Frequently Asked Questions

What Happens When the Student Guarantor's Liability Ends?

When a guarantor’s liability ends, they are no longer required to meet any costs related to the tenancy.  

Liability typically lapses when there is a major change to the lease or when a student moves out of the property and off the lease, and it is unlikely that a guarantor’s liability will lapse otherwise – especially in the case of a short-term lease and a first-time or international student renter.

Can a Guarantor Be Retired?

Individual landlords will set their own requirements. However, there is nothing in Canadian legislation that forbids a guarantor from being retired.  

Retired guarantors may need to demonstrate a larger degree of financial solvency, as they aren’t receiving income from work anymore.

Is a Guarantor Good?

Having a guarantor will often help you find housing (or better housing) as someone with a poor credit history or financial rating.  

This is generally a good thing as it means you will find adequate accommodation; however, it is often cleaner to apply without a guarantor where possible.