Rent guarantees as additional security for landlords - financial risk for guarantors

Rent guarantees as additional security for landlords - financial risk for guarantors

According to a report by www.tagesspiegel.de,

Anyone renting an apartment can either pay a deposit or provide a rental guarantee. Rent guarantees are particularly common in metropolitan areas and serve as additional security for landlords. People with low or irregular income, such as trainees, students and freelancers, in particular, often rely on a rent guarantee to find an apartment. But this can represent a major financial risk for the guarantors, as they are liable for all obligations arising from the rental agreement.

The guarantee must be carefully thought out and only entered into for the benefit of trustworthy people, as it assumes full payment obligation. There are no statistics on defaults in rental guarantees, but according to experts, defaults can occur more often in commercial leases than in apartments.

It should also be noted that, according to residential tenancy law, no additional rental guarantee may be required if a deposit has already been paid. Double security is only permitted if the tenants offer the guarantee voluntarily.

The decision to take out a rental guarantee should therefore be carefully considered and only considered under certain conditions. It is a responsible financial commitment based on mutual trust and capital.