Every rent guarantor promises to pay you if the tenant doesn't. The real test is what happens on the first of the month when the rent never shows up.
PandaGuarantee CEO Tom DeRose walked through that moment step by step with Brad Pollina, a partner and commercial litigator at Bergstein Flynn Knowlton & Pollina. Brad's Manhattan firm handles commercial lease disputes and guaranty matters, and he hosts Closed!, the firm's weekly podcast on New York City real estate. He asked the questions a careful owner would ask.
Below is how a PandaGuarantee claim works, from the missed payment to the money in your account.
Who pays for a rent guarantor?
Usually the tenant. A renter applies at one building and gets turned down, then gets turned down at the next one, because most New York owners screen on similar income and credit bars. So the renter buys the guarantee, and a surety bond is issued to the landlord.
An owner can pay for it instead, but few do. In a tight market, most owners tell the applicant to come back with a guarantor that meets their requirements, whether that's a company or a parent.
PandaGuarantee is free to landlords. Tenants pay about 20% less than they would with competing guarantor services, and they can spread the premium over monthly payments. A lower fee means fewer approved applicants walk away before signing.
Why a parent in another state is a weak guarantee
Tom's example will sound familiar to any owner who has tried to collect from a co-signer:
"If someone's parent is in Idaho, you have to call them, email them, and then there's the chance they just say no."
Then you sue. In Idaho. Brad, who litigates these disputes for a living, summed up the odds in two words: "good luck."
A personal guarantee depends on a stranger choosing to pay you, sometimes years after they signed. If they refuse, your remedy is a lawsuit in their home state, and winning the judgment still leaves you collecting it.
PandaGuarantee replaces that with a contract and a claims process that runs the same way every time. That consistency is why owners value an institutional guarantee more than a personal one.
Brad's instinct as a lawyer was to want both: "why not belt and suspenders?" PandaGuarantee lets applicants add a personal guarantor to their application. That can strengthen a borderline file and lower the tenant's premium, while the claim you'd file still runs through PandaGuarantee.
When can you file a claim?
Once the tenant is a full month behind. Tom's example: rent due June 1 is still unpaid on July 1. At that point you can file.
Before you do, PandaGuarantee expects you to have told the tenant they're in default. A couple of emails and a phone call often solve the problem on their own. In Tom's words, "a little bit of pressure will just kind of remind them to pay."
What do you need to submit?
Less than most owners expect. Tom said a claim comes down to two questions:
"Did the tenant pay rent? Yes or no? If it's no, how much did they not pay?"
To answer them, you send:
- A rent ledger
- The fully executed lease
- Your communication with the tenant about the missed rent
Owners who have filed before usually get one or two follow-up questions at most. New partners get more back-and-forth the first time through. Claims are paid in 3 business days.
Two ways to get paid
You can wait and claim the whole loss at once, after the tenant is out and you know the final number. Or you can claim monthly, and PandaGuarantee pays a month of rent for each month the tenant stays behind.
Monthly takes a bit more paperwork, since you're checking in every month. Tom said it's "much more valuable to smaller owners," and the reason is obvious if you have a mortgage payment due on the 1st. Your rent keeps arriving while the eviction works its way through court.
What if the eviction outlasts the lease?
Say the tenant defaults in month 10 of a 12-month lease, and the eviction takes another year. What's covered?
In Tom's experience, a full New York eviction against a tenant who refuses to leave often runs more than a year. Miss a step in the process and you can end up close to where you started.
Coverage continues for the rest of the lease, then holdover coverage kicks in for the time the tenant stays past the end date. The common standard is two months of holdover. PandaGuarantee covers four. You choose your coverage limit when you sign up.
What a guarantee doesn't fix
PandaGuarantee coverage can include unpaid rent. It doesn't make the eviction go away. You still have to take the tenant through housing court, and PandaGuarantee requires partners to treat a guaranteed tenant exactly as they'd treat anyone else.
Tom was direct about this:
"Even if all your rent is guaranteed, there's lots of intangible costs that are impossible to insure."
That's why the underwriting happens before move-in. PandaGuarantee looks at credit, income, savings, and whether the applicant has a personal guarantor. Applicants also verify their ID against a government database and can connect their bank account so income is confirmed at the source. When something doesn't add up, a person reviews the file.
Those checks matter more every year. Tom said AI tools can now produce bank statements and IDs that pass a visual check, where a year ago a fake was easy to spot. A real bank connection is much harder to fake. A clean PDF of a statement is not.
Should you require one?
If you're turning away students, international renters, self-employed applicants, or recent relocators because they miss your income bar on paper, a rent guarantor lets you say yes without lowering it. If a tenant defaults, your rent comes from a claims process with a clear trigger, a short document list, and a 3-business-day payout. You don't have to track down a parent in Idaho.
Register your building at pandaguarantee.com, and the next time an applicant comes up short on paper, send them to PandaGuarantee.