SD Alternative
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SD Alternative (by GKARL [PA]) Apr 11, 2021 10:56 AM
       SD Alternative (by GKARL [PA]) Apr 11, 2021 10:59 AM
       SD Alternative (by WMH [NC]) Apr 11, 2021 11:01 AM
       SD Alternative (by Ken [NY]) Apr 11, 2021 11:06 AM
       SD Alternative (by GKARL [PA]) Apr 11, 2021 11:23 AM
       SD Alternative (by Robert J [CA]) Apr 11, 2021 11:50 AM
       SD Alternative (by Allym [NJ]) Apr 11, 2021 12:20 PM
       SD Alternative (by plenty [MO]) Apr 11, 2021 12:41 PM
       SD Alternative (by Nicole [PA]) Apr 11, 2021 12:53 PM
       SD Alternative (by JB [OR]) Apr 11, 2021 2:34 PM
       SD Alternative (by GKARL [PA]) Apr 11, 2021 3:12 PM
       SD Alternative (by hubba huibba [CA]) Apr 11, 2021 3:18 PM
       SD Alternative (by WMH [NC]) Apr 11, 2021 3:55 PM
       SD Alternative (by WMH [NC]) Apr 11, 2021 4:05 PM
       SD Alternative (by Oregon Woodsmoke [ID]) Apr 11, 2021 4:25 PM
       SD Alternative (by Landlord ofthe Flies [TX]) Apr 11, 2021 4:34 PM
       SD Alternative (by 6x6 [TN]) Apr 12, 2021 11:48 AM

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SD Alternative (by GKARL [PA]) Posted on: Apr 11, 2021 10:56 AM
Message:

Renters struggling to pay security deposits upfront may have new options

Last June, Josh DeSon, a clinical psychology graduate student, had a choice to make: whether or not to take over the lease on his three-bedroom apartment in New York City’s Washington Heights neighborhood and be liable for the total costs as multiple roommates were losing jobs and moving out.

The Covid-19 pandemic had already driven many to leave the city and its high rents.

The apartment’s lease came with a hefty security deposit, including the first month’s rent, that totaled more than $6,000. Then DeSon learned about security deposit insurance, a service that would allow him to pay monthly, rather than the entire lump sum.

“I wish people knew you don't have to sell a kidney just to live in an apartment,” he said. “Just because you don’t have money saved up, or a family that can’t front the money, or you’re from a low-income background, it doesn't mean you can't do things.”

Local legislation and companies offering security deposit alternatives have grown in response to the increasing number of those struggling to pay their monthly rent. New legislation, referred to as “Renter’s Choice,” and companies, such as Rhino and Jetty, allow property owners to offer low-cost alternatives to lump-sum cash security deposits, giving renters the ability to choose flexible payment options.

On the legislative side, bills have already been passed in cities such as Atlanta and Cincinnati. State governors have issued executive orders in New York and New Jersey that would provide renters with alternatives.

Some elected officials, such as Los Angeles Mayor Eric Garcetti, Miami Mayor Francis Suarez, Cincinnati Mayor John Cranley and others, have also signed an open letter calling for legislation to provide renter stimulus options locally.

“High upfront moving costs can be a barrier to housing stability for many, and providing lower cost alternatives may help some families and individuals navigate a changing economic landscape,” Richmond, Virginia, Mayor Levar Stoney, who signed the letter, said in a statement.

On Monday, the Baltimore City Council voted 12-2 to pass legislation supporting alternatives to lump-sum security deposits.The bill now goes to Mayor Brandon Scott.

It has the potential to unlock $275 million now eligible to be put back into renters’ pockets, Rhino co-founder Ankur Jain said of the Baltimore legislation. He added that many lower income buildings across the country have not yet adopted such renters choice options, with 80 percent of rents still collected through checks.

“We have a large number of residents that live in poverty. Some of the statistics are we had 30,000 renters that spend more than one-third of their income on housing,” said Baltimore City Council Vice President Sharon Middleton, who introduced the legislation in January.

“I just know when we start to get better with Covid state of emergency that there’s just going to be an influx of evictions, people downsizing and looking for apartments,” she added. “I'm excited that there's now going to be options where people can choose to help any kind of financial situation.”

With Rhino, the platform replaces the traditional security deposit to a landlord and instead provides renters with a monthly low-rate insurance policy, simultaneously providing protection to property owners. It frees up money for the renter and provides the coverage that landlords require. For renters, this means paying a monthly rate for insurance that's scaled to their rent. For property owners or landlords, Rhino covers excessive damages or the loss of rent.

More than 10 million Americans are behind on rent or mortgage payments, with more than 5 million saying they are at risk of eviction or foreclosure, according to a Census Bureau survey. The Biden administration has extended a moratorium on housing evictions through the end of June. But Jain argues it’s a temporary fix.

“The challenge is once the moratorium ends, which eventually it will end, people are still racking up a lot of debt if they're not able to pay rent, which is as bad,” he said. “So it gives you temporary relief, but it doesn't solve the problem.”

Rhino’s platform, which DeSon used, seeks to free up $45 billion across the country that is currently tied up in security deposits, and turn it into stimulus for American renters, returning an average of $1,400 to renters’ pockets while simultaneously protecting the city’s property owners.

Cristy Hill of South Haven, Mississippi, a mother of three, also uses Rhino. The company’s service was offered through the apartment building she moved into during the pandemic.

“It was a blessing in disguise,” she said, adding that by using the service instead of paying for the security deposit, she saved money in the short term that went toward electric and gas, as well as setting up her new apartment.

“Nobody is mandating any sort of new way of doing things, it’s mandating choices for renters,” Jain said. “Giving options to renters to make financial decisions that are best for them is really important. Right now they have no choices.”

Rhino’s model seeks to address housing affordability by providing an insurance as a simple alternative to traditional security deposits, in which the money sits in an escrow account that neither landlords nor residents can touch by law.

Renters are still liable, however, and could still be subject to claims from their landlords for missed rent or excessive damages. Critics also point out that few cities have clear laws that govern how the process works.

Cierra Winzor, a mother of two toddlers, was displaced from her Florida home and laid off from work following Hurricane Dorian in 2019. She left Florida to stay with her mother until she could get back on her feet. She learned about money-saving alternatives when looking for an apartment in Atlanta.

“It has helped me in the long run,” said Winzor, who used the services from Rhino when signing the lease for a new apartment. She said it saved her about $2,500 upfront, allowing her to instead pay $37 monthly for the security deposit insurance.

“I was able to save that money that I would have spent on a security deposit to build my credit, get into a better financial standing,” she added. “I was able to put my kids into a nice day care and thrive from that because I was able to keep that money and do what I needed to do to be in a better financial place. --209.122.xx.xxx




SD Alternative (by GKARL [PA]) Posted on: Apr 11, 2021 10:59 AM
Message:

The changes coming down the pike will most likely include something like this and some form of rent control. I think this will be a state by state sort of thing however rather than a national sort of thing. --209.122.xx.xxx




SD Alternative (by WMH [NC]) Posted on: Apr 11, 2021 11:01 AM
Message:

Question: how we ensure that they pay the $37 per month for the duration as required? Answer: we can't. Can't force anyone to buy anything. So if Tenant stops paying, our only option is eviction, with NO money in reserves now.

NOT a workable solution. :( --50.82.xxx.xxx




SD Alternative (by Ken [NY]) Posted on: Apr 11, 2021 11:06 AM
Message:

I agree with WMH,also how difficult will it be to actually collect from the insurance company? --72.231.xxx.xxx




SD Alternative (by GKARL [PA]) Posted on: Apr 11, 2021 11:23 AM
Message:

I'm guessing if they don't pay, you can set up things to be notified like renters insurance cancellation. I agree adding in the insurance company clouds the picture in terms of what they will pay. --209.122.xx.xxx




SD Alternative (by Robert J [CA]) Posted on: Apr 11, 2021 11:50 AM
Message:

24 years ago was the last time I allowed an applicant to make monthly payments towards the deposit! I was lucky enough just to receive the rent on time. If someone calls themselves an adult, then they should have learned about finance and a rainy day! --47.155.xx.xxx




SD Alternative (by Allym [NJ]) Posted on: Apr 11, 2021 12:20 PM
Message:

only way to do this is ll pays for the insurance. Short answers mean 5 lb maltese on lap --108.24.xx.xx




SD Alternative (by plenty [MO]) Posted on: Apr 11, 2021 12:41 PM
Message:

Is housing important or not? --172.56.xx.xxx




SD Alternative (by Nicole [PA]) Posted on: Apr 11, 2021 12:53 PM
Message:

several thoughts:

to those who pay more than 1/3 of their income for rent - if that's not acceptable, move to a cheaper unit or earn more income ...personal responsibility.

$275 million to renter's pockets - why not pay to a fund on behalf of the renter and then automatic payments monthly to the landlord.

at $37 a month insurance, for a place like mine with an $800 security deposit, after 22 months they are paying more than the security deposit would have been had it been paid up front, in full. Do we truly think whoever thinks up these brilliant solutions won't decide that's not fair and stop the rental payments?

And the big one - right now, I can deduct what I want from a security deposit and it's up to the tenant to challenge me in court if they disagree. Having a middle man decide what I can and can't legitimately charge for won't cut it. --72.70.xxx.xx




SD Alternative (by JB [OR]) Posted on: Apr 11, 2021 2:34 PM
Message:

This reads like an infomercial for Rhino!

GKarl, it would be wise to be siting your source when you post a direct story like this. --73.25.xx.xxx




SD Alternative (by GKARL [PA]) Posted on: Apr 11, 2021 3:12 PM
Message:

JB,

Google the title for the source --209.122.xx.xxx




SD Alternative (by hubba huibba [CA]) Posted on: Apr 11, 2021 3:18 PM
Message:

It's a useful tool for both Landlord and tenant.

Win-Win. Amend your lease to allow it and take care of any lapses in coverage.

But as always, read the fine print for the coverage. --157.131.xxx.xx




SD Alternative (by WMH [NC]) Posted on: Apr 11, 2021 3:55 PM
Message:

Hubba Hubba, not gonna happen. I can't even get Tenants to buy Renter's Insurance. I can require it in my lease, but if they let it lapse, my only recourse is to evict for breach of lease. Same thing here. --50.82.xxx.xxx




SD Alternative (by WMH [NC]) Posted on: Apr 11, 2021 4:05 PM
Message:

NC has long allowed LLs to buy an insurance bond instead of using a Security Deposit (cheaper for tenant!) It's right in our Security Deposit Act.

But not a single insurance company in NC sells them.

Why it is encoded in law is beyond me. --50.82.xxx.xxx




SD Alternative (by Oregon Woodsmoke [ID]) Posted on: Apr 11, 2021 4:25 PM
Message:

I might consider it if the landlord gets full deposit coverage whether or not the tenant actually pays their monthly bill.

The insurance company notifies you if the tenant doesn't pay their deposit insurance? Big Whoop. I can't evict a tenant for not paying their insurance bill. So the tenant gets in by cheating and lying and then in a month or two, I have no deposit coverage.

Another problem. Tenant will get no refund, tenant thinks all damage is prepaid by their insurance company. Tenant has no motivation to clean when they leave or to stop the dog from pooping on the carpet, and no reason to not steal the fridge. None of that is cutting into their deposit refund because they aren't getting any deposit back anyway. --76.178.xxx.xxx




SD Alternative (by Landlord ofthe Flies [TX]) Posted on: Apr 11, 2021 4:34 PM
Message:

I wonder if the landlord could still go after the tenant for unpaid damages if the insurance company declined to pay? I'm betting the insurance contract would say different. Also I think this would lessen your ability to collect damages.

This may make the tenant more inclined to damage the property or not pay last month's rent since it's not they aren't getting any money back anyway. Let big insurance handle it.

Also wonder if landlords would abuse system too since it's not going to get them in trouble with landlord/tenant laws. Tenant doesn't care how much you ask from insurance company.

The only way this idea is profitable is if they don't pay a claim, or very few.

If they do applicant screening, then their approval to underwrite the tenant could act as a screening aid for you. --108.69.xxx.xxx




SD Alternative (by 6x6 [TN]) Posted on: Apr 12, 2021 11:48 AM
Message:

It sounds like too much government involvement once again.

There will be a lot of fine print.

Insurance companies don't do business to loose money.

The government will have there hands in the pot as well.

Slowly taking more control away from LL's. --73.120.xx.xxx



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