Have you ever paid a hefty security deposit when moving into a new home? Has a security deposit requirement ever kept you from moving in? If so, then Renter’s Choice will likely improve your experience as a renter in America. The Renter's Choice movement advocates for replacing the cash security deposit with a new low-cost standard, security deposit insurance, which will both impact how renters live and how landlords operate.                                                                                                                                              

What is Renter’s Choice? 

Renter’s Choice is legislation that, when signed into law, decreases upfront costs and provides options for renters when they move into a new home by requiring that landlords offer new, affordable security deposit alternatives.

The Renter’s Choice movement is gaining momentum and Renter’s Choice legislation is being passed by cities nationwide. In January 2020, Cincinnati, OH became the first city in the United States to pass this legislation. Since then, similar legislation has passed in cities including Atlanta, GA.

Let’s break it down to understand exactly what a Renter’s Choice law means for renters, landlords, and cities.

What is a Renter’s Choice Law?

Under Renter’s Choice laws, landlords are required to offer renters alternative options to the cash deposit, such as an installment plan or security deposit insurance. Renter’s Choice laws are slightly different in each city, but Renter’s Choice generally contain some of the requirements listed below:

Landlords are required to choose one of these options to offer their renters to replace cash security deposits

  • Option 1: Landlords still collect a security deposit from renters, but the dollar amount is required to be less than it was before passage, for example, no more than 60% of one month’s rent.

  • Option 2: Landlords will let you pay your security deposit in monthly installments.

  • Option 3: Landlords will offer you security deposit insurance like Rhino’s. Deposit alternatives use insurance agreements to replace your security deposit and save you money at move-in. 

How does Renter’s Choice legislation affect renters and communities?

Regardless of which option a landlord chooses to offer, the main benefit for renters is lower upfront move-in costs. Since each option is a little different for the renter, let’s break the effects down further. 

  • Reduced deposit option: Renters will still submit a security deposit upfront at move-in, but the amount will be significantly less.

  • Deposit installment option: Renters will pay a portion of their security deposit once per month alongside their monthly rent payments. 

  • Security deposit alternative option: Renters will sign up for an insurance product like Rhino’s security deposit insurance to replace their security deposit entirely. Renters pay Rhino or another service a small non-refundable monthly fee that can be as low as $4 over the duration of their lease (5-12/month on average).

Renters who sign up for security deposit insurance are still financially responsible for unpaid rent and excessive damage to their apartment. 

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If one of these incidents does happen, renters will have to repay the security deposit alternative provider for the amount of damage they do or the amount of rent they missed. However, renters will still have all of the protections that come with regulated insurance products. That includes regulated commissioners, mandatory disclosures, licensed claims adjusters. Renters still keep many of the same rights as they would with a security deposit when choosing security deposit insurance.

How does Renter’s Choice legislation affect landlords?

Before Renter’s Choice passage, landlords had two options: 

  • Collect a cash security deposit from renters that costs as much as a few thousand dollars. Landlords would have to adhere to local regulations around how much they could collect for a security deposit as well as how quickly the deposit must be returned at move-out.

  • Offer renters a security deposit alternative instead of collecting a cash deposit.

Renter’s Choice requires landlords to standardize their deposit process and choose one of the three options at the beginning of this post (reduced deposit, installments, deposit alternative) that works best for their communities.  

If a landlord chooses to offer a security deposit alternative they are also subject to laws that govern regulated insurance products. When working with Rhino, they must submit all claims through our in-house licensed claims adjuster team.

Quote graphic from a landlord that reads "Rhino

How does Renter’s Choice legislation affect cities?

Renter’s Choice makes cities more affordable. It does this by providing access to installment plans or security deposit alternatives that lower upfront moving costs for renters who need access to stable housing and want to keep and spend their cash locally. 

Security deposit alternatives are already being offered in major cities and cities where Renter’s Choice has passed like Atlanta and Cincinnati, unlocking millions for local economies. Installment plans grew in popularity as a way to protect renters’ cash at the beginning of the COVID-19 pandemic and security deposit alternatives have also been present in each city for the past three years. 

Security deposit alternatives specifically also have the potential to unlock $45 billion in locked up deposits around the country, creating a “stimulus” for renters who need immediate cash flow.

Renter’s Choice was formed in direct response to the rapidly changing housing crisis to advocate for already popular security deposit alternatives. By changing the security deposit requirements in America’s cities, landlords will be able to give renters more access to stable homes and more control of their finances during the moving process.

Learn more about Renter’s Choice by visiting their homepage.  

Larenz Brown

Larenz Brown is a copywriter at Rhino who wants to tell stories that empower people. He once engaged in a 365-day staredown with a security deposit and emerged victorious.