Real Estate Investors Association of Greater Cincinnati

Legislation and Government Affairs Updates:

Investors know that legislation and government are key components to growing your real estate business. It is for this reason that REIAGC works daily to bring information on key issues that may affect you. The information on this page is for education only and is not to be construed as legal advice. 

New Legislation Will Benefit Private Firm,
Won’t Really Help Tenants

Cincinnati Councilmember PG Sittenfeld’s proposal to mandate an insurance product instead of a security deposits was intended to help people who don’t have cash for a deposit. However, in the end, it will simply send business to a private company selling an untested product. And most importantly, the tenants who need the most help likely won’t get it. What’s needed is a pilot program to see whether this approach works or not.

“The legislation was inspired by a housing policy plan proposed by Rhino, a tech startup tackling the housing affordability crisis.”

This quote is from Rhino’s public relations firm announcing Sittenfeld’s proposal. It’s pretty clear that the “tech firm” has had a hand in creating this new mandate. Property owners will be required to offer insurance that meets these criteria:

  1. It must have a monthly payment option. Of 4 insurers we found who offer some sort of lower-cost insurance or bond for rental deposits, only 2, including Rhino, offered this option.
  2. It must guarantee to settle any damage claims with the property owner within 48 hours. Of the 4 insurer websites we reviewed, only 1—Rhino—assures this service.
  3. The proposed ordinance requires that property owners designate insurance providers for tenants. The ability to shop for the best rates and services will not be left up to the tenants.
  4. Rhino is apparently one of only four companies that meet the full requirements of the law it’s likely they will benefit the most from legislation.

Does the City of Cincinnati want a tech startup dictating housing policy?

The New Law Won’t Help Tenants, Could Expose Them to Legal Action

Rhino and other companies won’t automatically approve tenants for insurance, they require credit cards, credit checks, and other requirements that the tenants who struggle the most with housing simply don’t have.

  1. Tenants MUST have a credit or debit card. Many lower income tenants do not have credit cards or bank accounts.
  2. The premium payments do not end at the end of the first year.
  3. Tenants must pay it for the length of their tenancy.
  1. A tenant who stays in the same house for 5 years—ideal, from the perspective of stability—could end up paying most of a normal deposit without getting their money back.
  2. If AT ANY TIME, tenants don’t pay the monthly premium, Rhino sends the full deposit, in cash, to the landlord, then “goes after the tenant” for the deposit. A tenant could pay for 23 months, stop, and Rhino will sue them, resulting in harm to their credit.

And here's the real kicker--even with the premiums paid fully up to date, tenants are still on the hook for the full deposit, should a claim be made!

Rhino representatives have confirmed that when a claim is made, it's paid to the landlord, and then the tenants are billed for the claim.

If they can't pay the full amount, they're offered a payment plan (apparently with attendant fees and interest), and if they don't make the payment, they're sent to collections, further damaging their credit, adding even more cost to the "deposit", and undoubtedly causing additional stress, both financial and emotional.

In other words, many tenants will end up worse off, by every measure, with the insurance than without it--and you'll be forced to market it to them if this law passes.

 Let’s Find Out if Insurance Really Works Before We Require It

Property owners and managers are willing to try this product out to see if it works for them and for their customers. But why force a tech company’s untested product on people who are struggling to find housing in our community. The answer is to allow more housing and encourage new ideas, not force people to buy something from an out-of-state tech company.

This ordinance is being discussed at a Cincinnati City Council meeting on Tuesday, December 2nd 2019 at 2 p.m. The details and location are here; please be there to make your voice heard on this important issue!

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