Cincinnati Renters Choice
The City of Cincinnati has passed new legislation regarding the newly minted term "Renters Choice." The law purports to lower the financial threshold to housing, making it easier for renters to access better housing options. The link to the Cincinnati Enquirer Editorial article covers the details pretty well. This will go into effect approximately mid-April 2020. A copy of the final version of the language is here.
Over the past several months there have been multiple versions of this bill, with the first giving a single company a mandated monopoly. The association repeatedly stated opposition to the bill, even meeting with the Enquirer Editorial Board. Numerous changes were included to improve the bill, including several exemptions. There has been no hew and cry for a resolution to security deposits, instead it has been a manufactured problem with a solution that places some owners at increased risk. Ideally, the law minimizes who is at risk, but it still places owners at risk with additional regulation and private enforcement.
In short, if you own or control more than 25 rental units in the City of Cincinnati, and require a security deposit greater than 50% of the 1st month’s rent, then you need to provide one or more options for your customers to choose between paying the deposit upfront or:
1. Paying over a 6-month installment period.
2. Partnering with a 3rd party vendor to provide an insurance or bond alternative – that meets your criteria.
As this was a straightforward bill, there are no additional regulations planned. To be clear there are 2 key exemptions from having to provide one of the alternatives:
1. Owning or controlling less than 25 rental units. The intent was to exempt small owners who are typically not as sophisticated. Please be cautious about considering the exemption for 2 separate 24-unit buildings with different ownership interests within the LLC…
2. Charging a Security Deposit that is less than 50% of the 1st month’s rent excludes the property/owner from providing any other exemption.
A few additional considerations:
1. This is only for properties within the City of Cincinnati proper.
2. It will go into effect in Mid-April, 2020.
3. There is no restriction from adding fees to the process or alternative.
4. If the property/owner charges more than 50% of the first month’s rent as a Security Deposit they must offer at least 1 alternative. More can be offered.
Additional comments will be added to the Legislative page as new considerations are raised.