The City of Atlanta recently adopted a new ordinance – called by some “Renter’s Choice” – requiring landlords, in certain circumstance, to provide residential tenants with choices about how they pay security deposits.
The stated purpose of the new ordinance includes establishing the “rights and obligations of the landlord and the tenant in the rental of dwelling units in the City.” Hence, the ordinance is applicable to certain residential leases but does not apply to commercial leases.
In addition to only being applicable to residential leases, the new ordinance also only applies (1) to landlords who “own and/or control” more than ten rental units, and (2) in cases where the required security deposit is more than sixty percent of the monthly rent. In such cases, the “Renter’s Choice” ordinance requires that landlords give tenants the choice of paying their required security deposit in three monthly installments or through the purchase of approved third-party rental security insurance, as opposed to the usual lump sum payment of the entire required security deposit at the outset of a new lease.
Under the new ordinance, landlords are required to provide prospective tenants with written notice of the available choices for payment of security deposits before entering into a lease. There are no stated penalties in the new ordinance for landlords who fail to comply with its requirements and the ordinance does not address existing leases where tenants have already made security deposits.
Residential apartment owners and property management companies should update their policies and revise their lease forms to reflect the requirements tied to the new ordinance.