“This was one small thing we could do to make it less costly to get into an apartment,” Farokhi said. “At no risk to anyone.”
In crafting the legislation, Farokhi said, he included input from the Atlanta Apartment Association, which is OK with the measure because landlords are still awarded protections. Under rental deposit insurance, tenants pay a monthly premium to an outside insurance carrier, which would then pay the landlord in case of a loss.
There are some caveats to Atlanta’s new law: It only applies to landlords who rent out more than 10 units and require a security deposit that’s more than 60% of the monthly rent.
Right now, the ordinance has no penalties for landlords who do not allow their tenants to pay their security deposits through the alternate methods. But if that becomes an problem, the council may amend the ordinance, Farokhi said.
“If we need to go back to put more teeth into it, we can always do that,” he said.
City Attorney Nina Hickson said during a council committee meeting that the law department would be prepared to defend the new ordinance against any potential legal challenges. The City Council unanimously passed the measure last week.