Atlanta “Renter’s Choice” Law: What the Security Deposit Bill Means for Multifamily

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On October 5, 2020, the Atlanta City Council unanimously approved a new city bill that allows renters to buy rental security insurance in lieu of paying a deposit. The Atlanta ordinance is the latest in a rising tide of security deposit legislation sweeping the US, as legislators and apartment operators work to address rental housing affordability.

So, what are the regulations of the Atlanta “renter’s choice” law, and what does it mean for the apartment housing industry?


The Letter of the Law: Atlanta Security Deposit Regulation

Atlanta’s new ordinance (which can be found here) outlines that upon a renter’s request, landlords with more than 10 rental units who require a security deposit over 60% percent of the monthly rent must accept one of the two following options instead of a deposit:

  • Rental security insurance, or
  • Payment of the deposit in at least 3 monthly installments

The bill’s additional provisions include:

  • Prior to entering a rental agreement, a landlord will provide the resident written notice of the available alternatives.
  • This does not apply to a “unit hold deposit” that is placed over 60 days before rental period begins.
  • This does not limit a landlord’s ability to require standard credit, income or other qualification checks.

(See ordinance for a complete list of provisions)

How Does the New Deposit Law Affect Atlanta Operators?

Under this updated legislation, multifamily apartment owners and property management companies in Atlanta who collect a security deposit over 60% of the monthly rental rate now need to ensure that they:

1) accept rental insurance or a deposit payment plan in at least 3 month installments
2) provide written notice of these options to renters before entering a lease

3 Challenges Created by the Atlanta Deposit Law

As with any security deposit regulation, the Atlanta deposit law creates challenges for apartment owners and operators, including leasing delays, additional work for onsite teams, and increased risk exposure.

1. Leasing Delays
Operators must inform residents of the deposit alternatives available to them, and the notice must be in written form prior to lease signing. Additionally, renters can shop these options before presenting them to the property for approval. These two variables have the potential to slow down leasing activity.

2. More Work for Onsite Teams
Properties must keep track of multiple insurance providers and plans, while still managing security deposit accounting. This means that leasing agents must be educated on policies that are accepted by the property management company. Onsite teams will also be tasked with tracking deposit installment payments for renters who choose to go that route.

3. Increased Risk
With security deposit installment plans, the property is left exposed if the renter defaults prior to having paid the full deposit amount.

Deposit Laws Are Accelerating Nationwide

The multifamily industry is familiar with deposit restrictions which dictate the maximum deposit amount and the number of days to return a deposit. But in the last year, multifamily has begun moving away from deposits entirely.


Approximately one-third of US states have passed, proposed, or pledged support for deposit replacement laws including California, Delaware, Florida, Michigan, North Carolina, Ohio, Pennsylvania, and Virginia. At the local level, cities including Cincinnati, Columbus, Philadelphia, New York City, and Santa Cruz have also followed suit — and now Atlanta as well.

Deposit replacement laws take deposit legislation one step farther by moving apartment operators toward complete deposit replacement solutions, rather than merely tightening deposit regulations.

To view the list of state and city deposit restrictions and deposit replacement laws, visit our Deposit Replacement Law Tracker.


Operators Seeking Deposit Solutions in Light of Atlanta Renter’s Choice Bill

As the industry accelerates toward total deposit replacement, apartment owners and operators are increasingly seeking out deposit solutions that specifically address the additional administrative burdens on leasing and accounting teams, increased risk exposure, leasing delays, and more complex compliance issues. Deposit solutions on the market today come in the form of deposit replacements and deposit alternatives.

What Is a Security Deposit Alternative?

Security deposit alternatives — like surety bonds — can address the legal requirements of these new deposit laws, but they also create operational complexity. Deposit alternatives generally require onsite training, third-party applications, background checks and/or FICO scores, and out-of-workflow management. This means that traditional security deposits are still in place, and therefore still subject to the legal restrictions and administration.

What Is a Security Deposit Replacement?

Security deposit replacements — like lease insurance — enable operators to replace deposits entirely. Lease insurance is also based on deep property system integration, which eliminates administrative hassles and provides increased protection for rent and damages. As a result, operators who replace deposits entirely are not subject to the legal requirement of laws like the Atlanta security deposit legislation. And unlike deposit alternatives (e.g. bonds), which typically cover up to the deposit amount, lease insurance multiplies coverage for the property owner.

What Top Operators Are Saying About Deposit Laws

Traditional security deposits are outdated, and the multifamily industry recognizes the need to move away from surety bonds. Several leading operators have emphasized the importance of this movement towards total deposit replacement, including Kelli Jo Norris – President of Goodman Real Estate, Michael Roos – Managing Director of Asset Management at ColRich, and Kevin Huss – Vice President of Revenue Management at Harbor Group.


How to Avoid the Ever-Changing Landscape of Deposit Legislation

So long as operators rely on security deposits and deposit alternatives, they will continue to be subject to the inherent variability of deposit legislation. But when operators choose to implement lease insurance software that automates deposits out of leasing altogether, they can avoid the legal requirements of the new Atlanta deposit law and several related laws to come.

Atlanta Security Deposit Law Webinar

LeaseLock recently held an educational webinar reviewing the Atlanta deposit bill, led by our very own Reichen Kuhl – President & Chief of Legal, Ed Wolff – Chief Revenue Officer, and Michelle Roberts – VP of Enterprise Sales for the Southeast.


Fill out the form below to watch the webinar recording and learn about:

  • Key details outlining the new city bill
  • Cities that have passed similar ordinances
  • Options available to replace security deposits for your residents
  • What this legislation means for you and what’s required to be compliant

Get the Full Webinar Recording

Learn all about the new Atlanta deposit law