Landlords Alternative
Stop loosing on security deposits, earn instead.
All are winners
This actually works better for everyone in the equation. For the landlord, the program turns a cost center into a Profit Center. The tenant does not have to outlay cash for a security deposit.
About program:
First Fidelity Brokerage, Inc has been selected as a distributor for an exclusive new security deposit default insurance program L.A.T.S. The program allows the landlord to aggregate the risk associated with tenant default (lost rent, damages, legal expenses) to create a new profit center for landlords from what has historically been a cost center.
This is not a surety based or indemnity based program, this is an insurance policy tailored to each owner’s portfolio. The program provides an innovative approach to pre-fund by the landlord potential losses arising out of tenant lease defaults and to the extent it is not used to pay claims, the amount remaining in the loss fund is returned to the owner.
How does it work?
With LATS, owner transfers risk to insurance company and no longer deals with security deposits, at all. Compare this to a when a traditional security deposit is taken from a specific tenant, upon disposition of the lease one of three scenarios can occur:
- Tenant has no loses, security deposit is returned (adminexpenses)
- Partial loss (minor damage), part of security deposit is returned (with adminexpenses)
- Loss exceeds security deposit, security deposit is not sufficient to cover loss and possible Attorney General involvement for not returning the security deposit.t
Benefits:
Some of the benefits include:
- Reduce Administrative Costs
- Keep 100% of Unused Premiums
- No tenant privity to Contract
- Innovative Captive Structure
- Immediate Claims Payment
- No Tail / Post Liabilities
- Potential Tax Advantages
- Owner Controlled
- Control of Claims Process
- Funding for Catastrophic Claims
- Monies are all held by the Owner
Eligibility:
Alternative Security Deposit Default Insurance is also available for Student Housing and owners of Commercial properties.
- 300 units+
- Currently taking some type of security from tenants
- Currently tracks damages and loss or rents
- Occupancy rate not less than 92%
- Standard lease agreement used for all tenants
- Acceptance to program is NOT guaranteed and is subject to underwriting