New National Consumer Law Center research found security-deposit alternatives can leave renters paying more overall while giving them less protection than a traditional deposit.
Instead of a refundable lump sum, tenants pay monthly or annual fees that help with move-in cash needs but do not count toward any landlord damage claim.
Those products are spreading as renters struggle with upfront lease costs that can include first and last month’s rent plus a typical $800 security deposit, according to Zillow survey data.
Millions of renters already use the services, with NCLC saying they are especially common among large property managers rather than smaller landlords.