DE HB349

Allows landlords to offer tenants the option to pay a recurring monthly fee in lieu of a security deposit, enabling tenants without upfront capital to secure housing.

Requires landlords offering this option to one tenant in a multi-unit property to offer it to all new tenants, and prohibits using a tenant's choice to pay the fee as a criterion for lease approval.

Mandates landlords use collected fees to purchase insurance coverage for landlord losses from unpaid rent, fees, or damages exceeding normal wear and tear, with fees capped at the cost of obtaining and administering such insurance.

Establishes comprehensive disclosure requirements informing tenants they can terminate the fee arrangement at any time and switch to a traditional security deposit, and clarifying tenants remain liable for all lease obligations.

Imposes 60-day waiting periods before collection activities, requires itemized damage documentation within 20 days of lease termination, and provides tenants the right to dispute damage claims under the same standards as traditional security deposits.