Everything you need to know

+ How is Obligo different than a traditional deposit?

With a traditional deposit, the tenant pays a large sum in advance, before there’s any actual reason for charging such an amount. With Obligo, the tenant is only charged if and when the landlord has a claim.

+ How is Obligo similar to a standard deposit?
  • It’s usually the same size
  • It’s as good as cash from the landlord’s perspective
  • It gives the tenant an incentive to take good care of the apartment, because it’s the tenant who is required to pay if there’s a claim.
  • It enjoys the same legal protection. Money should not be claimed for fair wear and tear, and tenants can dispute claims exactly like they would with a cash deposit (e.g. small claims court)
+ When does an Obligo expire?

An obligo expires 30-60 days after the move-out date, to allow sufficient time to assess the condition of the property before deciding on the final claimed amount. To establish the move-out date and to keep it up to date, Obligo relies on data from the Landlord.

+ How do I qualify for an Obligo?

To qualify for an Obligo you need to provide two independent billing methods:

A Credit Card with enough available credit to cover 1/3 of your required deposit. Debit cards are not accepted.

A Bank Account with enough available funds to cover 1/3 of your required deposit. Both checkings and savings accounts are accepted.

Obligo will not charge your billing methods, nor will any amount be locked in any way.

+ What if the terms of the tenancy change?

It’s easy to edit the Obligo’s size, move-in and move-out dates. Some changes, such as an increase in the Obligo’s size, would naturally require the tenant’s consent. Obligo relies on data from the landlord to make sure that the move-out date is up to date.

+ Does Obligo require proof of damage before approving claims?

Obligo plays no role in assessing the claim’s correctness, but we do encourage the landlord and tenant to communicate before any claim is made. Just like a normal deposit, tenants are able to dispute claims according to local laws and practices.

+ How much does an Obligo cost?

Obligo charges a small monthly fee that depends on the tenant’s risk profile, the size of the obligo and other parameters. Giving a $2500 Obligo starts at $9.90 per month.

Typically, tenants are able to save money long term by using Obligo and investing their unlocked deposit money or using it to reduce their student debt / credit card debt

+ How are disputes handled?

If your agent or landlord makes a deduction to your Obligo based on an unreasonable claim, you will be able to dispute it according to local laws and practices, just like you would with a cash deposit. In most states this process is done through a small claims court.

+ Can I use Obligo for my property right now?

Obligo is currently operating in a closed beta program with select landlords, which means it’s not yet possible to freely register as a landlord. We are gradually onboarding more landlords, property management companies and leasing agents. Please contact us to join our waiting list and schedule a demo.

+ What's the benefit for landlords?

Obligo is a very efficient financial product, which makes it very cheap. Landlords typically use Obligo as a concession in order to increase listing appeal, attract tenants and eliminate vacancies faster.

In addition, Obligo saves an incredible amount of deposit related admin!

+ What about Obligo’s credit risk? Who’s underwriting Obligo?

Obligo is audited by Ernst & Young and is backed by strong creditors who provide the credit facilities which backstop the tenants’ obligations as well as ours. Contact Us to learn more about how our landlords are secured.

+ Is Obligo a form of Insurance?

No, Obligo is not an insurance product but rather a credit product. If a landlord makes a claim, a special credit line is used to finance that claim. This means that the landlord gets paid first, while the tenant can pay in installments – similarly to using a credit card.

+ What if the tenant simply can’t pay the claim?

Obligo always pays the landlord in full as soon as the claim is made. The tenant is able to pay in installments. Obligo assumes the credit risk and suffers the loss if the tenant defaults on these installments.

+ My properties are financed. What will my lenders think about Obligo?

With vacancies and concessions at an all time high and expected to rise further throughout 2018-19, the primary concern of multi-family lenders is your asset’s health. Using Obligo helps drive vacancies and rent concessions downs while driving the rent roll and NOI up. This makes your asset more healthy which is great for your lenders.

Driving all of these factors also increases your property’s valuation, enabling you to get more financing out of it. This increases the overall demand for debt in the market, which is good for your lenders as well.

It’s true that some lenders enjoy a small benefit from keeping cash deposits, but this benefit is tiny in comparison to the yield from the financing itself. The loss of this insignificant benefit is far outweighed by the advantages of healthier assets and increased demand for debt.