LEASE GUARANTY BUSINESS MODEL

• US 20090292655A1
• Filed: 12/18/2008
• Published: 11/26/2009
• Est. Priority Date: 10/15/2003
• Status: Abandoned Application

• Current Assignee: RS Reinsurance (Bermuda) Ltd.
• Original Assignee: RS Reinsurance (Bermuda) Ltd.
• Inventors: GELLER, Jeffrey, SCHACK, Paul C., O'CONNELL, Richard S., ROSENBERG, Robert M.
• Application Number:
  US12/338,776
• Publication Number:
  US 20090292655A1
• Time in Patent Office: Days
• US Class Current: 705/500
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 99/00 Subject matter not provided for in other groups of this subclass

Abstract

Methods are provided for lease guaranty services. A landlord enters into an arrangement with a lease guaranty service provider including an agreed upon lease guaranty policy to cover a rental property associated with the landlord. Under the lease guaranty policy, the landlord is a beneficiary and is bound to some contractual duties. A tenant, interested in renting the rental property, enters into a lease guaranty participation agreement with the lease guaranty service provider, which provides that the lease guaranty service provider pays the landlord a claim amount, resulted from the tenant'"'"'s failure to comply with a lease signed between the tenant and the landlord for the rental property, and the tenant is legally liable to the lease guaranty service provider.

Claims

1. A method, comprising:

entering an agreement between a landlord and a lease guaranty service provider, for a lease guaranty policy covering a rental property associated with the landlord, wherein the landlord is a beneficiary and is bound to at least one contractual duty under the lease guaranty policy;

applying, by a tenant, for a lease guaranty participation agreement with the lease guaranty service provider with respect to the rental property;

processing the tenant'"'"'s lease guaranty participation agreement application; and

entering, between the lease guaranty service provider and the tenant, the lease guaranty participation agreement with respect to the rental property if the tenant'"'"'s lease guaranty participation agreement application is approved, wherein

the lease guaranty participation agreement provides that the lease guaranty service provider, after receiving a valid claim from the landlord filed under the lease guaranty policy, pays the landlord a claim amount, resulting from the tenant'"'"'s failure to comply with a lease signed between the tenant and the landlord with respect to the rental property, and the tenant is legally liable to the lease guaranty service provider.

2. The method according to claim 1, wherein said lease guaranty policy can be optionally in a form of a lease surety bond.

3. The method according to claim 1, wherein the lease guaranty policy covering the rental property provides guaranty in terms of at least one of:

monetary damage related to the rental property resulting from the tenant'"'"'s breach of the lease; and

non-monetary damage related to the rental property resulting from the tenant'"'"'s breach of the lease.

4. The method according to claim 3, wherein the monetary damage includes at least one of:

rent associated with the rental property, defined according to a specified unit of period; and

cost to repair property damages made to the rental property by the tenant.

5. The method according to claim 3, wherein the monetary damage is determined according to at least one of:

a court judgment; and

a settlement between the landlord and the tenant approved by the lease guaranty service provider.

6. The method according to claim 3, wherein the non-monetary damage includes finding a new tenant for the rental property when the lease is terminated earlier than an original term specified in the lease.

7. The method according to claim 6, wherein the lease is terminated earlier due to one of:

the tenant'"'"'s earlier abandonment of the rental property;

an eviction of the tenant from the rental property because of the tenant'"'"'s breach of one or more of the lease terms.

8. The method according to claim 1, wherein said entering an agreement comprises:

screening, by the lease guaranty service provider, the landlord; and

approving the landlord'"'"'s request to sign up for the lease guaranty policy, if said screening yields a positive result.

9. The method according to claim 1, further comprising:

applying, by the tenant prior to said applying for the lease guaranty participation agreement, for a lease guaranty pre-authorization with the lease guaranty service provider;

processing, by the lease guaranty service provider, the lease guaranty pre-authorization application; and

identifying, by the tenant, the rental property using a lease guaranty pre-authorization.

10. The method according to claim 9, wherein said processing the lease guaranty pre-authorization application comprises:

checking the credit of the tenant;

accepting the tenant'"'"'s application for the lease guaranty pre-authorization to issue the lease guaranty pre-authorization if said checking yields a positive result.

11. The method according to claim 10, further comprising:

examining the credential of the tenant according to additional criteria if said checking yields a partial positive result; and

accepting the tenant'"'"'s application for the lease guaranty pre-authorization if the tenant satisfies the additional criteria.

12. The method according to claim 10, wherein the additional criteria include:

that the tenant'"'"'s cash reserve exceeds a certain level; and

that the tenant'"'"'s investment portfolio reaches a certain level.

13. The method according to claim 10, further comprising refusing the tenant'"'"'s lease guaranty pre-authorization application if either that the credit check fails or that the tenant does not fully meet the additional criteria.

14. The method according to claim 1, wherein said processing the lease guaranty participation agreement application comprises:

examining, by the lease guaranty service provider, whether the tenant has a valid previously issued lease guaranty pre-authorization;

performing lease guaranty authorization if the tenant does not have a valid previously issued lease guaranty authorization;

verifying information relevant in evaluating the lease guaranty participation agreement application; and

issuing a document certifying the lease guaranty participation agreement if said verification yields a positive result.

15. The method according to claim 14, wherein said performing lease guaranty authorization comprises:

checking the credit of the tenant;

authorizing the lease guaranty authorization application subject to further verification if said checking yields a positive result.

16. The method according to claim 15, further comprising:

examining the credential of the tenant according to additional criteria if said checking yields a partial positive result; and

authorizing the lease guaranty authorization application subject to further verification if the tenant satisfies the additional criteria.

17. The method according to claim 14, wherein the information relevant to the evaluation includes at least one of:

identification of the tenant; and

tenant'"'"'s income;

the address of the rental property; and

rent for the rental property.

18. The method according to claim 1, wherein said entering the lease guaranty participation agreement comprises:

executing the lease guaranty participation agreement prior to, or simultaneous with the execution of the lease; and

signing a lease between the landlord and the tenant for the rental property.

19. The method according to claim 1, further comprising:

submitting, by the landlord after the tenant and the lease guaranty service provider enter into the lease guaranty participation agreement, a claim under the lease guaranty policy with a claim amount if the tenant fails to comply with the lease with respect to the rental property;

processing, by the lease guaranty service provider, the claim in compliance with the lease guaranty policy and the lease guaranty participation agreement.

20. The method according to claim 19, further comprising performing, by the landlord prior to said submitting, the at least one contractual duty that the landlord is bound under the lease guaranty policy.

21. The method according to claim 20, wherein the at least one contractual duty includes at least one of:

sending, by the landlord, a notification to the tenant and the lease guaranty service provider indicating a breach;

initiating an eviction proceeding if the breach persists after the tenant receives the notification; and

determining the claim amount based on one of a court judgment from the eviction proceeding and a settlement agreed between the landlord and the tenant approved by the lease guaranty service provider.

22. The method according to claim 19, wherein said processing the claim comprises:

examining whether the landlord fulfills the at least one contractual duty under the lease guaranty policy;

sending the claim amount to the landlord if the landlord fulfills the at least one contractual duty; and

commencing a collection procedure to collect a collection amount from the tenant, wherein the collection amount is determined based on the claim amount.

23. The method according to claim 22, wherein the collection procedure comprises:

examining whether there is a payment made to the landlord for the rental property after the claim amount is paid to the landlord;

adjusting the collection amount to generate an updated collection amount if the landlord receives a payment for the rental property after the landlord receives the claim amount; and

performing the collection for the updated collection amount.

24. The method according to claim 23, wherein said adjusting comprises:

requesting the landlord to remit the payment amount; and

generating the updated collection amount by subtracting, from the collection amount, the payment amount.

25. The method according to claim 23, wherein said performing the collection comprises:

conducting in-house collection within a pre-determined period; and

delegating a collection agency to continue the collection if the tenant does not pay the collection amount after the pre-determined period.

26. The method according to claim 25, further comprising adjusting the collection amount if the tenant makes a payment to the landlord during said performing the collection.

27. The method according to claim 22, further comprising refusing the claim if the landlord fails to satisfy the conditions that entitle the landlord to the claim under the lease guaranty policy.

28. The method according to claim 1, further comprising entering into a renewed lease guaranty participation agreement between the tenant and the lease guaranty service provider when the lease guaranty participation agreement expires.

29. The method according to claim 28, wherein said entering a renewed lease guaranty participation agreement comprises:

submitting, by the tenant, a renewal application to the lease guaranty service provider;

performing authorization check;

executing the renewed lease guaranty participation agreement between the tenant and the lease guaranty service if the authorization check yields a positive result; and

issuing a document to the tenant and to the landlord certifying that the renewal application is approved.

30. A method for a landlord, comprising:

entering an agreement, with a lease guaranty service provider, for a lease guaranty policy covering a rental property associated with the landlord, wherein the landlord is a beneficiary and is bound to at least one contractual duty under the lease guaranty policy;

entering into a lease with a tenant on the rental property, wherein

the tenant is under a lease guaranty participation agreement with the lease guaranty service provider with respect to the rental property and the lease guaranty participation agreement provides that the lease guaranty service provider, after receiving a valid claim from the landlord filed under the lease guaranty policy, pays the landlord a claim amount, resulting from the tenant'"'"'s failure to comply with the lease for the rental property, and the tenant is legally liable to the lease guaranty service provider.

31. The method according to claim 30, further comprising submitting a claim under the lease guaranty policy with a claim amount when the tenant, after the lease is signed, fails to comply with the lease.

32. The method according claim 31, further comprising performing the at least one contractual duty to which the landlord is bound under the lease guaranty policy prior to said submitting.

33. The method according to claim 32, wherein the at least one contractual duty includes at least one of:

sending a notification to the tenant and the lease guaranty service provider indicating a breach;

initiating an eviction proceeding if the breach persists after the tenant receives the notification; and

determining the claim amount based on one of a court judgment from the eviction proceeding and a settlement agreed between the landlord and the tenant.

34. The method according to claim 31, further comprising receiving the claim amount from the lease guaranty service provider.

35. The method according to claim 34, further comprising receiving a payment for the rental property after the claim amount is received.

36. The method according to claim 35, further comprising receiving a request from the lease guaranty service provider to remit the amount of the payment to the lease guaranty service provider.

37. The method according to claim 36, further comprising remitting the payment amount to the lease guaranty service provider.

38. A method for a tenant, comprising:

applying for a lease guaranty participation agreement with a lease guaranty service provider with respect to a rental property associated with a landlord, wherein the landlord has a lease guaranty policy from the lease guaranty service provider that covers the rental property; and

entering, if the tenant'"'"'s lease guaranty participation agreement application is approved, into the lease guaranty participation agreement with the lease guaranty service provider after the tenant and the landlord sign a lease on the rental property, wherein

the lease guaranty participation agreement provides that the lease guaranty service provider, after receiving a valid claim from the landlord filed under the lease guaranty policy, pays the landlord a claim amount, resulting from the tenant'"'"'s failure to comply with the lease for the rental property, and the tenant is legally liable to the lease guaranty service provider.

39. The method according to claim 38, further comprising:

applying, prior to said applying for the lease guaranty participation agreement, for a lease guaranty pre-authorization from the lease guaranty service provider; and

identifying, after the lease guaranty service provider issues the lease guaranty pre-authorization application, the rental property using the lease guaranty pre-authorization.

40. The method according to claim 38, further comprising receiving a first notification from the landlord indicating a breach of the lease.

41. The method according to claim 40, further comprising receiving a second notification of an eviction proceeding initiated by the landlord after the first notification.

42. The method according to claim 41, further comprising receiving a collection notification to demand a collection amount, wherein the collection amount is determined based on a claim amount that the lease guaranty service provider pays to the landlord under the lease guaranty policy and the claim amount is determined according to one of a judgment from a court and a settlement agreed between the tenant and the landlord.

43. The method according to claim 42, wherein the collection notification is received from one of:

the lease guaranty service provider; and

a collection agency.

44. A method for a lease guaranty service provider, comprising:

receiving a first request from a landlord to sign up for a lease guaranty policy covering a rental property associated with the landlord;

processing the landlord'"'"'s request;

allowing the landlord to sign up for the lease guaranty policy, if the processing yields a positive result, wherein the landlord is a beneficiary and is bound to at least one contractual duty under the lease guaranty policy;

receiving a second request from a tenant to apply for a lease guaranty participation agreement with respect to the rental property; and

entering the lease guaranty participation agreement with the tenant when the tenant'"'"'s lease guaranty participation agreement application is approved, wherein

the lease guaranty participation agreement provides that the lease guaranty service provider, after receiving a valid claim from the landlord filed under the lease guaranty policy, pays the landlord a claim amount, resulting from the tenant'"'"'s failure to comply with a lease for the rental property signed between the landlord and the tenant, and the tenant is legally liable to the lease guaranty service provider.

45. The method according to claim 44, wherein said processing comprises:

screening, upon receiving the first request, the landlord with respect to the rental property; and

approving the first request of the landlord for signing up for the lease guaranty policy.

46. The method according to claim 45, further comprising:

receiving an application, from the tenant prior to the tenant'"'"'s application for the lease guaranty participation agreement, for a lease guaranty pre-authorization with the lease guaranty service provider;

processing the lease guaranty pre-authorization application; and

issuing the lease guaranty pre-authorization to the tenant if said processing yields a positive result.

47. The method according to claim 45, wherein said entering the lease guaranty participation agreement comprises:

performing lease guaranty pre-authorization if the tenant does not have a valid previously issued lease guaranty pre-authorization;

verifying information relevant to the evaluation of the lease guaranty participation agreement application;

issuing a document certifying the lease guaranty participation agreement if said verification yields a positive result;

signing the lease between the landlord and the tenant for the rental property; and

executing the lease guaranty participation agreement prior to, simultaneous, or after the lease is signed.

48. The method according to claim 47, wherein the information relevant to the evaluation includes at least one of:

identification of the tenant; and

tenant'"'"'s income;

the address of the rental property; and

rent for the rental property.

49. The method according to claim 45, further comprising:

receiving a claim with a claim amount, submitted by the landlord under the lease guaranty policy after the tenant fails to comply with the lease after the tenant and the lease guaranty service provider enter into the lease guaranty participation agreement;

processing the claim in compliance with the lease guaranty policy and the lease guaranty participation agreement.

50. The method according to claim 49, wherein said processing the claim comprises:

examining whether the landlord fulfilled the at least one contractual duty;

sending the claim amount to the landlord if the landlord fulfilled the at least one contractual duty; and

commencing a collection procedure under the lease guaranty participation agreement to collect a collection amount from the tenant, wherein the collection amount is determined based on the claim amount.

51. The method according to claim 50, wherein the collection procedure comprises:

examining whether there is a payment made to the landlord for the rental property after the claim amount is paid to the landlord;

adjusting the collection amount to generate an updated collection amount if the landlord receives the payment for the rental property after the landlord receives the claim amount; and

performing collection for the updated collection amount.

52. The method according to claim 51, wherein said adjusting comprises:

requesting the landlord to remit the amount of the payment; and

generating the updated collection amount by subtracting, from the collection amount, the payment amount.

53. The method according to claim 51, wherein said performing collection comprises:

conducting in-house collection within a pre-determined period; and

delegating a collection agency to continue the collection if the tenant fails to pay the lease guaranty service provider for the collection amount after the pre-determined period.

54. The method according to claim 53, further comprising adjusting the collection amount if the tenant makes a payment to the landlord during said performing collection.

55. The method according to claim 45, further comprising entering a renewed lease guaranty participation agreement between the tenant and the lease guaranty service provider after the lease guaranty participation agreement expires.

56. The method according to claim 55, wherein said entering a renewed lease guaranty participation agreement comprises:

receiving a renewal application from the tenant;

verifying information used to evaluate the renewal application;

performing authorization check;

executing the renewed lease guaranty participation agreement between the tenant and the lease guaranty service provider if said authorization check yields a positive result; and

issuing a document to the tenant and to the landlord certifying that the renewal application is approved.

57. A framework, comprising:

a landlord having a rental property;

a tenant seeking to rent the rental property; and

a lease guaranty service provider, offering lease guaranty services, wherein

the landlord signs up with the lease guaranty service provider for a lease guaranty policy covering the rental property, under which the landlord is a beneficiary and is bound to at least one contractual duty, and

the tenant enters a lease guaranty participation agreement with the lease guaranty service provider with respect to the rental property, which provides that the lease guaranty service provider, after receiving a valid claim from the landlord filed under the lease guaranty policy, pays the landlord a claim amount, resulting from the tenant'"'"'s failure to comply with a lease signed between the tenant and the landlord for the rental property, and the tenant is legally liable to the lease guaranty service provider.

58. The framework according to claim 57, further comprising at least one of:

a credit agency capable of providing credit information to the lease guaranty service provider; and

a public information source capable of providing information useful in screening the landlord.