Terms of Service

Terms Of Service Agreement for Lighthouse Security Deposit Alternative

LIGHTHOUSE IS NOT AN INSURANCE PRODUCT. THE LETTER OF CREDIT DESCRIBED IN THIS AGREEMENT IS GUARANTEED BY YOU FOR THE BENEFIT OF YOUR LANDLORD ONLY AND DOES NOT APPLY TO YOU (TENANT). THE FEE YOU PAY IS NOT A SECURITY DEPOSIT AND WILL NOT BE REFUNDED TO YOU. IF LIGHTHOUSE PAYS A REIMBURSEMENT REQUEST TO THE LANDLORD, YOU MUST REIMBURSE LIGHTHOUSE FOR THE FULL AMOUNT OF THE REIMBURSEMENT. 

THIS PROGRAM IS OPTIONAL. YOU MAY PROVIDE A SECURITY DEPOSIT INSTEAD.

Welcome to Lighthouse Security Deposit Alternative! Below you will find the Terms of service (“Terms”) for our Letter of Credit (LOC) offering. It is important that you read and understand these terms before enrolling in our program. Please note that this service is an alternative to traditional security deposit methods and is not an insurance product.

1. Overview

This document outlines the agreement (“Agreement”) between you (“Tenant”) and My Lighthouse (“Administrator”, “we”, “us”, “our”) concerning the issuance of a Letter of Credit (LOC) as an alternative to a traditional security deposit. The LOC is intended solely for the benefit of your landlord (“Landlord”) and covers certain obligations under your lease agreement (“Lease”). This Agreement is made and entered into on the Effective Date. It applies solely to the Tenant And corresponding Lease Agreement (“Lease”)  entered into with the Landlord. On the basis of the acknowledgements and agreements contained herein, and Tenant payment of a non-refundable Issuing Fee, Tenant has been issued an LOC by the Administrator pursuant to the LOC referenced above.

2. Acknowledgment and Acceptance of Terms

By purchasing the LOC from Lighthouse, you acknowledge and agree to the following:

• Non-Insurance: The LOC is not an insurance product and does not cover personal property losses or damages.
• Non-Refundable Fee: The fee you pay for the LOC is non-refundable and is not a security deposit.
• Reimbursement Obligation: Should the Landlord make a claim that is paid by Lighthouse, you are obligated to reimburse Lighthouse in full for such amounts.
• Voluntary Participation: Participation in this program is optional, and you may elect to provide a traditional security deposit instead.

1. Tenant is participating in the Letter of Credit under this Agreement and committing to perform their obligations hereunder including the payment of the non-refundable Issuing Fee described below, so that the Administrator will issue a LOC for the benefit of the Landlord.

2. The LOC issued by the Administrator is not for Tenant’s benefit nor is it renters insurance of any kind intended to cover losses to Tenant’s personal property.

3. The opportunity to purchase this Letter of Credit was not mandatory, nor was it represented by anyone to Tenant to be mandatory. It was offered in addition to or in lieu of Tenant posting a Security Deposit or other upfront cash payments to the Landlord.

4. The payment of the Issuing Fee under this Agreement is not a security deposit and Tenant will not receive these funds back after the expiration date.

5. The issuance of this LOC to the Tenant pursuant to the terms under this Agreement:5.1. will not under any circumstance relieve Tenant’s obligation to pay rent for the Rental Property or of any other obligation under the Lease Agreement;5.2. will not add the Administrator, its agents, representatives, or designees, as a guarantor or co-signer for Tenant on the Lease Agreement between Tenant and Landlord; and 5.3. will not protect Tenant from, or prevent, an eviction if Tenant does not pay rent or comply with any other obligations under the Lease Agreement.

6. Except as expressly set forth in this Agreement, nothing contained herein is intended to confer upon Tenant or any third persons (other than the Landlord) any rights, benefits, funds, standing, capacity or remedies under, or in respect of, or pursuant to the LOC and nothing in this Agreement is intended to relieve or discharge Tenant or any third persons of obligations or liability due or owing to the Landlord or the Administrator, nor shall the issuance of this LOC and Tenant’s participation, agreement and acknowledgement under this Agreement confer any standing or capacity to Tenant under or with respect to the LOC.

7. The failure on the Tenant’s part to pay money that they owe to the Administrator as a result of Tenant’s obligations under this Agreement (including, specifically, pursuant to Section B.4.) may result in: (a) Tenant credit being adversely impacted; (b) it being difficult for Tenant to rent other property(ies); and (c) leading to higher fees generally when Tenant looks to secure other financial products of any kind.

8. In relation to the provision of a Letter of Credit (LOC) to the Tenant, the Administrator will assess Tenant credit report or utilize a credit-based risk score based on information within that report. This risk score employs data from Tenant credit reports to anticipate the frequency and cost of potential incidents. Typical items from a credit report that could affect a score include, but are not limited to, the following: payment history, number of revolving accounts, number of new accounts, the presence of collection accounts, bankruptcies, and foreclosures. The information used to develop this score may come from Equifax or TransUnion.

9. By signing this Agreement, Tenant will hereby: (a) authorize My Lighthouse to charge Tenant by making a one-time charge or recurring automatic charges in accordance with this Agreement from the credit card, debit card, checking account, or savings account that Tenant have specified to My Lighthouse; (b) acknowledge that this authorization will remain in effect until this Agreement is terminated; (c) acknowledge that Tenant can revoke this authorization by calling My Lighthouse at (818) 401‐3300 or mailing My Lighthouse at 1644 Pacific Palisades, CA 90272; (d) acknowledge that Tenant can stop payment on a specific automatic withdrawal, without having to revoke this consent, by calling or mailing My Lighthouse at the number or address noted above no less than three (3) business days before the automatic withdrawal date; and (e) acknowledge that if Tenant fails to make payment after revoking this authorization or stopping payment, Tenant fee payment may become past due, potentially resulting in additional fees and/or loss of coverage.

3. Payment Obligations

3.1. By purchasing the LOC identified in this Agreement and making an initial payment, of the Issuing Fee, Administrator will issue to Tenant an LOC for the benefit of the Landlord and the Landlord will be entitled, as the LOC Holder, to the Credit Amount set forth above through the end of my coverage period. Unless the LOC is canceled or terminated in accordance with its terms, the LOC will remain in force until it expires in the ordinary course at the end of my coverage period (“Expiration Date”).

3.2. Tenant understands and expressly and voluntarily acknowledges and agrees:

3.2.1. The payment of the Issuing Fee must be paid in full up front, and is non-refundable after fourteen (14) calendar days following the Effective Date.

3.2.2. The payment of the Issuing Fee is not under any circumstances a payment or consideration of any kind to the Landlord, nor shall it be considered a payment of rent. No compensation of any kind from the Administrator, its agent, representative or designee, or the Tenant, shall be due to the Landlord with respect to the payment of the Issuing Fee.

3.2.3. Tenant may cancel the LOC identified in this Agreement for a full refund,excluding processing fees, by notice provided to the Administrator prior to the Effective Date, or a prorated refund, excluding processing fees, by notice provided to the Administrator within fourteen (14) calendar days of the Effective Date, provided that such notice of cancellation is submitted in writing to the Landlord, and provided that my Landlord acknowledges and approves the cancellation in writing.

3.2.4. If Tenant renews or extends Lease with the Landlord, this LOC will automatically renew and the payment of the Issuing Fee, will continue. If Tenant renews or extends  lease with the Landlord, and fail to renew Tenant’s coverage under Administrator, Tenant understands coverage will be terminated unless Administrator receives Tenant’s  renewed Issuing Fee within 30 calendar days following the Expiration Date, as well as a Reinstatement Fee of no more than $25.00. If Tenant chooses not to accept the LOC renewal offer, Tenant  understands they  may be required to provide Landlord with an equivalent cash security deposit in order to maintain compliance with Tenant’s Lease Agreement.

3.2.5. If the payment Tenant’s Issuing Fee is wrongfully disputed, Tenant  will have thirty(30) calendar days to notify the Administrator and resolve the dispute with Tenant’s financial institution before coverage is terminated. A one-time Dispute Resolution Service Fee of no more than $50.00 will be added to Tenant’s account and must also be paid within thirty (30) calendar days before coverage may be reinstated.Failure to resolve disputes within this timeframe may result in coverage being Terminated.

4. Billing Authorization Service

Landlords traditionally require Security Deposits to keep tenants accountable and to protect themselves from instances of property damages, missed rent, and other contingencies that may be caused by tenants. The Billing Authorization Service achieves a similar purpose, without requiring a Holding Deposit and/or Security Deposit by Tenant. Landlord may accept the Billing Authorization Service in lieu of a Holding Deposit and/or Security Deposit, in part or in full, because Lighthouse agrees to acquire any obligations you owe in relation to Permitted Charges prior to any delinquency. By signing-up for Lighthouse’s Billing Authorization Service, you acknowledge that any Permitted Claim made by the Landlord which meets the conditions of the Billing Authorization Service is owed by you to Lighthouse. You authorize Lighthouse to charge your preauthorized payment methods in order to satisfy Permitted Claims. You also acknowledge and accept that any outstanding balance can be collected by Lighthouse, on its own behalf, using any legal means, including but not limited to charging your preauthorized payment methods, litigation, and/or utilizing 3rd party collection agencies, etc.

4.1. Billing Authorization Application

Lighthouse requires, and you agree to provide, the following in consideration of your application for the Billing Authorization Service:

• All data you provided, or was obtained about you through the use of Lighthouse’s LOC
• Your consent to perform a background and credit check on you. All such checks will be performed in compliance with the Fair Credit Reporting Act (FCRA).
• Preauthorization to charge one or more payment methods.
• Credit card and bank account statements, including online and ongoing Open Banking Access.
• Any other data or payment as described on the Lighthouse Platform.
• Similar data may be required for any additional payors or guarantors that you nominate.

Lighthouse has the right to deny your application and prevent you from using the Billing Authorization Service in its sole and absolute discretion.

4.2. No Change to Your Lease Obligations

Your use of the Lighthouse Service and/or Billing Authorization Service does not, in any way, change your obligation to pay Permitted Charges that are assessed to you under applicable law or the Lease Agreement, including for damage to the Rental Property, failure to pay rent, failure to move-in/sign the lease, lease breaks,etc.

4.3. Additional Payors and Guarantors

You represent to Lighthouse that you have the authorization of any additional payor and/or guarantor not named on the lease, (also defined as a “Tenant” per our terms), to use their payment methods if you enter those into the Lighthouse Platform.You acknowledge and agree that such payment methods may be charged in place,or in addition to your own payment methods which are on file. Any additional payors and guarantors are jointly and severally liable for any and all service charges, Permitted Charges, or other amounts such as payment processing and/or facilitation fees, late fees, and/or interest due on your account. If you are an Additional Payor or Guarantor and you have provided your payment method or methods to be used in association with the Lighthouse Service, then you agree that (i) all amounts due by Applicant under this Agreement may be charged to your payment method, without notification, based on this preauthorization (ii) the Applicant and you shall be jointly and severally liable for the payment of Permitted Charges and other amounts due under this Agreement (iii) you will not challenge or apply a chargeback to any charge Lighthouse makes to your payment method that is authorized under this Agreement, and (iv) you will not change or disable your payment method without Lighthouse’s prior written consent.

4.4. Changes to your Payment Methods

You cannot remove a Payment Method used to qualify for the Billing Authorization Service because Lighthouse made a qualification decision for your use of this service based on that specific Payment Method. Lighthouse has the right to update your Payment Methods using information provided by payment service providers. If we determine that any Payment Method is no longer available, accessible, has an insufficient balance, or is otherwise insolvent, then we may require you to add additional Payment Methods, which you will be required to do within 10 days of notice from us.

4.5. Cash-to-Billing Authorization Transition

Tenants with existing Security Deposits may apply for the Billing Authorization Service in order to replace some or all of their Security Deposit amount (the“Replaced Amount”) with a Billing Authorization. Tenants should receive the Replaced Amount from the Landlord usually within 30 days of Lighthouse’s notice of the Tenant’s approval for the Billing Authorization Service. In some cases, Lighthouse may forward the Replaced Amount to Tenant while Tenant’s original Security Deposit still exists and is held by the Landlord. In such cases, Tenant relinquishes to Lighthouse any right to receive the value of the Replaced Amount of such Security Deposit. Tenant thereby authorizes Landlord to withdraw the value of the Replaced Amount of the Security Deposit to reimburse Lighthouse for the Replaced Amount. If Landlord fails to forward the Security Deposit to Tenant or Landlord, as applicable, then Lighthouse may cancel the Billing Authorization Service without any liability to Tenant.

4.6. Billing Authorization-to-Cash Transition

In some cases, Tenants with existing Billing Authorizations may be allowed to reduce some or all of the Billing Authorization Value by paying a cash amount. Such cash payment will be kept as a Security Deposit.

4.7. Billing Authorization Termination

Lighthouse may continue to charge you on a monthly basis for the Billing Authorization service for up to 60 days past the initial lease term, until the Landlord confirms that the Billing Authorization can be terminated. The Billing Authorization remains in effect and you remain liable, until termination of the service based on Landlord’s release, even if we stop charging you for the service. Lighthouse will terminate the Billing Authorization upon any of the following scenarios:

4.7.1. Confirmation by the Landlord to Lighthouse that you moved out & that you have no further liability, and that the Billing Authorization may be terminated.

4.7.2. Confirmation by Landlord to Lighthouse that you paid the equivalent of the Billing Authorization amount to the Landlord, and that the Billing Authorization may be terminated.

4.7.3. Lighthouse or Landlord may at any time in their discretion initiate a termination of the Billing Authorization. In such a case, upon notice from Lighthouse, Tenant will be required to pay the Billing Authorization Value. Tenants will be offered to select from among the Payment Methods. If Tenant does not select an option, or if Lighthouse is unable to charge the Payment Method selected by Tenant, then Lighthouse will automatically charge, either all at once or in installments at Lighthouse’s discretion, the other Payment Methods, which Lighthouse has on file for Tenant, which may include the Tenant’s credit card, debit card, and/or bank account, until the full Billing Authorization Value has been charged.

4.8. Modification to Billing Authorization Terms and Renewals

Modifications to the terms of a Billing Authorization, including the amount, may be done with the written agreement of Landlord and Lighthouse.

4.8.1. Lighthouse will seek Tenant’s consent for changes that increase theTenant’s liability, such as increases in the Billing Authorization Value And/or time frame of the Billing Authorization.

4.8.2. When a Lease Agreement is renewed, such renewal constitutesTenant’s consent for an extension of the Billing Authorization Term. If the Lease Agreement includes an increase in the required Security Deposit, then the renewal also constitutes Tenant’s consent for a corresponding increase in the Billing Authorization Value. Where Landlord notifies Lighthouse via phone, email, or some other communication method, or uploads Tenant’s extended Lease Term and/or increased security deposit requirement to the Lighthouse Platform, this will also constitute Tenant’s consent for an extension of the Billing Authorization Term as well as Tenant’s consent for a corresponding increase in the Billing Authorization Value.

4.9. Applicability to Lease Agreement Terms

Landlord acknowledged, and you hereby agree, that the terms in a Lease Agreement pertaining to Security Deposits shall be construed to apply to Billing Authorizations such that Tenant shall be permitted to subscribe to the Billing Authorization Service in satisfaction of the Tenant’s Security Deposit obligations under the Lease Agreement without need for an amendment to the Lease Agreement. Notwithstanding the foregoing, a Landlord may still require a corresponding amendment to the Lease Agreement or other documentation.

4.10. Permitted Charge Procedure

Tenants will receive a notice(s) through the Lighthouse Platform Service of the Permitted Charge as well as applicable details as provided by the Landlord. In some cases, Landlord may be able to revise a Permitted Charge after it has been submitted

5. Letter of Credit Benefits and Limitations

This Letter of Credit is issued to the Tenant solely for the Landlord’s benefit and provides payment exclusively to the Landlord pursuant to the terms, conditions and limitations set forth in the LOC, for certain physical damage, loss and costs incurred by the Landlord with respect to the Rental Property (beyond normal wear and tear) (“Damages”), and for lost and unrecovered economic value with respect to a Rental Property arising from, amongst other defaults, Tenant’s failure to meet rental payment obligations under the Lease Agreement, including past due rent, unpaid rent, fees, costs, expenses, and cancellation and other penalties (“Loss of Rent”), up to the Credit Amount only.

6. Landlord Reimbursement Request

If the Landlord makes a valid request for payment under the LOC asserting that Tenant breached the terms of Tenant’s Lease Agreement causing Damage(s) beyond normal wear & tear, as defined by Applicable Law, or defaulted with respect to Tenant’s lease obligations resulting in a Loss of Rent (as described above), Administrator will be obligated under the terms of this LOC to make a payment directly to the Landlord in satisfaction of such request not to exceed the Credit Amount.

7. Reimbursement to Lighthouse

7.1. For each valid reimbursement request asserted by the Landlord and for which a loss payment is made under this LOC,

7.1.1. Tenant agrees and commits to Pay the Administrator the amount of the payment made to the Landlord up to the Credit Amount (the“Tenant Reimbursement Amount”) independent of any rights or obligations Tenant may have under the Lease Agreement. Payment of such Tenant Reimbursement Amount will be due in full to the Administrator no later than sixty (60) business days from the written notification for reimbursement by or on behalf of the Administrator. Repayment plans may also be made available and must be established no later than sixty (60) business days from the written notification for reimbursement by or on behalf of the Administrator.

7.1.2. Tenant acknowledges and understands payment of the Tenant Reimbursement Amount may be made through various methods including, but not limited to,credit card, debit card, checking account, or savings account transfers. Installment plans may be available. Certain payment methods and installment plans may incur additional fees, which Tenant is responsible for.

7.1.3. Tenant acknowledges failure to make such payment to the Administrator within such time frame, the Administrator will have the right to commence a proceeding against me and may recover the amount due plus all attorneys’ fees and costs of collection. Such costs of collection include, but are not limited to, the fees of any collection agency, which will be added to the account at the time it is placed with an agency for collection and may be based on a percentage at a maximum of twenty-five percent (25%) of the debt, and all reasonable costs and expenses, including reasonable attorneys’ fees, incurred in such collection efforts.

7.2. If the Administrator makes a demand from Tenant  for a Tenant Reimbursement Amount, Tenant Reimbursement Amount will be due to the Administrator.

7.2.1. Tenant  hereby authorizes anyone to furnish the Administrator or its Agent (or its and their employees, agents and assigns) any information that will assist the Administrator in collecting the money Tenant owes to the Administrator; and

7.2.2. Tenant acknowledges and agrees that the Landlord is not and shall not be a party to, and is not and shall not be responsible in any way for, the actions that the Administrator or its Agent takes during any collection efforts.

8. Multiplied Co-Tenants

If Tenant is sharing the Rental Unit with one (1) or more co-tenants, Tenant understands and agrees that the Administrator will be able to seek the full performance of all obligations under the Lease Agreement and this Agreement from Tenant, even if a co-tenant may be responsible for Damages, or any failure to perform any obligation under the Lease Agreement or obligation under thisAgreement.

9. Dispute Resolution

9.1. Tenant  and the Administrator agree that any Dispute arising from or relating to this Agreement will be resolved through individual arbitration. In arbitration, there is no judge or jury and there is less discovery and less appellate review than in court. “Dispute” shall be interpreted broadly and shall include:

9.1.1 any request for relief or theory of liability, whether based in contract, tort, statute or otherwise;

9.1.2 any reimbursement requests or controversies that arose before this Agreement;

9.1.3 any reimbursement requests or controversies that arise after the expiration or termination of this Agreement; and

9.1.4 any reimbursement requests that are the subject of class action litigation. “Dispute” shall not, however, include (x) any issues relating to the existence, scope, or validity of this arbitration agreement; or (y) reimbursement requests that relate solely to the collection of any debts Tenant owes to the Administrator.

9.2. Notwithstanding anything in this Section 10 to the contrary, either Tenant or Administrator may bring an individual action in small claims court if the amount requested is within the jurisdiction of that court.

9.3. This arbitration agreement is governed by the Federal Arbitration Act. Arbitrations shall be administered by the American Arbitration Association (“AAA”) pursuant to its Consumer Arbitration Rules (the “AAA Rules”) as modified by the version of this arbitration provision that is in effect when notice of a Dispute is given. The AAA Rules can be obtained from the AAA by visiting its website (www.adr.org) or calling its toll-free number (1-800-778-7879). Unless the Administrator and Tenant agree otherwise, any arbitration hearing will take place in the county where the Rental Property is located. The arbitrator’s award may be entered in any court with appropriate jurisdiction.

9.4. Tenant may hire an attorney to represent them. Tenants will be responsible for their own attorneys’ fees and costs but may recover them from the Administrator to the same extent as in court. Notwithstanding anything in this arbitration agreement to the contrary, Administrator will pay all fees and costs that it is required by law to pay.

9.5. DISPUTES IN ARBITRATION ARE RESOLVED WITHOUT A JURY TRIAL. WHETHER IN ARBITRATION OR COURT, ADMINISTRATOR AND I WAIVE THE RIGHT TO A JURY TRIAL.

9.6. WHETHER IN ARBITRATION OR COURT, ADMINISTRATOR AND TENANT WAIVE THE RIGHT TO PROSECUTE OR PARTICIPATE IN A CLASS ACTION, COLLECTIVE ACTION, OR OTHER REPRESENTATIVE ACTION. ADMINISTRATOR AND TENANT MAY SEEK RELIEF ONLY ON BEHALF OF THEMSELVES AND ONLY TO THE EXTENT NECESSARY TO REMEDY OUR INDIVIDUAL REIMBURSEMENTS. NOTWITHSTANDING ANYTHING IN SECTION 8 OF THIS AGREEMENT TO THE CONTRARY, THIS CLASS ACTION WAIVER IS A MATERIAL AND ESSENTIAL PART OF AND CANNOT BE SEVERED FROM THIS ARBITRATION AGREEMENT.

9.7. This arbitration provision shall survive the cancellation or expiration of the Agreement.

10. Third Party Payment Services

STRIPE Some payment processing services for Tenants are provided by Stripe (www.stripe.com) and are subject to the Stripe Connected Account Agreement, which includes the Stripe Terms of Service (collectively, the “Stripe Services Agreement”). By agreeing to this Agreement or continuing to subscribe to the Billing Authorization Service and otherwise using the Lighthouse Platform, you agree to be bound by the Stripe Services Agreement, as the same may be modified by Stripe from time to time. As a condition of Lighthouse enabling payment processing services through Stripe, you agree to provide Lighthouse accurate and complete information about you and your business, and you authorize Lighthouse to share it and transaction information related to your use of the payment processing services provided by Stripe.

PLAID Lighthouse in some cases uses the services of Plaid (www.plaid.com) in order to verify Tenant’s bank account and access Tenants’ bank account current balance and transaction history (the “Plaid Service Data”). Tenant hereby expressly grants Plaid the right, power and authority to (acting on behalf of Tenant) access and transmit the Plaid Service Data as reasonably necessary for Plaid to provide its service to Tenant

11. Integration

This Agreement is the entire agreement between Tenant and the Administrator. Tenant expressly states and acknowledges that Tenant is not relying on any other written or oral promises, statements or understandings not contained in this Agreement, and no such other statements, promises or understandings shall be part of this Agreement.

12. Severability

If any provision (or portion of a provision) of this Agreement shall be held to be invalid, illegal or unenforceable according to the laws, regulations or public policy of any jurisdiction, the validity, legality and enforceability of the remaining provisions (and such portions of provisions) shall in no way be affected or impaired thereby, and such invalidity, illegality or unenforceability of such provision (or such portion of a provision) in such jurisdiction shall not affect the validity, legality or enforceability of such provision (or such portion of a provision) in any other jurisdiction, in each case, unless the unenforceability thereof would reasonably be expected to have a material adverse impact on a party hereto, in which case such party’s consent thereto shall be required in order for this Agreement to continue in effect

13. Contact Information

For any questions or concerns regarding this Agreement or the LOC, please contact us at:

• Phone: (818) 401‐3300
• Email: support@mylighthouse.co
• Address: My Lighthouse, 1644 Casale Rd Pacific Palisades, CA 90272

By agreeing to these terms, you confirm that you have read, understood, and agree to be bound by this Agreement. Participation in this program reaffirms your commitment to the terms laid out herein.