A lease assure agency is coming after an upstart competitor, accusing the two-year-old agency of an unlawful kickback scheme and unauthorized companies.
In a federal lawsuit filed in Georgia’s Northern District, TheGuarantors accused Cosign of paying unlawful kickbacks to its landlord and property supervisor companions. The agency additionally cited Cosign’s enterprise mannequin to accuse the agency of wrongfully working as an insurance coverage firm throughout a number of states.
The lawsuit gives a have a look at the rising area of lease assure suppliers, third-party companies that present landlords with ensures on rental agreements with tenants in change for a charge.
Based in 2014, TheGuarantors claims it’s the primary lease assure supplier within the nation, in response to its web site. Cosign is a more moderen entrant to the market, based by brothers Zach and Jake Schofel in 2024. Zach additionally co-founded Eastman Residential, a multifamily funding arm of his household’s Eastman Corporations, in 2020.
Cosign costs a charge of about one month’s hire to behave as a cosigner, in response to the lawsuit. If a tenant defaults, the owner can submit a declare to Cosign, which covers unpaid hire as much as a selected quantity, $1,000 in damages, and $500 for authorized eviction prices, the lawsuit alleges, citing advertising supplies.
Cosign acts as an insurance coverage supplier and falsely advertises itself as providing a contractual assure, TheGuarantors alleges within the go well with.
Cosign operated for a yr with out correct insurance coverage licenses in most states, together with Georgia, and solely started acquiring insurance coverage licenses after considerations had been raised, in response to the lawsuit. By June 2026, Cosign obtained insurance coverage company licenses in almost all remaining states, the go well with alleges.
Along with working with out required insurance coverage licenses, the lawsuit alleges that Cosign supplied unlawful kickbacks to property managers and landlords who signed the corporate’s participation type. The lawsuit alleges that landlords and property managers obtained a ten % share of tenant charges collected.
“TheGuarantors doesn’t make these claims flippantly. We’re dedicated to defending the pursuits of the house owners, operators, and renters we serve, and to selling industry-wide requirements that profit all market individuals,” mentioned Julien Bonneville, founder & CEO of TheGuarantors.
The revenue-sharing agreements quantity to unlawful rebates or insurance coverage commissions paid to an unlicensed entity underneath Georgia legislation, TheGuarantors claims within the criticism. As a licensed firm, TheGuarantors mentioned it’s barred from making these funds to landlords or property managers. Landlords who take part in these revenue-sharing agreements are uncovered to legal responsibility underneath Georgia insurance coverage legislation, the go well with alleges.
TheGuarantors alleged that it has misplaced a longtime consumer, a big portion of enterprise from one other consumer, and three potential purchasers to Cosign.
Cosign’s Zach Schofel in an announcement claimed the agency has attracted former clients of TheGuarantors who had been searching for “decrease prices for residents, a group that responds to clients, and a dynamic, data-driven method to approvals as an alternative of legacy practices.”
“We see this lawsuit for what it’s: a dominant market participant making an attempt to squash an rising competitor, making housing costlier for working Individuals within the course of,” mentioned Schofel. “We categorically reject TheGuarantors’ characterization of our enterprise: we’re an insured answer and we sit up for offering ever-better worth for abnormal Individuals.”
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