Sec. 92.111. FEE IN LIEU OF SECURITY DEPOSIT. (a) If a security deposit is required by a residential lease, the landlord may choose to offer the tenant an option to pay a fee in lieu of a security deposit. If a landlord offers a tenant the option of paying a fee in lieu of a security deposit, the landlord:
(1) shall offer the tenant the option to instead pay a security deposit; and
(2) may not use a prospective tenant's choice to pay a fee in lieu of a security deposit or a security deposit as a criterion in the determination of whether to approve an application for occupancy.
(b) At the time a landlord offers to a tenant the option of paying a fee in lieu of a security deposit, the landlord shall notify the tenant in writing:
(1) that the tenant has the option to instead pay a security deposit;
(2) that the tenant has the option to terminate the agreement to pay the fee in lieu of a security deposit at any time and stop paying the fee, and instead, to pay a security deposit in the amount that is otherwise offered to new tenants for substantially similar housing on the date the tenant chooses to pay the security deposit; and
(3) of the charges for each option described by Subdivision (1) or (2).
(c) If the tenant decides to pay a fee in lieu of a security deposit, an agreement to collect the fee must be in writing and signed by:
(1) the landlord or the landlord's legal representative; and
(2) the tenant.
(d) A fee in lieu of a security deposit must be:
(1) a recurring fee of equivalent amount; and
(2) payable at the time each rent payment is due during the lease.
(e) A fee collected under this section may be used to purchase insurance coverage for damages and charges for which the tenant is legally liable under the lease or as a result of breaching the lease. A