TheGuarantors Sues Lease Guarantee Rival Over Kickbacks

A lease guarantee firm is coming after an upstart competitor, accusing the two-year-old firm of an illegal kickback scheme and unauthorized services.

In a federal lawsuit filed in Georgia’s Northern District, TheGuarantors accused Cosign of paying illegal kickbacks to its landlord and property manager partners. The firm also cited Cosign’s business model to accuse the firm of wrongfully operating as an insurance company across several states.

The lawsuit provides a look at the emerging field of lease guarantee providers, third-party businesses that provide landlords with guarantees on rental agreements with tenants in exchange for a fee.

Founded in 2014, TheGuarantors claims it is the number one lease guarantee provider in the country, according to its website. Cosign is a newer entrant to the market, founded by brothers Zach and Jake Schofel in 2024. Zach also co-founded Eastman Residential, a multifamily investment arm of his family’s Eastman Companies, in 2020.

Cosign charges a fee of about one month’s rent to act as a cosigner, according to the lawsuit. If a tenant defaults, the landlord can submit a claim to Cosign, which covers unpaid rent up to a chosen amount, $1,000 in damages, and $500 for legal eviction costs, the lawsuit alleges, citing marketing materials.

Cosign acts as an insurance provider and falsely advertises itself as offering a contractual guarantee, TheGuarantors alleges in the suit.

Cosign operated for a year without proper insurance licenses in most states, including Georgia, and only began obtaining insurance licenses after concerns were raised, according to the lawsuit. By June 2026, Cosign obtained insurance agency licenses in nearly all remaining states, the suit alleges.

In addition to operating without required insurance licenses, the lawsuit alleges that Cosign offered illegal kickbacks to property managers and landlords who signed the company’s participation form. The lawsuit alleges that landlords and property managers received a 10 percent share of tenant fees collected.

“TheGuarantors does not make these claims lightly. We’re committed to protecting the interests of the owners, operators, and renters we serve, and to promoting industry-wide standards that benefit all market participants,” said Julien Bonneville, founder & CEO of TheGuarantors.

The revenue-sharing agreements amount to illegal rebates or insurance commissions paid to an unlicensed entity under Georgia law, TheGuarantors claims in the complaint. As a licensed company, TheGuarantors said it is barred from making these payments to landlords or property managers. Landlords who participate in these revenue-sharing agreements are exposed to liability under Georgia insurance law, the suit alleges.

TheGuarantors alleged that it has lost a longtime client, a large portion of business from another client, and three prospective clients to Cosign.

Cosign’s Zach Schofel in a statement claimed the firm has attracted former customers of TheGuarantors who were seeking “lower costs for residents, a team that responds to customers, and a dynamic, data-driven approach to approvals instead of legacy practices.”

“We see this lawsuit for what it is: a dominant market player trying to squash an emerging competitor, making housing more expensive for working Americans in the process,” said Schofel. “We categorically reject TheGuarantors’ characterization of our business: we are an insured solution and we look forward to providing ever-better value for ordinary Americans.”