Several local investors spoke out during a joint meeting of City Council's Neighborhoods and Tourism, Health and Small Business committees where the proposed ordinance was introduced. The law - co-sponsored by Vice Mayor Alicia Reece and council member Laketa Cole - seeks to regulate the common real estate practice of offering rent-to-own homes.

Deb McMillan, past president of the Cincinnati Real Estate Investors Association, said she supports regulating lease-option agreements, but the city's proposal goes too far. McMillan said a similar law proposed years ago was shot down by the state legislature because it hurt good landlords.

"The good landlord wants to sell these homes under lease-options," McMillan said. "This law hurts the good guy."

City officials said too many unwary buyers are getting ripped off through lease-option housing deals. Lease-option contracts typically promise a renter a chance to buy a home after paying an up-front fee of $1,000 to $2,000 and making rent payments for one or two years.

The renters have a chance to purchase the home if they meet all the terms and conditions and secure a loan. Often, the contracts require renters to perform all maintenance on a home - a tactic sometimes used by landlords to shift large repair bills to the renter, city officials said.

The proposed policy council will vote on today states lease-option agreements in Cincinnati would be subject to all state landlord-tenant laws. It says the agreements must contain the words "This is not a contract to buy" and landlords must disclose the condition of the property to renters.

The law would also limit the amount of the fee. It cannot exceed 11/2 times rent in the first or second year. Landlords must also disclose the fee is nonrefundable.

Landlords must make sure tenants read the informational pamphlet prior to signing a contract. Failure to comply with the regulations could result in fines of $90 to $500 per offense.

"We want to X-out the bad apples," Reece said. "If you're doing it right, you don't have a problem with this legislation."

Some area real estate investors said they support placing anti-predatory regulations on lease-option contracts, but placing a cap of three times the monthly rent on option fees penalizes them in addition to the predators.

Investors said the option fee is the only cushion protecting landlords against contract defaults - which occur 40 to 70 percent of the time. The average lease-option contract is terminated after four months, city officials said.

"The problem is many of these houses have to be refurbished and investors use the option fees to get these homes up to code so that they can rent them," said Charles Wallner, of the Real Estate Investors Association. "It's one of the ways of judging if people will follow through with the contract."

. Vena Jones-Cox, of the Real Estate Investors Association, said placing a limit on option fees would deter investors from buying homes in Cincinnati, . meaning fewer home ownership opportunities for people with poor credit or no down payment money.

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