When the landlord spends the funds, he is not spending equivalent to a third-party IOU. Suppose you and your landlord share the A-B channel. When he wishes to

When the landlord spends the funds, he is not spending equivalent to a third-party IOU. Suppose you and your landlord share the A-B channel. When he wishes to spend the rent money he pays you back in the A-B channel in return for your paying the same amount in another channel to party C (who is likely a node). For the record, this process is trustless in the sense of the word that no trust is required. Nobody can wander off with anyone's funds. When party C (or party D, E, F, whoever receives it) actually gets the money he doesn't have to care about the state of things in in the original A-B channel. His money came from the other party is his channel and that's the only transaction he needs to watch. It's not like a third party IOU at all. And, of course because the Bitcoin network can enforce ownership, calling lightning an IOU does not really do it justice.