Rental Application Fees

Updated August 2020

Rental application fees can create a lot of questions for landlords and tenants alike. Landlords understand the importance of collecting these fees, but they may be confused about what limits they must follow. Potential tenants, on the other hand, may not understand what the fees are or what they are used for.

For landlords, the most important thing to understand is the answers vary widely and are dictated by the state you live in. It is your duty as a landlord to ensure you are following the rules; breaking them could cause you to be fined or otherwise penalized.

In this post, we will cover every aspect of rent application fees and what you need to know about charging rental application fees in your area.

A Table Of Contents For Rental Application Fees

Landlord Tip: Our Tenant Screening 101 Guide will walk you through the entire tenant screening process. This is invaluable when trying to find the right tenant for your property.

What Are Rental Application Fees?

What Are Rental Application Fees?Rental application fees are fees that are collected by landlords alongside a rental application. The fee is typically used to cover the hard cost of processing the rental application such as the cost of running a background check.

In some cases, the fees will also cover the soft costs of running a background check. This could include paying for the administrative time spent reviewing and cross-checking the information in the application.

Who Must Pay Rental Application Fees?

Every state has specific laws that will be explored more thoroughly later in today’s article, but generally speaking, every person who will be on the lease must pay a rental application fee.

Some landlords may waive fees for the secondary renters, but what is an application fee when renting but a way to cover the cost of the background checks and other associated costs?

Background checks are not free to process, and that is why landlords usually choose to collect a rental application fee or have the potential tenant pay for their background check directly.

What Is The Average Rental Application Fee?

The average fee we see landlords charging is $30 per applicant. For this reason, we use it as the standard fee on our free rental application on our site.

The location and market of the property play the biggest factor in fluctuating application fees.

If the rental unit is in a very desirable neighborhood and warrants a higher rent, then it’s perfectly acceptable to charge more.

In some cases, we’ve seen $50-$200 charged per applicant.

However, before adopting the idea of market-based fees, you must consider your local state regulations first to be sure they don’t enforce specific guidelines for charging application fees.

You’ll also want to make sure you have an up-to-date and compliant rental application form.

How Much Can A Landlord Charge For An Application Fee?

As a landlord, you might be wondering what you should be charging for a rental application fee and how much you can charge depending on your specific market.

When it comes to finding the limit on rent application fees, it mainly comes down to the following two questions:

  • Is it legal in your state to charge a rental application fee?
  • Is there a maximum a landlord can charge?

In the section below, we will provide a quick snapshot of the current regulations for all 50 states. How much landlords like you can charge for a rental application varies by state. Some states have very specific limits while others are vaguer. It is important that you know what your state requires.

Rental Application Fee Laws By State

Below is a complete list of rental application fee laws for each state.

You can click on each state name to read up on more specifics on tenant screening laws specific to that state.

  • Alabama – No statute.
  • Alaska – Sometimes a landlord asks for a nonrefundable application fee to place a prospective tenant on a waiting list for an apartment. If an application fee covers the landlord’s actual, reasonable costs for services performed (such as checking the applicant’s credit history), it is probably lawful. .
  • Arizona – Landlords are allowed to charge an application fee and there are no limits.
  • Arkansas – There are no limits on application fees and they are not refundable, even if the tenant is denied.
  • California – As of 2019, the most you can charge for an application fee is $50.94 and it should not exceed the landlord’s actual out-of-pocket costs.
  • Colorado – There is no limit for the maximum a landlord can charge for an application fee; however, many Colorado cities have laws and regulations that are actually stricter than the state law, so landlords need to check with the city where the rental property is.
  • Connecticut – Landlords in the state are not limited in the amount they can charge for an application fee.
  • Delaware – Landlords can only charge the greater of one month’s rent or $50 for an application fee.
  • Florida – The state does not limit the amount a landlord can charge for application fees but it is advised that they do not charge more than the average out-of-pocket expense.
  • Georgia – Has no limits on what a landlord can charge for application fees and they are non-refundable.
  • Hawaii – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Idaho – There are no limits on how much landlords charge for application fees.
  • Illinois – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Indiana – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Iowa – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Kansas – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Kentucky – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Louisiana – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Maine – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Maryland – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Massachusetts – As of August 2014, landlords may NOT collect application fees from applicants.
  • Michigan – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Minnesota – The landlord should not charge more than what the screening service charges; any extra funds need to be refunded back to the applicant.
  • Mississippi – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Missouri – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Montana – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Nebraska – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Nevada – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • New Hampshire – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • New Jersey – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • New Mexico – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • New York – $20 limit as of June 2019.
  • North Carolina – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • North Dakota – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Ohio – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Oklahoma – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Oregon – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Pennsylvania – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Rhode Island – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • South Carolina – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • South Dakota – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Tennessee – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Texas – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Utah – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Vermont – Landlords canNOT charge an application fee in Vermont.
  • Virginia – A landlord can charge up to $50 for an application fee that is used to pay for screening services. The landlord may charge a separate application deposit that must be refunded within 20 days to any tenants denied the rental.
  • Washington – The application fee must be the exact amount of the background check and the landlord must show a receipt to show the actual cost of that background check.
  • West Virginia – Has no limits on what a landlord can charge for the application fee and they are non-refundable.
  • Wisconsin – The landlord cannot charge more than $20 for an application fee and must give a copy of the background report to the tenant.
  • Wyoming – Has no limits on what a landlord can charge for the application fee and they are non-refundable.

Some states like California, Virginia, Wisconsin, and Minnesota have more specific laws and regulations regarding the collection of rental application fees by landlords. The laws are often similar and can be summarized with some specifics below:

California 

For more regulations on the application fee in California:

  • Landlords may charge (per applicant) a maximum screening fee of $35.
  • The fee must be used for “actual” out-of-pocket costs of obtaining a background check and the “reasonable” value of time spent by the landlord obtaining the background information.
  • If the landlord charges a screening fee, they are obligated to provide the applicant a copy of the background check upon request.
  • If the landlord spends less on the background check and their time than what was charged, a refund must be issued for the difference.
  • Unless the applicant agrees in writing, the landlord may not charge a screening fee if the rental unit is not available.
  • A landlord must give applicants an itemized receipt for the charges.

Although it’s not free, a great resource for California landlords is the California Landlord’s Law Book.

Virginia

Rental Application Fee Laws By StateLanguage regarding the Virginia rental application fee laws can be found on this Virginia Law website.

The most notable take-away from the state of Virginia’s laws concerning application fees is if the applicant fails to rent the unit and the fee exceeds $35, the landlord must refund the fee within 20 days after the rejection. However the refund shall only be required to cover all sums in excess of actual expenses incurred. So if the landlord charged $30 for the fee, and can only itemize $20 for the background check, then the applicant would be due $10.

Wisconsin

Language regarding the Wisconsin rental application fee laws can be found on page 8 of this Badger Law document.

The most notable take away for Wisconsin is that “the landlord can only charge the actual cost of obtaining a screening report, and never more than $20.”

More States

Minnesota https://www.revisor.mn.gov/statutes/?id=504B.173

Washington http://www.tenantsunion.org/rights/tenant-screening

NYC (Specifically within New York City) http://www.housingnyc.com/html/guide/basics.html#Fees

Are Application Fees Refundable?

This will depend on your state. In most states, a landlord does not have to refund the rental application fee, but in others, they may. Here are few states laws about refunds that a landlord must know about:

  • Massachusetts – It’s illegal to charge an application fee.
  • Minnesota – Any extra funds beyond what the screening service costs should be refunded back to the applicant.
  • Vermont – Landlords cannot charge an application fee.
  • Washington – The application fee must be the exact amount of the screening service cost.
  • Wisconsin – The landlord cannot charge more than $20 for an application fee.

A common misconception is that you must charge what you’re paying for their background check. While obviously this number should be relative, there is nothing wrong with figuring in your time and energy as an expense.

So, if the tenant screening cost on that applicant is $25, it is perfectly acceptable to charge $30, accounting for the additional $5 as a processing or administration fee.

In typical “it takes one to ruin it for the rest” fashion, landlords who charge an application fee under the premise that it will cover the cost of the background check but never intend to run the background check will find themselves in trouble. Application fees are not intended to be for-profit and should never be seen as a source of revenue.

Nothing screams fraud like charging for something that you don’t undertake and tenants will quickly feel alienated. Being fair and honest about the screening process and the charges associated is best-practice for any landlord.

Rental Application Fees FAQs

Why Is There A Rental Application Fee?

New landlords and tenants searching for an apartment might not be aware of why rental application fees are the standard in the industry. Rental application fees are intended to cover the cost of processing the rental application. Specifically, the fees are most often used to cover the cost of screening tenants through background checks and credit reports.

This means the fees are used to pay for credit checks, background checks, and associated costs of determining whether or not the tenant applying is a good fit for the property.

Additionally, rental application fees have become the standard in the industry because they keep potential tenants from applying to properties they do not have any real interest in. Not only is the fee used to pay for the screening, but it also helps to ensure that those applying to rent the property are serious about their interest.

How Much Should A Rental Application Cost?

Most rental application fees are between $35 and $75 per person, but the exact limit of what a rental application fee can or should cost depends on the area you are working in. As a working landlord, it is your responsibility to research your state and local guidelines about rental application fees to ensure your fees do not violate the rules.

Overall, the rental application should only cost as much as it truly costs for you to process the application. Rental application fees are not a means of collecting extra revenue and should never be treated as such.

Why Are Rental Application Fees So Expensive?

When you’re new to the industry, having tenants pay a fee just to apply to rent a property may seem bizarre. Remember, however, you will receive multiple applications, and it takes both time and money to screen the potential tenants. Background checks cost money, and your time investment is worth something as well.

That being said, landlords or property management companies should never be charging exorbitantly high rental application fees. In some markets where fees are not limited, landlords in high-traffic areas will use high fees to limit the number of applications they receive, but it is better to use other screening practices besides high fees.

Should I Return A Rental Application Fee If The Potential Renter Withdraws Their Application?

Landlords  may wonder if they have to return a rental application fee if the potential renter decides to withdraw their application fee for an apartment. Unlike a security deposit that is usually returned, whether or not this is possible, is up to two factors: the landlord and the law.

On the law front, some cities or localities may have rules that require refunds in specific cases depending on where the property is located. Make sure you are familiar with whether or not any such rules will apply to your properties.

On the landlord front, it is ultimately up to you to determine if you want to give an applicant a refund or not. If you have not yet processed their application or paid for any screening services, it is probably best to give a refund. The funds should be used for these services, so the money can be refunded if the screening hasn’t happened yet.

How Do I Get My Rental Application Fee Waived?

Landlords should not waive rental application fees in most cases. This is because it could be considered a violation of the Fair Housing Act to require one applicant to pay a fee while another applicant does not have to pay a fee.

It is worthwhile for landlords to know that a potential tenant may have trouble budgeting the cost of applying to multiple rentals, and there may be some local housing organizations that can provide a stipend to cover the cost of application fees.

Rental Application Fees: More Than A Fee

There’s no doubt that rental application fees are the standard in the industry for a reason. On top of helping to cover the cost of screening tenants, this legal fee also gives a way for landlords to pre-screen tenants from day one in many states.

Most experienced landlords agree that the fastest way to deter the time-wasters and tire-kickers is to be upfront about charging an application fee to cover the cost of a background check.

In most cases, the tenants who know they have evictions or criminal records that will appear on their background checks will not pay to have you find this information and disqualify them. For those that gladly agree, most landlords will apply the rental application fee to their first month’s rent.

Landlord Tip: Always be sure to include the exact fee amount on the rental application that will be signed by the applicant. Unless state law prohibits, mention the fee is non-refundable. After all, you won’t be given a refund by the screening company if you deny that applicant.

3 Comments

  1. I understand weeding out complete scumbags but here in Oklahoma where there are NO STATUTES on an app fees, security deposits, pet deposits ect., the property management company’s our full blown screwing people, & pocketing the TAX FREE $$$$..I can find out everything I need to know about YOU on my smart phone right now for FREE. so spare me the B.S. about there COST. what a ******* RACKET!!!! THERE JUST AS MUCH A “CRIMINAL” AS THE “CRIMINAL ELEMENT” THEY DONT WANT AROUND!!!! THE DIFFERENCE………..THEY CAN AFFORD A REAL ATTORNEY,….THATS THE AMERICAN WAY, THE AFFLUENT BREAK LAWS ALL DAY LONG, & BECOME MORE AFFLUENT, WHILE ******* THE COMMON MAN, $ NOT PAYING ANY TAXES,WHILE THE COMMON GUY PAYS EM ALL!!! &you guys are surprised when they have less than perfect credit & a couple of non felonious scuffs wiht the law. If he can’t pay application fee,never been arreested , has an 800 credit score, been at same job for 20 years, blessed by Jesus,Allah,& Buddah, & endorsed by the pope ,he not “our king of People”. Hate to break it to you but you pool of dream tenants is evaporating QUICK!!

    • Don, don’t you think that the affluent would want more than $20 or $50 from “the common man” if we were out to screw everyone? When you have money, $50 tax free don’t really mean that much.
      And you cannot find everything you need to know on your smartphone for free. This is just plain ignorant. People who have money value their time more than anything, so we don’t have time to jump all over the internet hoping to stumble across relevant information.
      There are plenty of dream tenants out there. I should know, I have a few. But I went through quite a few applicants and background checks to find them. Not because they’re sparse, but because I’m allowed to be picky when it’s MY property they’re living in.

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