Rental Application Fee Laws By State

Navigating the landscape of rental application fees laws across different states can be a daunting task for both landlords and tenants alike. With regulations varying significantly from one jurisdiction to another, it's crucial to stay informed to ensure compliance and avoid potential legal issues. 

In this guide, we'll delve into the rental application fee laws state by state, shedding light on the different regulations governing this aspect of the rental process.

What is a Rental Application Fee?

A rental application fee is typically charged by landlords to cover the costs associated with processing a lease application. These fees serve to protect both the landlord and existing tenants by ensuring that potential renters are reliable and responsible. The primary purposes of these fees include:

• Verifying credit history
• Conducting background checks
• Identifying previous evictions
• Ensuring the applicant is safe and responsible

In addition to these checks, application fees may also cover the time spent by the landlord or administrative staff in reviewing and verifying the information provided by the renter on the application. For instance, if the screening cost is $20, a landlord might charge an additional $10 for administrative time.

It is important to note that if a landlord does not conduct these searches, they should not charge an application fee. These fees are not intended to be a source of revenue for property owners.

Related: A Guide To Rental Applications For Landlords [+Free Template]

How Do Rental Application Fee Laws Vary By State?

While many states don't impose limits on rental application fees that is not true for all of them. Below is a summary of the states that restrict rental application fees in some way.

• Maine: Landlords can only charge for the actual cost of the screening.
• Massachusetts: Application fees are not allowed.
• Minnesota: Any excess money beyond what is needed for screening should be refunded.
• New York: There is a $20 limit for application fees.
• Vermont: Application fees are not allowed.
• Washington: The application fee must equal the exact cost of the screening service.
• Washington D.C.: The fee must not exceed $50.
• Wisconsin: There is a $25 limit for application fees.

There may also be additional regulations in certain cities and jurisdictions so always make to check local laws.

Check your local landlord-tenant state laws here

A State by State Guide To Rental Application Fee Laws

While this guide provides an overview of rental application fee laws by state, it's essential to consult specific state statutes and regulations for precise information. Additionally, some states, like California, Virginia, Wisconsin, and Minnesota, have more detailed laws regarding application fees, emphasizing transparency and fairness in the rental process.

Related: A Guide to Rental Applications in Florida 

California Rental Application Laws

• Landlords can charge a maximum screening maximum screening fee of $30 which can be adjusted to the CPI.
• As of December 2023, the CPI adjusted increase to the screening fee is $32.02 and the total maximum fee you can charge is $62.02.
• The fee must cover the actual out-of-pocket costs of background checks and the reasonable value of the landlord's time spent obtaining background information.
• Landlords must provide applicants with a copy of the background check upon request if a screening fee is charged.
• If the landlord spends less on the background check and their time than what was charged, they must issue a refund for the difference.
• Unless the applicant agrees in writing, landlords cannot charge a screening fee if the rental unit is unavailable.
• Landlords must provide applicants with an itemized receipt for all charges.

Related: A Landlord’s Guide To California Rental Applications 

Virginia Rental Application Laws

• Information on Virginia's rental application fee laws can be found on the Virginia Law website.
• Notably, if an applicant fails to rent the unit and the fee exceeds $35, the landlord must refund the fee within 20 days after rejection. However, the refund is only required to cover sums in excess of actual expenses incurred. For example, if the landlord charged $30 for the fee but can only itemize $20 for the background check, the applicant would be due a $10 refund.

For additional information on rental application fee laws in other states, refer to specific state statutes and resources provided, such as those for Minnesota and Washington. Additionally, for rental regulations specific to New York City, consult resources like the NYC Housing Guide.

Related: Landlord-Tenant Laws For Virginia State

Final Words: Rental Application Fee Laws

With regulations varying significantly from one jurisdiction to another, it's crucial to stay informed to ensure compliance and avoid potential legal issues. This guide has provided an overview of the diverse regulations governing rental application fees for each of the different US states, highlighting the importance of understanding and adhering to state-specific laws.

To streamline this process and ensure compliance, landlords can utilize property management software like Landlord Studio to simplify the rental applications and tenant screening process. 

Landlord Studio is about more than just tenant screening though. Collect rent online, manage maintenance, store documents, and stay on top of your finances. All in one place - for free.

Save time, reduce vacancies, and secure the best tenant possible every time.

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Rental Application Fee Laws FAQs

How Much Can Be Charged for an Application Fee?

The average rental application fee in the U.S. is $30-$50 per applicant. However, the fee amount can vary significantly depending on the location and the real estate market value of the rental property. Some states have specific limits on these fees, while others have no restrictions at all. Refer to the list above for more details.

Who Should Pay the Rental Application Fees?

State laws vary on who should pay the rental application fees, but typically, every person whose name will be on the rental lease agreement must pay the application fee. Some landlords may choose to waive fees for secondary renters, while others might require applicants to pay directly for their own background checks.

Are Rental Application Fees Refundable?

Most states do not restrict rental application fees, and they are generally not refundable.

Is It Possible to Avoid a Rental Application Fee?

Charging application fees can help discourage individuals with prior evictions or criminal backgrounds from applying to rent a property. Waiving application fees selectively could be viewed as a violation of the Fair Housing Act.

For individuals struggling to pay multiple application fees during their apartment search, local housing organizations might offer assistance. Some groups provide stipends to help cover the costs of rental application fees. The availability of these opportunities varies by state and community.