Can I collect an application fee from every applicant?

Application fees are intended to cover the cost of tenant screenings such as credit and background checks. Landlord-tenant statutes of each state can address the matter of application fees differently. You will need to determine what your state allows before deciding on your policy.

As allowed by statute, many landlords do charge an application fee. The local rental market as well as the location of the rental property could be a consideration in setting the amount of an application fee but the determining factor is your state statute. As examples, some statutes set a maximum fee amount while others limit the fee amount to actual out of pocket costs as charged by the tenant screening services provider. In a few states there is no stated limit on application fees.

Each applicant should be tenant screened according to your written rental policies, in the same non-discriminatory manner, and charged the same fee.

If you will be renting to co-tenants, such as roommates, you can and should screen each adult who will sign the lease (which should usually be every adult occupant) and will reside in the rental unit. Therefore, if allowed by statue, you can and should charge an application fee for each applicant for that unit. Tenant screening of all applicants is important to protect your business. Your lease agreement should hold all co-tenants jointly and severally liable for payment of rent and complying with the lease terms and conditions. You will want to be sure each potential tenant is qualified under your rental standards to meet this responsibility. Whether you choose to charge an application fee or not, each and every applicant should be tenant screened as part of your responsibility for the duty of care to your current tenants.

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