No matter how trustworthy a tenant may seem, landlords should always conduct a thorough tenant background check before signing a lease agreement. However, these screenings aren’t free—running a criminal check, credit report, and eviction records search can all add up, not to mention any costs associated with processing rental applications.
To cover these costs, landlords can charge application and screening fees. Tenants typically pay these fees during the rental application process, saving landlords money while allowing them to find out all the necessary information about a new renter.
Regulations surrounding these fees vary by location, though, so landlords should learn the details of application and screening fee management before even listing a rental property. Keep reading to find out what landlords should know about application and screening fees.
Landlords typically charge application fees to cover the costs of tenant screenings and application processing. These costs may stem from routine procedures, such as verifying employment status, checking eviction history, and obtaining credit reports.
Although tenant screenings can feel expensive, these checks help landlords determine whether a tenant will be a good fit for a particular rental unit.
The amount that landlords can legally charge for application fees varies by state. For example, some states only allow landlords to charge applicants their actual screening costs. With that said, most landlords charge between $30 and $50 per applicant.
In most cases, yes. Only two states—Massachusetts and Vermont—prohibit landlords from charging application fees, though other states may place restrictions on rental application fees.
Application fees help landlords conduct thorough tenant screenings, which typically cover eviction, credit, and criminal history to verify the information provided in a tenant’s rental application. This process can help landlords select the most qualified tenants for their rental properties, potentially preventing the need for costly and stressful evictions in the future.
Application and screening fees refer to money paid by the tenant to cover the costs of processing a rental application and conducting a tenant screening. Landlords can use these to cover essential expenses, such as credit reports, background checks, and administrative costs.
In most cases, tenants pay application and screening fees to the landlord or property manager when turning in a rental application.
Application fees cover the administrative costs incurred by processing a rental application. As part of this process, application fees can also cover the costs of conducting tenant screenings.
The costs of screening tenants may vary based on the organization handling the screening process. On average, a screening costs anywhere between $15 to $40. However, landlords who charge application and screening fees can pass these costs along to their tenants.
Landlords charge application fees when a prospective tenant applies to rent a dwelling unit. These fees can cover the costs of processing the application and performing tenant background checks. Screening fees, on the other hand, can only be used to conduct tenant background checks. Simply put, application fees may include screening fees.
Some states, counties, and municipalities in the U.S. require landlords to refund application fees, particularly if the fee exceeds a certain amount, if the actual costs of the screening are less than the application fee received, or if the landlord does not select the applicant as a tenant.
However, this is not the case everywhere in the U.S., so landlords should check local laws to determine whether a refundable application fee is required.
We highly recommend that landlords charge application fees to cover the administrative costs of accepting and processing rental applications, including running a background check on the tenant. These fees can also help determine whether an applicant is serious about a rental property, saving landlords time and money.
Landlords who charge screening fees can afford to conduct more detailed background checks on tenants, covering credit, criminal, and eviction history in addition to income verification. This process provides peace of mind and confidence when renting.
To explain application fees, landlords can provide tenants with an itemized list of exactly what these fees will cover, including administrative and screening costs. Full transparency about the application fee’s purpose, amount, and whether or not the fee is refundable can establish a vital sense of trust between landlords and tenants.
Landlords typically ask applicants to pay screening fees when submitting a rental application, as this is when landlords will typically conduct tenant screenings.
Although some landlords prefer to cover application fees themselves, you may want to charge application fees to gauge a renter’s interest, narrow the applicant pool, or help cover the costs of tenant screening and application management.
TurboTenant charges flat application fees. If a landlord has the Free or Pro plan, applicants pay $55. For landlords on the Premium Plan, applicants only have to pay $45.
Yes! TurboTenant provides detailed screening reports on all applicants at no cost to landlords. Our screening services cover crucial items like background checks, eviction records, and tenant credit reports, as well as income verification.
TurboTenant does charge tenant screening fees. However, these fees are passed along to the tenant and are not the responsibility of the landlord.
Landlords can use TurboTenant to generate a detailed report on a tenant’s background, credit, and eviction history within less than five minutes. Having all of this information available will help landlords select the most qualified tenants possible for their rental properties.
Legal limits on application fees vary by location. Some states place a strict cap on the amount that landlords can charge, while others tie annual application fee adjustments to the Consumer Price Index. To learn more, landlords should review state and local landlord-tenant laws.
Yes, landlords are generally required to disclose application fees in all states. Even if disclosure is not required, doing so will foster trust between the landlord and tenant and help prevent future conflicts. Landlords should also consider providing applicants with receipts for application fees.
Having a clear and concise policy surrounding application fees can prevent confusion between tenants and landlords, thereby streamlining the process of charging an application fee. To write an application fee policy, landlords should be direct and transparent about what the application fee covers and what it does not.
Policies should include information on the requirements to waive the fee, whether the fee is refundable, and the amount of the fee. Last but not least, landlords should make the policy easily accessible to tenants.
Application fees are refundable in some states, counties, and municipalities but not everywhere in the U.S. Regardless, landlords should always inform tenants whether they will refund an application fee and under what circumstances.
If landlords fail to disclose application fees, they may be violating local or state laws and could be subject to penalties, including fines and adverse legal action. Additionally, this may lead to disputes with applicants who aren’t expecting these fees.
Charging an application fee can be a crucial part of the rental application process. As daunting as it may sound to collect money from every single applicant or interested renter, you have several options to make this process easier.
First, you can use platforms like TurboTenant to automate the collection of application fees. You can also consider whether or not you’ll want to cover the costs of conducting the screening yourself or whether you want to charge your tenants.
Additionally, to avoid wasting time for both you and your tenants, you should only ask for an application fee after the applicant confirms their interest in the rental property.
Of course, being able to pay an application fee doesn’t guarantee that a tenant will be the right choice for your rental property. Digital platforms like TurboTenant significantly simplify the tenant screening process, making it easier to find trustworthy and reliable renters.
Whether or not you’ve decided to charge application and screening fees, staying well-informed is essential for landlords. You can use these fees to find quality renters and offset the costs of managing rental applications, saving valuable time as well as money.
And that’s just the start—think of the headaches you’ll avoid by thoroughly screening tenants who may cause problems for you and your property.
Instead of navigating the application fee process by yourself, use TurboTenant. Our software streamlines the legal management of application fees, ensuring you’re compliant with all relevant local laws.
Beyond legal compliance, you also should strive to be as transparent and flexible as possible with tenants during the application process. Doing so will improve sentiment on both sides and foster more positive relationships with tenants, even if you do charge application fees.
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