State-by-State Guide to Rental Application Fees

When renting out a property as a landlord or property manager, application fees are a key part of the process, but they are regulated in many areas. Learn how rental application fees and the laws regarding them can affect you as a landlord. 

If you’re in the process of renting out your property, there are many details to arrange. Inspections, move-in and move-out dates, and the numerous fees that come with moving a new tenant into a property are all important elements to consider. However, depending on your location, there are restrictions on what fees can be charged to prospective tenants.

There are several states with special restrictions on rental fees, and their rules vary greatly. Some states restrict application fees, screening fees, and other similar costs. These laws are different from state to state (or municipality), and can be confusing to navigate without help. Fortunately, there are numerous resources available to help streamline the charging and use of these fees. 

It is essential to familiarize yourself with the laws in your area, both for your own well-being and that of your tenants. These laws change frequently, so it is also important to be aware of potential changes. 

While application fees and screening fees are often believed to be interchangeable, they are considered distinct by some jurisdictions. For example, New York’s laws regulate the charging of fees for the review or acceptance of an application, but they do not prohibit fees for tenant screening. 

States That Restrict Rental Fees: 

According to the National Consumer Law Center (NCLC), some states, although not regulating specific fees, have general regulations that apply to any fees a landlord may place on their tenants. These regulations include: 

States that require fee disclosure: 

States that limit all fee amounts: 

Other fee regulations

  • New York: A landlord can only charge fees for tenant screening 
  • Oregon: A landlord can only charge fees for tenant screening

Some of these states have additional laws about specific fees in addition to the general laws, but some remain nonspecific. 

States That Restrict Rental Application Fees:

The NCLC article also reports that there are a number of states placing restrictions on application fees. These laws vary in their details, but all are designed to regulate how much a landlord can charge for applying to rent out a property. The states that regulate application fees are as follows: 

States that limit application fee amounts: 

States that prohibit application fees: 

States that require the disclosure or documentation of application fees: 

  • Virginia
  • Colorado

Other application fee restriction: 

  • Maryland — Any prospective tenant fees, except for screening fees, that are more than $25 need to be refunded within 15 days of deciding whether or not the tenant moves in

These regulations vary significantly, with some outright banning application fees, such as Vermont. Some, like California, place limits on the amount that can be charged, and others give renters the right to request a receipt for their fees. The limits on fee amounts also vary based on location. Virginia, for example, has a maximum application fee of $50. Colorado, on the other hand, does not place an explicit limit on application fees, but states that they must be used for the purpose of covering the landlord’s expenses in processing the application. Minnesota also requires the disclosure of all required fees. 

Learn more: How to Collect Rental Application Fees Online 

States That Restrict Rental Screening Fees:

While some states don’t restrict application fees, the NCLC report indicates that many states restrict how you perform tenant screening and how it is charged. Of course, some laws restrict the amount you can charge, but there is more to it than simple charges. Some states require landlords to accept reusable tenant screening reports, provided they have been performed recently. Others require a landlord to provide an itemized receipt of the screening costs. States with laws on screening fees are as follows: 

States that limit the amount you can charge for screening fees: 

States that require disclosure or documentation of screening fees: 

  • California
  • Connecticut
  • Maine
  • Minnesota
  • New York
  • Rhode Island
  • Hawaii
  • Oregon

States that require acceptance of reusable tenant screenings: 

States with other laws regarding rental screening fees: 

  • California: Landlords cannot charge for screening fees when they do not have a unit available, unless the tenant provides a written agreement to it
  • Hawaii: Screening fees must be refunded if not used within 30 days
  • Maine: A landlord cannot charge an individual for screening more than once in a 12-month period
  • Minnesota: A landlord must refund a screening fee if it is not used or the tenant is rejected for a reason unrelated to the screening, and may not charge a screening fee when no unit is available
  • Oregon: A landlord may not charge a single applicant a screening fee more than once in a 60-day period and must return the fee within 30 days if someone else moves into the property or the landlord doesn’t use the fee 

These regulations include being willing to provide copies of screening reports to prospective tenants, limiting the amount you can charge for screening, and requiring you to disclose the screening of a tenant. Other laws exist, such as allowing the reuse of screening reports, returning fees if not used for any reason, and, in the case of Maine, landlords are prohibited from charging their tenants for any kind of screening report more than once in the span of 12 months. 

Learn more: Rentec Direct Helps California Landlords Uphold New Security Deposit Laws

States That Restrict Rental Late Fees:

Another possible area of regulation when it comes to landlords collecting fees is late fees. Charging tenants extra when they miss rent or other payments can carry with it additional restrictions. The states that restrict or ban late fees are: 

States that limit the amount you can charge for late fees: 

States that require disclosure of late fees:

  • Minnesota
  • Nevada
  • Oklahoma
  • Kansas
  • Kentucky
  • Virginia
  • Wisconsin

States that restrict when you can charge late fees:

  • Colorado
  • Louisiana
  • North Carolina
  • New York
  • Tennessee

Some of these states require late fees to be written into the lease agreement, such as Colorado. Others limit the amount that you can charge, and others still have limits on how late a payment has to be in order to charge a late fee. 

States With Additional Application or Screening Fee Restrictions: 

While application fees, screening fees, and late fees are the ones most commonly regulated, several states restrict other forms of rental fees. Virginia, for example, prohibits landlords from charging service, electronic payment, or other transaction fees. As another example, Colorado limits the amount you can charge a tenant for pet rent. Many states simply have a disclosure requirement, stating that any fees the tenant may pay must be disclosed in the lease. Each location has specific requirements and details stated in the wording of its laws that should be understood. 

These laws can include limitations for pet rent and security deposits, protections for service and support animals, and utility fees, among others. As with the previous sections, laws change depending on the state, and some cities and counties may have additional regulations. 

Learn more: What to Know About Charging Payment Processing & Convenience Fees

Final Thoughts: 

There are numerous state laws placing requirements and limitations on rental fees, meaning that landlords in each of these states must ensure they are always in compliance with additional legislation. As these laws are only statewide, there may be differences in local laws based on your municipality. It is always important to be aware of your local laws. If you are unsure about them, contacting a legal professional is the best decision.