A guide to understanding rental application fees

Renting a new home often goes hand-in-hand with navigating a multitude of expenses, including rental application fees. For many prospective tenants, these fees can be a source of confusion and frustration. Understanding what these fees entail and why they are charged can make your rental journey much easier. In this guide, we’ll shed light on rental application fees, their purpose, typical costs, and tips to help you manage these expenses effectively.

What is a rental application fee?

When you apply for a rental, your landlord or property manager will charge you a one-time rental application fee. The fee covers the administrative costs associated with processing your application so landlords can verify your credit history, rental history, employment status and can conduct background checks for criminal records or eviction history. 

While you may not be thrilled that you have to pay this fee, it’s important to recognize that landlords and property managers aren’t just trying to pocket some extra money. Charging you this fee enables them to make an informed decision about whether or not to approve your application. Knowing that your landlord is running thorough tenant screenings should give you peace of mind that fellow tenants have gone through the same process and therefore are likely to be respectful neighbors. The application fee also covers administrative expenses incurred during the application process, such as paperwork, staff time, and other related tasks.

Who’s responsible for paying the rental application fee?

Each applicant whose name is listed on the lease agreement is responsible for paying the application fee. Some landlords however, may choose to waive the fee for secondary renters who are a co-tenant or a subtenant. Nevertheless, the secondary renter's obligations, such as their share of the rent and other responsibilities, are usually outlined in a separate agreement or arrangement with the primary tenant.

How much should I expect the rental application fee to cost?

The cost of rental application fees varies widely and depends on various factors such as location, property type, and management company policies. On average, these fees can range from $25 to $75 per applicant. Some landlords might charge higher fees to cover more extensive screening processes or if the rental market is highly competitive.

While some states have application fee minimum and maximum caps, others have few regulations and some states don’t allow them at all. In Vermont and Massachusetts for instance, it’s illegal for landlords to charge an application fee. To make sure you aren’t being overcharged, be sure to check your local rental fee application laws that govern your specific state. 

When do I pay the application fee?

The rental application fee is due when you submit your application. Details about the amount, how it can be paid, the deadline for it, and whether or not it’s refundable should be included on the application. 

Is my application fee refundable if my application isn’t accepted?

Typically, rental application fees are non-refundable, meaning they won't be returned regardless of whether the application is approved or rejected. Some landlords may offer refundable fees to encourage more applications or as a gesture of goodwill toward applicants who were not approved for the property. To avoid any confusion, it’s advised to confirm with the landlord or review the terms of the application before submitting payment. 

Is there any way to avoid paying a rental application fee?

It's typically not advised to avoid paying the application fee because you want a landlord or property manager to conduct a thorough investigation. If you have trouble paying for multiple application fees, local housing organizations might be able to provide financial assistance like stipends or grants to help cover these expenses. Be aware that just like application fees vary from state to state, so does the opportunity to apply for aid. 

Is there a penalty for mishandling a rental application fee?

If you believe your rental application fee has been mismanaged, it may result in serious penalties for your landlord. Your landlord may be liable to pay damages to you and will likely be responsible for paying attorney fees if you decide to take this matter to court.

Tips for navigating rental application fees 

Navigating application fees can be complicated. But with the following tips, you can make the process smoother and stress-free. 

Keep an eye out for fraudulent activity with fees

Pay attention to any warning signs indicating potential fraudulent behavior from the landlord regarding the fees. For example, if the application fee seems unusually high compared to averages in the area or exceeds the normal range without reasonable justification, the landlord might be exploiting you.

Don’t feel pressured

A landlord who pushes you to pay fees without providing adequate documentation or time to review the application could suggest a scam. Legitimate landlords usually allow applicants sufficient time to review any applications or agreements and understand the terms before making payments. 

Ask for a breakdown of what the application fee covers

A lack of clarity or refusal to provide details regarding what services the application fee covers could be a red flag. If a landlord tries to evade any questions about the fee structure, it may suggest a lack of transparency or hidden costs. 

Prioritize applications based on your preferences

Instead of scattering applications across multiple properties and paying separate fees for each, focus your efforts on properties that align with your preferences and have a higher chance of approval. Prioritize properties that meet your criteria in terms of location, amenities, and budget to avoid having to pay for multiple applications all at once. 

Keep records

Maintaining meticulous records during the application process is vital. Retain copies of all documents submitted, including the rental application, proof of income, identification documents, and any correspondence exchanged with the landlord or property manager. Additionally, keep receipts for every application fee you’ve paid. These records serve as valuable references and can be crucial in case of disputes or inquiries during the application process.

Take the opportunity to negotiate

Under certain circumstances, you may be able to negotiate the application fee. If you have a strong rental history, excellent credit score, stable income, or if the property has been vacant for an extended period, it could be worth discussing the application fee with the landlord or property manager. While a potential reduction is not a guarantee, it doesn’t hurt to initiate a conversation about the fee to see if your landlord or property manager is willing to negotiate. Remember to approach negotiations respectfully and be mindful of the landlord's policies and market conditions.

Pay via a secure payment platform

Secure platforms provide encryption and protective measures that shield sensitive data, such as your credit card or banking information, from potential cyber threats or unauthorized access. When you make your rental application fee payment, make sure it’s through a trusted payment platform so your financial information is protected. 

The bottom line

A rental application fee might seem like another expense you don’t want to deal with on top of the security deposit, moving fees, and other costs associated with moving. As overwhelming as it might be to pay for one more thing, know that it’s ultimately for your benefit and security in landing the best rental property available. 

To make the application process easier, consider using a platform like RentSpree. With RentSpree, you can manage your application from start to finish and trust that your payment information is secure when paying the application fee. Start your rental journey with RentSpree today.