While most state laws impose no limitations, many do, and landlords must be careful if they charge additional tenant screening fees.
Even in states with no stated limitations on rental application fees, landlords must keep the fees “reasonable”—a term defined by whatever judge hears your case if an applicant files a complaint against you.
Tips for Landlords Who Charge Rental Application Fees
The easiest way for landlords to protect themselves is to charge tenant screening fees directly to the applicant. Our tenant screening service offers this option, and you can check a box to choose which screening reports you want to be included along with your rental application.
But for landlords who charge application fees directly to applicants, here are a few tips to keep you on the right side of your local landlord-tenant laws.
Maintain Transparency And Good Communication
Always be direct and upfront about rental application fees. Explain what the fee will be used for in application forms or in person.
Be open to reasonable questions regarding your application process, and clear up anything that has a chance of being up to interpretation.
Be Clear With Refund Policies
Most rental application fees are non-refundable, and most landlords and tenants know that. However, the word “most” won’t save you from a lawsuit.
So, always indicate your rental application refund policy in any formal or informal communication. And make sure it matches with state laws!
Don’t Profit Off Application Fees
Let’s face it: renters are savvier today. They have access to information galore on tenants’ rights. Even though many states do not have declared limitations, many have an undertone of “fair and reasonable.”
This means that charging an exorbitant fee may be challenged in court. Is that few bucks worth the possibility of a lawsuit with fines?
Stay on Top Of Updates
Ignorance is never a worthy plea. Laws change often. And as fast as technology moves is as fast as a legal problem can arise. It only takes one complaint and one win to set a precedent. It cannot hurt to routinely look into the Fair Credit Reporting Act and your State’s Landlord Tenant laws.
Keep It Straight Across The Board
The last headache any landlord wants to deal with is a landlord discrimination suit. Most landlords don’t think of themselves as discriminating, but lawsuits are often brought against a non-discriminating landlord for something miscommunicated or misconstrued.
Make sure you treat every applicant and rental seeker the same. These days, you must even be careful of turning someone away over a criminal background, which HUD protects.
Keep All Your Documents
Hold onto your rental applications in a safe and secure environment. Some officials suggest holding them for ten years. Additionally, keep track of all correspondence between yourself and potential renters.
Do not let the rules and regulations, red tape, and hoops jump through scare you from screening your tenants. Tenant screening is potentially the most important task to protect you and your investment. It separates the landlord from a tenant eviction debacle that can cost thousands of dollars and a huge headache.
