Info About That Annoying Application Fee

April 13th, 2009 by

More than a few landlords charge an application fee for prospective tenants. If you’re looking at more than one apartment, though, those application fees can add up quickly. But you don’t have to take those fees at face value.

An apartment manager uses application fees to cover the cost of making sure that a prospective tenant won’t cause trouble — it goes to pay for a credit check and any other tenant screening the landlord deems necessary.

But application fees aren’t supposed to actually make a landlord any money, and most states have limits on how much you can be charged when you fill out a rental application. In most cases, the typical application fee is between $25 and $35 dollars, and you should be able to get a list of exactly what a landlord is planning to check out when you pay the fee.

It’s worth noting that you don’t have to pay application fees: Ruth Thaler-Carter has lived in apartments all over the U.S. and has never paid a single application fee. Ruth says, “It’s not so much that I’ve refused to pay an application fee — although I would if it arose — as that I’ve never tried to rent from anywhere that charged one. If I see anything in an ad that suggests there would be an application fee, I just don’t apply for that apartment.” She’s still managed to find apartments that she’s liked and been comfortable living in.

In order to avoid application fees entirely, however, you may find yourself in the position of liking a particular apartment that you’ll need to pay an application fee just to start the rental process. However, most apartment managers will at least talk to you about options relating to that application fee.

For instance, some landlords are willing to waive the fee if you submit a copy of your credit report along with your rental application. Others will negotiate deducting the fee from your first month’s rent or your deposit. Not all landlords are willing to be flexible about application fees, but enough are to make asking worth your while.

If you feel that a property manager is misusing application fees — such as taking your money without actually running a credit report — you have a number of options, including reporting the situation to the Better Business Bureau and the local housing authority.

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18 Responses to “Info About That Annoying Application Fee”

  1. WeLoveOurResidents Says:

    You should mention in the article that things like this aren’t always negotioable, as waiving the fee for one prospect while charging for another would be a violation of Fair Housing. I think it’s irresponsible not to mention Fair Housing in some of the articles that are published here.

  2. Fair Housing Excuses Says:

    It seems like every time there’s a question about negotiating, apartment managers jump in and scream “Fair Housing!!!”

    This is a cover. It’s true that if an apartment negotiates in a biased way– i.e. they always give a better deal to one type of person over another– they could have concerns about Fair Housing.

    But the reality is that all of these “we don’t negotiate because of Fair Housing” policies are self-imposed by apartment management companies themselves because they don’t trust their leasing agents to be unbiased.

    There is no law that says they can’t negotiate… they just choose not to because their conservative attorneys feel it will keep them out of court.

    This is why it’s better to rent a house or in a small apartment building. Small landlords are more concerned about making economically rational decisions than worrying about someone coming after them for Fair Housing.

  3. Learn what fair housing means then speak Says:

    Listen to yourself first -giving a better deal to one person over another violates fair housing laws! Everyone has to be treated equally! fair – equal same thing! Of course some things can always be negotiated but there are over 20 protected classes in the U.S. how would a leasing agent know if one of the prospect (most likeley the one that was not offerd the better deal-bad luck)is part of a protected class and then finds out someone got a better deal than them they are going to think it is because of thier situation or protected class. Of course everyone wants to stay out of court. Better to be safe than sorry my momma always says.

  4. MissGrier Says:

    The reason why I can see myself somewhat agree with Fair Housing Excuses is because if you negotiate the application fee it is because you don’t want to pay it. Some people do not have an issue with paying the fee. If you do not ask how is it an unfair practice? The only people whopay the fee are those who agree, the only people who get a discount or waiver are those who request an adjustment. The old saying goes “closed muths don’t get fed”.

  5. MissGrier Says:

    The reason why I can see myself somewhat agree with Fair Housing Excuses is because if you negotiate the application fee it is because you don’t want to pay it. Some people do not have an issue with paying the fee. If you do not ask how is it an unfair practice? The only people who pay the fee are those who agree, the only people who get a discount or waiver are those who request an adjustment. The old saying goes “closed mouths don’t get fed”.

  6. Application fees Says:

    Input from someone in the industry:

    It cost apartment communities money to run application fees because they use a credit system which charges them for each application processed. The fees that we get charged are just as “annoying” to us as it is to residents.

    And yes, it is 100% against the Fair Housing Act to waive the application fee for one person that day but not another. All it takes is one prospect to go to the the Fair Housing Board with that complaint and the apartment community can end up losing losing thousands in a lawsuit. At the very least, it is a paperwork nightmare.

    These fees are not there to gouge you. They are there to help keep the property financially viable. In this current economic environment, MANY apartments are losing money every month because occupancies are low across the country. With all the apartments lowering their prices even more and more to compete, they have even less money to pay the mortgage, employees, office supplies, landscaping, etc.

    A note in general about the combative nature of these articles:

    Sure, some leasing agents or landlords can have a jerky attitude, but most of them time, when they do not waive your late fees / require a 30/60 day notice from you even though it’s an inconvenience, it’s not cause they want to be mean, it’s simply their job, and if they won’t do their job, they’ll get fired.

    Ever work in a customer service job where you get yelled at by a customer but you still have to be polite and courteous to them? Then you can probably understand what our job can be like ……. so if we are decent to you, please be decent to us.

    Signed,

    An Apartment Manager Who Always Looks After His Residents

  7. Application fees Says:

    MissGrier: I understand where you are coming from, and it is “fair” from a common sense point of view, but not from a legal one. With occupancies as low as they are, the owner’s are breathing down are necks yelling, “Why aren’t you getting rentals?!?!?!!” so some of us will take the risk that the Fair Housing Dept. won’t get a complaint to close a sale, but it still isn’t legal.

  8. Prospective Renter Says:

    Forgive me, but when I see some of the places I’m looking at are charging $100.00 “application fees,” my heart hardly goes out to leasing agents, managers, or landlords. If you’re having to fork over a c-note per tenant-evaluation, you need to file a B.B.B. complaint, yourself.

  9. Reed Says:

    Application fees are ridiculous. How could any business feel good about making potential customers pay for a CHANCE to pay them more money? If you think about it, that’s what really is happening, you are paying for a chance to get an apartment, and pay rent. Who in the right mind wants to pay a fee for the chance to pay more?

    Car salesmen don’t charge prospective buyers to test drive a car.

  10. Alex Says:

    Reed,

    Unfortunately, that’s not the same thing. A test drive would equate to a tour of the apartment. You aren’t charged for a tour. Car dealerships choose to eat the cost of getting a credit report on you for buying a vehicle, however.

    People complain about fees, but when the entire industry is doing it, or nearly, there really is nothing you can do. You can take your business elsewhere.

    People are so oblivious to how a free market works, that they think they deserve some sort of benefit. No one knows what apartment a is making per month per unit rented. What if they are eating other costs? As a consumer you have one choice, pay, or not to pay. Sure we can complain, but no apartment owes it to you to provide you with housing.

    Let’s stop being so demanding and maybe realize for once that the customer is NOT always right, and we vote with our wallets, so make economic choices and then the markets will change.

  11. Michelle Says:

    An application fee is definitely not ridiculous. It is an expected cost of moving into a new home. It does cost a lot of money to do the administrative work necessary to process an application: an application check, track down previous landlords to verify rental history, faxing and copying paperwork, etc. Also, an application fee often weeds out those who would not qualify. If there was no application fee, a landlord would get tons of unqualified applicants which would drive administrative costs up, resulting in having to increase rental rates to cover expenses.

  12. vanessa Says:

    My fiance and I will be living together for the first time after we’re married, we’ve settled on an apt that we both love visually as well as the amenities they have. The application fee is $350 $50 for each of us to be on the lease, $100 for processing, and $150 for… oh shoot I forgot the third thing. Well anyway, I was wondering if anyone had any advice about whether it sounds reasonable or not?

  13. Alexa Says:

    Michelle, you sound like a fool just like Alex. What qualifications should one need to rent (again) RENT an apartment besides having the money to pay? No paperwork should be done except background checks to weed out criminals. Since when did property management turn into psychology 101 where people without the necessary credentials are trying to intuit any given person’s actions based on past statistics.? So what I moved 3 times in the past 3 years. You don’t know why! So what my credit score is bad. Does that equate to being a thief? That’s what is wrong with this world now – considering the act of NOT making the next’s person’s life more difficult than it already is, a freaking charitable service!

  14. Avera Says:

    I had no past landlords to “check”…nobody to “track down” and I could have easily obtained my own FREE credit report to show….in lieu of the application fee. Also because I had to put my present roomie’s name down as a potential roommate because minus that I would have been rejected for being too “poor” (why is it legal to demand an income equivalent to three times the inflated rent….as long as the tenant knows they can pay…..who has a right to second-guess that…. especially with a STABLE housing history?????????) I would have been forced to pay ANOTHER $35 application fee, even though if we had a paper saying we were married we would have only had to pay $35. So I say it is greed that motivates this semi-legal (and maybe illegal) scam. In the seventies this never ever happened..no fee or background check and fraud from renters was NOT happening more then. Also this management company managed several apt. complexes and we also would have had to pay another $70 to the same company for a second apartment application….regardless of the fact that only one set of credit reports needed to be checked. Oh I also had my own police report handy and could’ve shown that..they are very reasonably priced. But they never tell you anything upfront….probably also due to greed….if customers could bring their own docs and save some money you know who would be feeling cheated. Fortunately the roomie and I both share ownership in a paid-for house so I felt good in putting this greedy slumlord (the place was an overpriced shabby dump anyway and the manager had dim reviews on the internet) in their place. Everyone should have a similarly good back-up plan and then do the same!!!!

  15. Just to set the record straight Says:

    LISTEN-UP APARTMENT MANAGERS! Fair housing laws prevent an apartment manager/employee from making decisions based on a renter’s race, color, familial status, handicap, etc. IT IS NOT A FAIR HOUSING VIOLATION TO MAKE A SPECIAL DEAL WITH A RENTER IF THE REASON FOR MAKING THE SPECIAL DEAL IS NOT BECAUSE OF RACE, COLOR, ETC. For example, apartment managers can charge a low deposit based on a high credit score and a high deposit based on a low score. The reason there is credit worthiness, not race, etc. Likewise, an application fee can be waived as long as the reason for doing so is not because of race, etc.

    IT MAY BE THE POLICY OF AN APARMENT MANAGER TO NOT MAKE A SPECIAL DEAL WITH ANY RENTER. This is because a second renter who does not get the same special deal as the first could try to try to claim that they were denied because of their race, etc. Nevertheless, AS LONG AS THE REASON FOR MAKING OR DENYING THE SPECIAL DEAL IS NOT BECAUSE OF RACE, ETC., FAIR HOUSING LAWS ARE NOT VIOLATED.

  16. Fairhousingisirrelevanthere Says:

    Eactly!! Fair housing ONLY means that landlords can’t use the tenant’s race, gender, etc against them when determining if they will give them the rental. It’s “illegal” to waive a fee but completely legal and highly frequent to charge one tenant more money based on their pretty much useless credit score and give the next tenant a lower one because theirs is twenty points higher?? News flash: you’re completely contradicting yourselves. If you can’t waive a fee, you can’t charge varying deposits for the same apartments!

  17. BSMeNot Says:

    It’s greed and little else. I’ve lived in large apartment complexes that charged me all sorts of up-front fees for so-called credit and background checks and once there I only wondered why. I’ve seen people cuffed and stuffed in these places, had people playing bongos and tambourines at three o clock in the morning right next door and having loud, disco type parties only to have the management not care an iota and do absolutely nothing. I lived in one such place only to find out it was ‘mixed income’, and there were people all around me who didn’t work and were up all night being a nuisance. In yet another place, it was the management itself hosting a loud, obnoxious poolside party where my walls were actually vibrating! The online reviews on these ‘ideal, if you lived here you’d be home by now’ places only speak for themselves. I’ve since learned to stick with the smaller, out of the way places that offer little to no amenities but a clean, quiet, safe to place to live at a reasonable rate. Who needs a pool you’re only going to drown in anyway, for lack of sleep. I’ve always worked long hours and been gone on weekends as my job dictates so it’ doesn’t make sense to pay somebody untold moneys for what amounts to a flashy, noisy cell where I’m hardly at, anyway.

  18. input from a tenant that hates application fees Says:

    I avoid application fees at all costs. As much as Managers charge just to “rent” an apartment, you would think they would absorb a meager cost to get a good tenant in their space. It would do justice if potential tenants told some of these stupid managers where they can shove their ridiculous application fees and deposits, because trust me, if they can rip you off in the end, they certainly will; and they are all pretty much a bunch of crooks anyways. The last place I was at charged me a ridiculous 400$ deposit, and then went bankrupt three months later. I never recovered my deposit and, the new company although ran by the same manager claims they do not have to pay the old companies bills. WHAT A BUNCH OF RATS these managers/owners are!!!

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