Property Manager’s Guide To Rental Application Fees

While charging rental application fees is fairly standard, there are certain laws around collecting them, no matter how small. You must comply with state-specific and local laws to avoid legal trouble—we promise, non-compliance isn’t worth the small amount you’d collect.

So, what exactly are rental application fees? Simply put, they’re upfront charges applicants pay to cover the cost of activities associated with tenant screening, like credit and background checks, fraud detection, and the administrative time required to process an application.

But you can just throw out a random number and call it a day. Charge rental application fees that are too high, and you risk scaring away qualified tenants. Don’t charge enough, and you might be left paying some of those costs yourself.

Plus, state and local laws often regulate what you can and can’t charge. Why? Because application fees aren’t about generating revenue.

By charging fair rental application fees, you create a transparent and honest tenant screening process that protects your business while building trust and confidence with applicants.

Our guide is breaking down exactly what rental application fees are, typical fee ranges, legal considerations, common pitfalls, and best practices to keep your process compliant and transparent. 

Quick Insights

• Rental application fees typically range from $25 to $75 per applicant, with a national average of around $30.
• It’s a best practice to only charge actual screening costs, like credit reports, background checks, and admin time—don’t try to make extra revenue. In some states, it’s illegal to make a profit.
• State laws vary widely, with some capping fees and others banning them altogether.
• Some municipalities have their own rules, like imposing additional restrictions or caps on fees.
• Always clearly disclose application fees in writing, provide itemized receipts, and stop collecting once a unit is no longer available.
• Some common mistakes to avoid include overcharging, treating fees as a profit, inconsistent fees, and failing to update policies as laws change.
• Alternative application fee processes exist, like fee-upon-approval models, applicant-paid third-party screening services, and free applications.
• Clear and transparent communication through listings, lease documents, and helpful FAQs builds trust with applicants and keeps your process compliant.

Understanding Rental Application Fees 

Rental fees are a one-time charge that potential residents pay when they apply to live on a property. These fees help cover the costs of making sure applicants are who they say they are and that they can reliably pay rent.

• Background checks. A chunk of the rental fee covers background checks, which involve verifying rental history, uncovering any past evictions, and flagging any criminal records.
• Credit reports. Credit reports show whether an applicant has a good track record (or not) of managing their finances responsibly and whether they’d pay their rent.
• Admin. The admin side includes things like the time, paperwork, and systems involved in reviewing every application. 

Multiply these costs by dozens or hundreds of applicants for a multi-family property, and you can see how the costs can pile up fast.

Refundable vs. Non-Refundable Rental Application Fees

Most property managers charge non-refundable application fees—the applicant won’t receive that money back regardless of the outcome. Refundable rental application fees are less common.

In some cases, landlords or property managers may return the costs if they don’t process the application or rent out the property before screening begins.

Let’s be honest—applicants don’t love paying an application fee. But when you’re clear and upfront about why you have one and what it covers, it feels less like a “junk fee” and more like an investment in a safe community and quality property. 

After all, tenant screenings are in place to protect everyone—including your business, residents, and neighbors. 

How Much to Charge: Industry Standards and Trends

So, how much can (and should) you charge? Let’s dive into the numbers. Across the country, most rental application fees range from $25 to $75 per applicant, with an average fee of $30. 

But with stiff competition or added screening requirements, fees can climb past $100. Urban properties in high-demand markets typically require higher costs due to their density, competition, and high volume of applications. Suburban or lower-density areas often have rental application fees on the lower end.

So, what’s baked into that fee? Two big cost categories drive it:

1. Screening service provider fees. These are the costs associated with pulling a credit report, verifying background or rental history, and using any fraud detection tools, like Snappt.
2. In-house admin costs. These fees relate to the overhead time your team spends vetting, processing, calling references, and handling paperwork.

Balancing these costs helps you calculate a fee that fairly covers your expenses and doesn’t feel exploitative. 

Here’s a real-world example: Real estate marketplace Zillow Rentals offers free application and tenant screening reports for landlords. Renters pay a $35 application fee, which includes tenant screening reports, and allows them to apply to an unlimited number of participating rentals for 30 days.

Keep in mind that large property management firms sometimes charge a layered fee structure. For example, on the more expensive side in the Houston area, some property companies tack on an additional $150 administrative fee to the $65 application charge.

But these bundled or hidden fees are sometimes dubbed junk fees in the media and can deter good tenants from applying.

Legal Considerations by State and Municipality

Rental application fees are heavily regulated by the law and can vary by location. Here’s a quick snapshot of how some states and municipalities handle tenant application fees.

Strict State Caps and Bans on Rental Application Fees

These states stand out for their strict state caps and even bans on application fees:

• California caps rental application fees at $64.50 in 2025. You can’t profit from the fee and must provide an itemized receipt of the services if requested.
• New York limits fees to $20, and you must waive them if the applicant provides a background or credit check from within the last 30 days.
• Massachusetts prohibits landlords from charging rental application fees unless you’re a licensed real estate broker.
• Vermont also bans landlords and property managers from charging rental application fees.

“Cost-Only” States

In states like Maine, Minnesota, and Washington, you can only charge what screening actually costs. Landlords and property managers can absolutely not make any profit from rental application fees in these states.

If you decide to charge more than the actual costs, you’re legally required to refund the excess fees. 

Municipalities

These municipalities all have their own specific rules surrounding rental application fees. 

• Seattle, Washington, caps the combined non-refundable application and cleaning fees at 10% of one month’s rent. The fees must reflect the actual screening costs. If the actual screening cost is more than 10%, you can request the extra amount if the charge is consistent with the standard cost of screening in Seattle, but you can’t charge tenants for cleaning at the end of the rental agreement if you charge for it at the start.
• Bellingham, Washington, on the other hand, caps rental application fees at $50 plus the consumer price index (CPI).
• Portland, Oregon, doesn’t enforce application fee caps. However, it’s FAIR Ordinance mandates a first-come-first-served screening policy, prohibits income thresholds, and promotes low-barrier screening practices. 

Laws shift often and fast. For current guidance and to stay up-to-date, follow:

• TenantCloud’s application fee laws by state (updated in 2025)
• Nolo’s landlords and tenants resources
• Your state and local housing agency
• Tenant advocacy groups, like Greater Boston Legal Services or city-specific agencies

Best Practices for Fee Transparency and Compliance

When it comes to rental application fees, transparency is key. Potential tenants are more likely to accept and trust the process if they know exactly what they’re paying for. 

Here are some best practices to keep in mind:

Always disclose fees in writing. Clearly list the fee amount on your rental application form and in any online listing. If the payment is non-refundable, state it plainly to avoid any misunderstandings further down the line.

Only charge actual costs. Rental application fees aren’t supposed to be a revenue stream. They should reflect the real cost of the screening—covering credit checks, background reports, and staff time. If you collect more than you spend, it’s best practice to refund the difference. In some states, it’s required by law.

Provide receipts and breakdowns. Show applicants where their money is going. For example: $25 background check, $20 credit report, $10 administrative fees.

Stop collecting fees once the unit is unavailable. Charging applicants after a rental is off the market isn’t just unfair—it’s unethical and wastes time. It can also be illegal in certain states. Proactively close applications once a unit is no longer available.

Use clear, compliant wording in your application form. For example, “A non-refundable $50 application fee is required per adult applicant. This fee covers the costs of a credit report, background check, and administrative processing. No fees will be collected once the property is unavailable.”

Red Flags to Avoid: Common Mistakes Property Managers Make 

Even the most honest and experienced property managers and landlords can slip up when it comes to navigating rental application fees. But small mistakes can quickly lead to compliance issues, unhappy applicants, or even legal headaches. 

Here are a few common mistakes to keep on your radar:

Charging fees without a legal basis or explanation. Collecting fees without clearly disclosing them—or charging more than laws allow—is a big risk. Always be upfront about what applicants are paying for and check your local regulations before setting fees.

Treating fees as profit-makers. Rental application fees are meant to cover actual screening costs, not pad wallets. Using them as a money-maker can frustrate qualified tenants, which isn’t a good start for building a strong and healthy tenant-landlord relationship. It also draws negative attention from regulators and the media.

Failing to update policies. Rental laws are constantly shifting. What was legal a year ago may not fly today. Make it a habit to do the research and revisit your fee structure at least annually, or sooner if your state or city updates landlord-tenant laws.

Inconsistent or discriminatory fee practices. Charging different applicants different fees for the same property is a no-go. So is waiving fees selectively in ways that could be seen as biased. Stay compliant with fair housing laws with consistent, transparent policies you can apply equally to all tenants.

Alternatives and Workarounds: Creative Screening Solutions

There are various ways to manage rental application fees, all while keeping processes fair and compliant. While you must comply with local and state laws around these fees and avoid discrimination, you don’t need to follow a one-size-fits-all approach.

Check out a few alternatives.

Fee Upon Approval Model

With this approach, you only collect a fee once you approve an applicant, not before. It lowers the barrier to apply, but you’ll need to front the screening costs until approval. This model spreads the risk, but it isn’t ideal if you often receive a lot of requests.

Free Applications with Conditional Charges

This setup means applicants can apply at no cost, but you’ll charge them when you’re ready to pull credit or background checks. It’s fair and ensures you only spend resources on serious applicants.

Third-Party, Applicant‑Paid Screening

Platforms like RentSpree or TurboTenant let applicants pay their own screening fees via trusted providers, removing fee handling from property managers. This method supports compliance and transparency, taking some of the work out of your hands.

But it also means giving up some control over the process.

Free Screening

Some managers forego fees completely—especially when the rent is high. It’s simple and inviting, but you take on all the screening costs, and it may attract less committed applicants.

Each model has its pros and cons. The key is to find a balance between accessibility and applicant satisfaction while protecting your budget and time and maintaining compliance. Choose a process that matches well with your screening volume, market rates, and values.

Communicating Your Policy Clearly 

Even the most carefully designed fee policy can cause headaches if you don’t communicate it clearly. Applicants appreciate openness and honesty, and regulators expect it, so making your policy visible and easy to understand should be a top priority.

Here’s what to include in your application and lease documents:

• The fee amount, including itemized costs
• Whether the fee is refundable or non-refundable
• What the fee covers (like background check, credit report, and administrative time)
• A note that you won’t collect the fees if the unit is no longer available

Including all this upfront keeps applicants from feeling blindsided later.

Recommended Language for Marketing Listings

When advertising your property online, a short, clear line works best when referencing your rental application fees. This simple wording sets expectations early and prevents confusion when prospects reach the application stage.

For example:

Application fee: $50 per adult applicant. Covers credit and background screening. Non-refundable.

Helpful FAQs to Build Trust

Many of the same questions often pop up about rental application fees. Consider adding a simple FAQ section to your website or application portal, including questions like:

• Why is a rental application fee required?
• What does the fee cover?
• Is the fee refundable?
• When do you collect the fee?
• How do you handle multiple applications?

Clarity benefits both sides. Applicants can better understand the process and get peace of mind that your fees are fair. You avoid disputes or claims down the line. Just a little extra communication upfront can save time and strengthen trust within your rental community.

Resources, Tools, and Templates

To make compliance and communication easier, here are a few free, ready-to-use resources:

• Rental Application Form Template by Landlord Studio
• Rental Brokerage Fee Disclosure for Tenants Form
• TenantCloud’s Application Fee Laws by State (Updated in 2025)

Why Getting Rental Application Fees Right Matters

Setting the right application fee—and communicating it clearly—helps protect your business while proving to applicants that you’re running a fair and transparent screening process.

Remember, the property landscape isn’t static. Laws shift, markets change, and applicant expectations evolve. That’s why it’s important to review your screening practices regularly and adjust policies as needed.

An application fee that was suitable a year ago may no longer be compliant—or competitive—today.

The goal isn’t just to cover expenses. Create a rental experience that’s efficient and trustworthy for everyone involved. Because clear disclosures, consistent policies, and compliance with local laws will get you a long way. 

And if you need additional support, get in touch with your local housing authority. Or to support your tenant screening process even further, explore how Snappt can help streamline applications while preventing fraud.