Why do I have to pay rental application fees?
Updated: Sep 9, 2019
It can be overwhelming when you think about the costs you'll incur if you move from one rental to another. Some of the costs just can't be avoided, and that includes rental application fees. Let's talk about what these fees are and why you as a potential new renter need to pay them.
Landlords want to fully understand who they're considering as tenants. You may seem like a really nice person (and you probably are!), but property owners need to make sure there isn't something about your past that could have an impact on what you'll do once you move in. To get a better understanding of you, property managers will have you complete a rental application and pay the associated fees with it. Here's what it covers - some run all of these checks, some run only some of them, and others may not run any of them:
Background Check: a background check typically shows any criminal history a person might have - misdemeanors, felonies, drug charges, etc. Many background checks also show evictions on your record since they involve court proceedings. Anything that is a matter of public record (like a judgement against you) can also be found on a background check. Owners and property managers like to understand if a person could pose a threat to others before agreeing to rent to them. By being able to see if you've ever been evicted or if you have been sued in the past for not paying your rent, they may not consider you to be a safe risk as a tenant.
Credit Check: by running a credit check, a prospective landlord can get an idea about how responsible you have been with making payments. The owner will be able to see how much debt you are currently carrying (car payments, credit cards, etc) and can use this in helping determine if you would be able to afford the rental you are considering. They can see if you pay your bills on time and if you have a habit of walking away from debt. If you've filed for bankruptcy, this will show up on a credit check as well.
Rental History Report: a rental history report includes information about your previous rentals. Many owners and property managers like to contact previous landlords to find out if they considered you to be a good tenant. They may ask questions like did you pay your rent on time, did you disturb other tenants, and did you cause damage to the home or the property. One of the questions that I like to ask is would you consider renting to this person again in the future.
The cost of running these checks varies, and once you pay the fee, they typically are non-refundable, meaning you won't get the fee back if you don't get the rental. Rules vary from state to state. Here in Florida, there is no maximum fee that can be charged for a rental application, but the state does suggest that property owners, managers, and landlords don't charge more than the actual cost of the screenings being run.
In addition to these screenings, many prospective landlords will request written documentation of your current employment. This can include a certain number of recent paystubs and/or several years of tax returns, especially if you are self employed. When applying, proof of your ID will be required, most likely in the form of a photo ID (driver's license, state identification card, or passport).
Before paying fees, be up front with the potential new owner or manager about your situation. Be honest about anything that will show up in your history - they're most likely going to find out anyway. This way, you can see if something in your past is a deal breaker before you pay any non-refundable money out of pocket!
What's your thoughts on rental application fees and the process of trying to secure a rental? Share your thoughts with us below.
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