How Much Should Landlords Charge for a Rental Application Fee?

Setting a rental application fee is one of the first operational decisions you will make when renting out your property. The problem with this? It’s very easy to get this wrong. Charge too much, and you risk turning away high-quality prospective tenants; charge too little — or nothing at all — and you may end up paying out-of-pocket for screening reports or processing unqualified applicants.

Keep reading to learn best practices on charging rental application fees, the actual dollar amount to charge, how landlord-tenant laws affect pricing, and more. 

What Is a Rental Application Fee and What Should It Cover?

A rental application fee is a non-refundable payment collected from prospective tenants when they submit an application for a rental property. Its primary purpose is to cover the direct costs and administrative effort required to thoroughly evaluate an applicant.

Generally, an application fee directly covers:

• Credit checks: Retrieving credit histories, credit scores, and outstanding debt balances through a reputable credit bureau.
• Criminal background checks: Reviewing national, state, and local criminal databases.
• Eviction history reports: Checking court records for prior unlawful detainer or eviction filings.
• Administrative processing: Time spent verifying proof of income, contacting past landlord references, and confirming employment details.

Misusing these fees or markup pricing beyond actual costs can result in tenant disputes, statutory penalties, or legal action under local consumer protection laws.

Average Apartment Application Fee by State

While $20 to $50 is the national average, actual application fees vary significantly across the country depending on local market standards, the tenant screening service you use, and state legislation.

In higher-cost markets or states with strict regulatory frameworks, baseline screening costs may be higher, whereas other regions maintain lower average charges.

Market / Region Type	Typical Application Fee Range	Primary Cost Factors
National Average	$20 – $50 per applicant	Standard credit, background, and eviction reports.
High-Cost / Competitive Urban Markets	$50 – $75+ per applicant	Comprehensive screening packages and higher administrative processing costs.
Regulated States (e.g., New York, California)	Statutory Cap (e.g., $20 cap in NY)	State laws restrict fees strictly to actual background check costs.
Low-Cost / Rural Markets	$25 – $35 per applicant	Basic credit checks or regional background pulls.

Always verify local landlord-tenant laws before establishing your fee structure, as legal limits continuously evolve.

Is the Application Fee Refundable?

In most circumstances, rental application fees are non-refundable once the landlord has incurred the expense of running screening reports or processing the application. However, whether a fee must be refunded depends on local laws and the specific circumstances of the application process.

An application fee should generally be refunded to the applicant if:

• The screening was not performed: You accepted a fee but selected a prior applicant before pulling credit or background reports.
• State law requires it: Certain jurisdictions require landlords to refund any portion of the fee that was not actually spent on background checks.
• The property was withdrawn: The rental property was taken off the market before the application was evaluated.

Clearly outlining your refund policy on the application form helps build trust and avoids misunderstandings. 

How to Stay Compliant With Fair Housing Act Requirements

Setting and collecting application fees must be done in strict compliance with the Fair Housing Act to prevent unlawful discrimination. As a landlord, you must apply identical screening standards and fee structures to every applicant to maintain a fair, defensible process.

You can do this when handling application fees by doing the following:

1. Standardize the charge: Charge the exact same application fee to every adult applicant (18 and older) applying for the property.
2. Apply consistent criteria: Never waive or lower fees for specific individuals based on race, color, national origin, religion, sex, familial status, or disability.
3. Provide clear written disclosures: Outline non-negotiable screening criteria — such as minimum credit scores or income requirements — before collecting a fee.
4. Keep itemized records: Maintain receipts and documentation showing the actual out-of-pocket costs incurred for each background check.

Should Landlords Accept Portable Screening Reports?

A portable tenant screening report (also known as a reusable tenant screening report) is a comprehensive credit and background report prepared by a consumer reporting agency at the renter’s expense, which the renter can share with multiple landlords within a 30-day period.

An increasing number of states and municipalities now require landlords to accept reusable screening reports or waive the application fee if a qualified report is provided.

Accepting portable screening reports offers distinct advantages:

• Reduced friction: Applicants can apply without paying repetitive fees, leading to higher application completion rates.
• Faster tenant placement: Applicants arrive with verified screening data ready for immediate review.
• Lower administrative overhead: Landlords save time coordinating individual report purchases.

When reviewing reusable reports, ensure the documentation includes credit history, nationwide criminal background checks, and eviction records from a reputable reporting agency. 

Frequently Asked Questions: Rental Application Fees

How Much Should a Landlord Charge for a Rental Application Fee?

Most landlords charge between $20 and $50 per adult applicant. This range directly reflects the actual out-of-pocket costs charged by credit bureaus and screening services for comprehensive credit, criminal, and eviction background checks. 

Charging within this standard range helps ensure you cover screening expenses without pricing out qualified applicants.

Is It Illegal to Charge an Application Fee for an Apartment?

No, charging an application fee is legal in most states, provided the fee directly covers legitimate tenant screening costs and adheres to local statutory caps. 

However, certain states — such as New York — impose strict legislative caps (e.g., capping fees at $20 or the actual cost of the background check), making it vital to check your local landlord-tenant laws before setting a fee.

Should Landlords Collect an Application Fee Before a Tenant Views the Apartment?

Best practice dictates collecting application fees only after a prospective tenant has physically or virtually toured the unit and decided to formally submit an application. 

Demanding application fees prior to a showing often creates friction, raises scam concerns among renters, and violates regulations in certain local jurisdictions.

Are Rental Application Fees Refundable?

Application fees are typically non-refundable once you have processed the application and paid third-party vendors for credit or background reports. 

However, if an applicant pays the fee but you decide not to run their background check, for instance, if you accept a prior applicant first, you should refund the unused screening fee immediately.

Do All Adult Applicants Need to Pay a Separate Application Fee?

Yes, every adult occupant aged 18 and older who intends to reside in the rental property should ideally submit a separate application and screening fee. 

Running individual reports ensures you evaluate the complete financial and background history of every adult legally responsible for the lease.

What Does a Rental Application Fee Actually Cover?

A rental application fee covers third-party verification expenses, including TransUnion credit reports, nationwide criminal history, and court eviction records. 

Additionally, it helps offset the administrative time required to manually verify employer references, confirm employment details, and contact previous landlords.

Simplify Your Tenant Screening With Avail

Determining the right application fee comes down to balancing your actual out-of-pocket costs with local legal requirements and applicant transparency. By keeping fees aligned with background check costs, applying policies consistently across all applicants, and disclosing criteria upfront, you protect your rental business while building trust with prospective tenants.

Managing applicant fees and background checks doesn’t have to be complicated or time-consuming. With Avail, independent landlords can streamline the entire tenant screening process with complete confidence.

Avail makes it easy to:

• Request comprehensive screening reports: Access TransUnion-powered credit history, nationwide criminal background checks, and eviction reports with a single click.
• Collect digital applications: Send customizable online rental applications or allow renters to apply directly from your listings.
• Maintain full compliance: Utilize state-specific, lawyer-reviewed lease agreements and screening workflows built to keep you compliant with local regulations.

Ready to save time and take the guesswork out of tenant screening? Create your free Avail account today to manage your rentals with total confidence.