Application Deposits For :
Credit Report Costs & Holding Rental Housing
Some rental property owners and agents require that tenant applicants provide a deposit of $200 or more to cover application screening fees and to hold a rental unit until their application and credit is approved. In most cases, the "holding portion" of the deposit is returned if the applicant is denied - and some landlords apply the screening fees to the first months rent if the applicant is accepted.
Many landlords with high quality property hire a tenant screening service to check evictions, credit, employment and references. Those costs usually range from $20 to $100 per person. Low-income landlords must also find a way to cover those costs, or do much of the work themselves.
If the tenant applicant withdraws their application because they found more suitable or less expensive housing, the landlord may elect to keep all or part of the deposit. Particularly if the landlord incurred an economic loss as a result.
When the landlord holds the rental unit for a tenant applicant, it is off the market and unavailable to other qualified prospective tenants who may have to be turned away. If the applicant later changes their mind, the property owner may have suffered financial harm in the form of a lost business opportunity. In such a case, the landlord is justified in retaining all or part of the holding deposit.
Landlords and agents should use good judgment and be fair in their deposit policy. An applicant whose holding deposit is retained without adequate justification may well have a cause of action for damages against the property owner.
In the event a landlord elects to retain a deposit with good cause, it is imperative that all records pertaining to the application be kept for at least two years. In fact, the applications of all prospective tenants should be kept the time period prescribed by law, generally three years. Keeping the application, with documents supporting any reason for refusal attached, will ensure that the landlord has good evidence if a rejected tenant later decides to bring a lawsuit or complaint charging housing discrimination View our example form.
Most professional property managers now consider allowing some pets, providing the tenant pays a pet deposit and signs a pet agreement.
Pet fees at apartments now range from flat fees of $20 to $700, and monthly surcharges from $6 to $25. The most often quoted monthly charge for a pet is $15. The average up-front fee is about $225, but the most often quoted fee is $100. High fees are usually for large dogs.
See our Pet Pages