Application Screening Fee
The law allows the landlord to require a tenant to pay an application screening fee, in addition to the security deposit.90 The application screening fee is not part of the security deposit. However, any other fee charged by the landlord at the beginning of the tenancy to cover the landlord’s costs of processing a new tenant is part of the security deposit.91 Here are examples of the two kinds of fees:
• Application screening fee—A landlord might charge the tenant an application screening fee to cover the cost of obtaining information about the tenant, such as checking their personal references and obtaining their credit report. The application screening fee is not part of the security deposit. Therefore, it is not refundable as part of the security deposit.
• New tenant processing fee—A landlord might charge the tenant a fee to reimburse the landlord for the costs of processing the tenant as a new tenant. For example, at the beginning of the tenancy, the landlord might charge the tenant for providing application forms, listing the unit for rent, interviewing and screening the tenant, and similar purposes. These kinds of fees are part of the security deposit.92 Therefore, these fees are refundable as part of the security deposit, unless the landlord properly uses the deposit for a lawful purpose.
90 Civil Code Sections 1950.5(b).
91 Civil Code Section 1950.5(b).
92 Civil Code Section 1950.5(b).
This is a blog post for Real Estate Professionals, Investors, Landlord, Property Manager, and Property Management Companies. Tenants Guide to Application Screening and Tenant Processing Fees is brought to you by SimplifyEm Pay Rent Online and Property Management Software
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