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Prospective Tenants and Screening Fees: What An Owner Can And Cannot Do


The amount of the screening fee cannot be greater than the actual out-of-pocket costs of gathering information concerning the applicant, including, but not limited to:

1. The cost of using a tenant screening service or a consumer credit reporting service, and
2. The reasonable value of time spent by the owner or his or her agent to obtain the information.

The initial law provided that in no case, however, can the amount of the application fee charged by the owner be greater than $30 per applicant. This fee may be adjusted annually by the owner commensurate with an increase in the Consumer Price Index. As of December 2011, the adjusted rate is $43.54.

Unless the applicant agrees in writing, the owner cannot charge a fee when he or she knows or should have known that no rental unit is available at that time or will be available within a reasonable period of time.

The owner must provide the applicant with a receipt for the fee paid by the applicant. The receipt must itemize the out-of-pocket expenses and the time spent by the owner or his/her employees to obtain and process the information.

If the owner does not perform a reference check or does not obtain a credit report, the owner must return any amount of the fee that is not used.

If a fee is paid and if a request is made by the applicant, the owner must provide a copy of the credit report to the applicant.

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