Over CDIA’s objections and attempts to amend the legislation, Colorado passed, in 2019, the Rental Application Fairness Act (H.B. 19-1106). In general, the law prohibits a landlord from charging “a prospective tenant a rental application fee unless the landlord uses the entire amount of the fee to cover the landlord’s costs in processing the rental application. The landlord’s costs may be based on: (a) The actual expense the landlord incurs in processing the rental application; or (b) The average expense the landlord incurs per prospective tenant in the course of processing multiple rental applications.”
This law is a problem for landlords, tenants who want safe buildings, and residential screening companies that help keep buildings safe. In Colorado, criminal checks are more expensive than in other states because of the way the criminal search system is established by courts.
Boise, Idaho is among the latest entrants in the drive to cap application fees for rental housing. In December 2019, the Boise City Council finalized the passage of an ordinance Tuesday puts a $30 cap on fees to apply for renting an apartment or house, says landlords can only advertise and take applications for units that will be available in “a reasonable time period,” and requires property owners to provide a receipt for how the fees would be used. The ordinance, ORD-56-19, amended Title 5 (Public Safety) by adding a new chapter, Chapter 16, Residential Rental Application Fees, is referenced in a media story, Boise passes ordinance capping rental app fees at $30.
The drive to cap fees on residential applications could pose safety risks to the buildings, apartments, and people within. Landlords often need to conduct thorough background checks and tenants expect landlords to do just that. Driving down fees, when background check costs remain high, could limit the breadth of checks landlords conduct on prospective tenants, thus exposing people and property to higher rates of crime and damage.
Eric J. Ellman is Senior Vice President for Public Policy and Legal Affairs at the Consumer Data Industry Association (CDIA) in Washington, DC. He also served for eight months as Interim President and CEO of the Association. More