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Bill would limit rental-application fees

State senator believes they're too much
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Posted at 4:13 PM, Feb 18, 2021
and last updated 2021-02-18 19:51:08-05

HELENA — Bozeman state Sen. J.P. Pomnichowski says she began hearing last year from constituents being charged substantial fees just to apply to rent, or even view, an apartment or home in the city’s tight – and expensive – rental market.

“I’m not opposed to the idea of collecting a fee to do something like a credit check on a renter,” she told MTN News. “But to charge a fee, just for the right to put in an application? I think it’s a vast overreach.”

So, Pomnichowski, a Democrat, has introduced a bill at the 2021 Legislature that would require landlords or property-management firms charging these fees to refund them to anyone who does not end up as the renter.

“My hope is that landlords and property-management companies stop charging someone for the privilege of turning in an application,” she said. “It’s an unfair housing practice.”

But the group representing landlords will be opposing Pomnichowski’s Senate Bill 241, which is scheduled for a hearing next Tuesday before the Senate Business and Labor Committee.

John Sinrud of the Montana Landlords Association said landlords incur costs when reviewing applications, such as doing credit or background checks on potential renters.

“They want to get the best applicants,” he said. “Who is to say what’s fair or not fair? It is a ridiculous bill; it is cumbersome.”

Under the bill, landlords could keep a portion of the application fee – if they give written notice to the applicant specifying what that money is paying for, in terms of services performed related to that applicant.

The bill defines an allowable cost as an “out-of-pocket expense to a landlord or manager for a specific service in relation to the application, performed prior to approval or disapproval of a tenant.” It cannot include a fee for the landlord’s or manager’s time.

Pomnichowski said she thinks some landlords and property managers, in tight markets, are using the application fees as a revenue stream, rather than covering actual costs.

She provided an email exchange between a constituent and a Bozeman property manager, in which the management company was charging $100 to apply and view the interior of a townhouse the constituent considered renting.

The company said the charge was $25 per person, so because four people would live in the rental, the application fee would be $100. The person considering the rental asked if one person could look at the house, and pay just $25, but was told no.

Pomnichowsi said she also learned of a group of four college students and four parent co-signers who had to pay $400 to apply for an apartment – and didn’t get the rental and received no money back.

“Whatever legitimate expenses there are, that’s fine,” she said. “But not $400 for four potential renters, who don’t even end up taking the apartment … That is not an honorable practice.”