Are Housing Application Fees A Scam? New MT Bill Requires Refund.
The Montana housing crisis is real, and longtime residents are being forced out due to high costs, but they might soon see some relief with an application refund.
Whether you are looking to buy or rent, it's nearly impossible to afford housing in Montana unless you make over 6 figures, which many of us do not. To say housing budgets are tight would be an understatement.
What if you do need to find an apartment to rent? Well, if you can actually find a unit, chances are there are 100 other applicants in line with you, and they are all paying the application fee. This in itself seems like a scam to me. If the house can only go to one applicant, why are you charging hundreds of people hundreds of dollars? Shouldn't you refund everyone else's application fee? Well, that bill is now on the table.
Representative Kelly Kortum from Bozeman has sponsored this new House Bill (233), and it would require landlords to give refunds to applicants that don't sign a lease. Here are the meat and potatoes of the bill itself.
Section 1. Application fees -- refund -- deduction of costs. (1) A landlord or a manager of a premises that requires an application fee prior to the rental of the premises shall refund the application fee within a reasonable period of time if the applicant does not become a party to a signed rental agreement for the premises or if the applicant does not become a party to a rental agreement that has the same effect as if it had been signed pursuant to 70-24-204. However, the landlord or manager may deduct costs from the refund as provided in subsection (2). (2) If the application fee includes costs pertaining to specific services, the applicant must be given written notice of the portions of the total application fee allocated to each cost at the time the application fee is collected. If the applicant does not become a party to a rental agreement as provided in subsection (1), the landlord or manager may retain only the costs specified in the written notice for services actually performed and shall refund the balance as provided in subsection (1). The landlord or manager may not retain the cost of a service that was not performed, even if the cost was specified in the written notice that was provided to the applicant.
An application fee isn't chump change. Many can run you around $150 dollars. With a minimum wage of $9.20 that is going to take you over 20 hours of work to pay for after taxes. Keeping that money if you don't get the rental unit just doesn't seem fair.
As of right now the group met early this week and has tabled the bill for now. If you would like to voice your comments, you can do so HERE.