It's no secret that rent is high in Fairfield, California. In fact, a recent report found that the cost of living is higher here in Fairfield than it is in New York City.
Most of the time, the fees and deposits landlords charge are proportionate to the monthly rent their tenants pay. However, this isn't the case when it comes to application fees.
California state laws determine how high your application fees can be. Currently, the maximum you can charge is $59.67.
As a Fairfield property management company, PMI has the answers you need. Read on to learn more about typical application fees.
What Do Application Fees Cover?
Application fees aren't arbitrary cash grabs. The purpose of the application fee is to cover the cost of learning pertinent information about prospective tenants. This can include (but is not limited to):
- Consumer credit report service fees
- Criminal record report service fees
- Tenant screening service fees
- Compensation for time
If you're not screening prospective tenants as part of the application process, you're missing out on important information. We highly recommend tenant screening as a way to find the best tenants for your rental property.
Can All Landlords Charge the Max?
As we mentioned earlier, the maximum application fee in 2023 is $59.67. This number is subject to change based on the Consumer Price Index. A property management company can not only manage properties on your behalf but also ensure that your rental practices are legally compliant.
For example, property managers know that in the state of California, not all landlords can charge the maximum application fee. You can charge up to $30 to cover the general labor of screening an application. You can charge up to $29.67 extra to cover the cost of any of the services listed above and should be able to provide an itemized statement of costs if asked.
Can Tenants Provide Their Own Credit Checks?
In the past year, California landlords may have encountered new applicants who want to provide their own credit check. This is because of a bill passed by Governor Newsom in 2022 allowing renters to invest in their own reusable credit checks. The goal was to cut down on renter expenses to make housing more accessible and affordable.
Do you need to accept an applicant's reusable credit check? There is no law stating that you can't perform your own credit check and charge the applicant for it. However, refusing to accept a reusable credit check may lower your number of applicants and make it harder to fill vacancies.
Looking for a Fairfield Property Management Company?
In California, application fees can't exceed just under $60. While many landlords charge the maximum, it's important that you can prove that your application fee went to specific expenses during the application process. A property management company can help.
At PMI Northbay, we work hard to provide the best property management services to our clients, from tenant screening to maintenance oversight to accounting. You can take advantage of our full property management services or customize your services to fill any gaps. Contact us to learn more.