7 Steps to Great Applicants
- Application Fees
- Credit Reports and Credit History
- Other screening services
- Megan's Law notice
- Checking RENTAL history
- Verifying income
- Visit applicants current residence
The law limits application fees to no more than $30 per applicant. The law also states that you can only keep the portion of an application fee that covers your actual costs for credit reports, office/staff time to verify information and so on.
And lastly, you have to give the applicant a receipt itemizing the way his or her application fee was used.
For example: when we receive an application, we run the credit reports first. If we can tell at that point that we will not approve the applicant, we decline them and refund their entire application fee except for $9 for the credit report and $10 office time to run it and analyze it. If we go through the full investigation process with an applicant, our actual costs always exceed the maximum allowable application fee of $30.
These new laws were created because of unscrupulous landlords that made application fees a profit center. They would charge application fees to 10 or more applicants where they only had one rental available. Then they would choose the one they investigated and keep everyone else's application fee.