Since the process can become complicated, it’s easy to overlook fees that some (many) landlords like to tack on to the basics of renting a property. This also applies whether you’re renting residential or commercial properties—although for our purposes here, I’ll concentrate on what I know best: residential rentals. Here are the main fees you need to watch out for, along with tips for how to avoid paying them.
1. Application fee
There’s such a thing as a "reasonable" and an "unreasonable" application fee. A reasonable fee will run you around $25-$35. Anything higher should be questioned. The whole point of an application fee is that it takes the agent (or landlord-agent) time to review your application and it often costs money to run your credit report and your security background check.
- Tips to avoid paying: If you can offer to run your own credit report* you may be able to get out of paying as much, although likely you’ll still have to pay something. Be sure to ask for a receipt and documentation that your fee was actually used to run your credit report and security background check (less scrupulous agent-landlords have been known to pocket the fee without running any reports at all).
*If you sign up for a myFICO free trial membership, you can run your report and get your score for free—just be sure to cancel before your trial free period ends!
2. Overnight guest fee
Some landlords will attempt to assess a fee if you have overnight guests.
- Tips to avoid paying: Read your lease carefully as these fees should be stipulated in the lease. Charging for a one-time (or occasional) overnight guest is illegal under federal law. This fee is one that MSN Money calls "questionable" no matter how it’s approached—and if it isn’t outlined in your lease, your landlord will have no legal grounds to charge you.
3. Additional permanent resident fee
This fee is assessed as a rent increase if you add a permanent second (or third or fourth) occupant to your unit. The per unit occupancy rate is set by law, so your landlord does have the right to set occupancy limits and charge for them, and to charge for running credit checks and security background checks on additional permanent residents.
- Tips to avoid paying: Carefully read your lease so you know the maximum occupancy limits for your unit. If you don’t see the fees for adding an additional occupant outlined in your lease, you can fight it—so long as you stay within the legal occupancy limits for your unit.
4. Excess repair fees
There are many ways landlords can try to charge tenants for repairs. Your lease should outline what you, as the tenant, are responsible for and what your landlord is responsible for. Be sure to inspect all of the appliances and amenities carefully before signing a lease that cites you as responsible for major repairs (or better yet, look for a different property).
- Tips to avoid paying: Know up front what you’re responsible for and what your landlord is responsible for. If you don't do your homework up front, you may find you don't have much recourse once you've moved in.
NOTE: This tip is only helpful if there is no obvious negligence on your part regarding the repairs in question.
5. Non-refundable deposit fees
There’s no such thing in the world of rental properties. It’s customary for landlords to collect a security deposit, and these funds can be accessed upon move out to make any repairs that fall under your lease obligations, as well as any other stipulated move-specific touch-ups or repairs mentioned in your lease. However, be aware here that your landlord is required by law to return the remaining balance of your security deposit within 45 days of your move-out date.
- Tips to avoid losing deposit fees: Know your rights and obligations. Provide your landlord with a new, valid mailing address when you move out (this is the address your deposit funds will be sent to). Watch out for additional cleaning fees, carpet cleaning fees, redecorating fees or other such fees attached to your security deposit. Your security deposit itself covers these issues if they’re your responsibility under the lease agreement.
6. Administrative fees
This catch-all fee category (also called a “processing fee") is just a question waiting to be asked. If you don't question it, you may wind up paying your landlord's or agent's (or both) office overhead, marketing costs or even happy hour bills!
- Tips to avoid paying: Ask, ask, ask! If you can’t disabuse your landlord/agent for attempting to charge you this fee, this is a red flag that you should look for another property to rent.
7. Finder’s fee
A finder’s fee isn’t unlike a bribe—agents or landlords may invite prospective tenants to pay a finder’s fee to hold the unit. Please don't take the bait!
- Tips to avoid paying: Assessing a finder’s fee is illegal in most places and even worse, they don’t legally obligate the recipient to hold the unit for you! Check the law in your state for the most accurate information here.