Why Every Utah Landlord Should Charge Application Fees

Why Every Utah Landlord Should Charge Application Fees

Once thought by three Utah municipalities to be a resident price-gouging tool, application fees have actually proven their worth. In 2006, Utah’s Rent Control Prohibition Act was amended to add fees to a list of charge that are set by the market and cannot be regulated or prohibited by local government. The result? Lower crime rates because Utah landlords were more likely to conduct a background check if they could charge fees to cover the cost.


What is the purpose of application fees?

Application fees are generally charged to cover the expense of conducting a thorough background check. This typically includes, pulling a credit report, reviewing any criminal history, checking the sex offender registry, conducting financial qualification and reviewing any rental history.


Why are application fees a good idea?

There are three great reasons to charge application fees. The first is to reduce your risk by only placing qualified tenants. Next, you can reduce your costs, by passing the price of screening on to your tenants. Finally, a processing fee will save you time by acting as a deterrent for renters who don’t think they will qualify. Often, renters who know they won’t qualify won’t even bother applying or will tell you about potential issues up front.


Who should I charge and how much?

A good practice is to charge every applicant over the age of 18 years an application fee and conduct detailed screening on each. Also, there is not set amount you can charge, but a common range is $25-$35 per person.