Application Fees Add to High Rental Rates

More landlords are charging tenants money just to view units.

PHI for rent sign 072011
NBC Philadelphia

Moving apartments is expensive enough as it is, but in the Bay Area, the cost is rising as landlords now charge just to look at a place.

Although no exact figures exist, simply viewing available units is now coming at a cost. More and more landlords seem to be charging application fees to interested tenants, according to the Bay Citizen. 

The paper said the fees are usually $25 to $40 and are supposed to cover the costs of credit and background checks. Many potential tenants, however, are doubtful that all landlords actually run a check on every tenant who submits a form.

The trend is most apparent in San Francisco, where some open houses have as many as 80 people attending, each of them paying an application fee. The area has seen a massive housing shortage, creating one of the tightest rental markets since 1999.

To make matters worse, the city has seen a population increase of nearly 30,000 since 2000. Experts say many of the newcomers are young tech workers who are making good money and don't mind paying more to live in a vibrant community like San Francisco.

The influx of new renters and lack of housing has pushed rental rates up 9 percent in the past year to an average of $2,568 per month, according to Bay Citizen.

With affordable housing already so hard to come by, the cost of fees could make the search even pricier for tenants who want to look at multiple apartments before committing.

Although application fees are usually non-refundable, tenants can do the following to avoid paying unnecessarily.

  • Call ahead and find out if an application fee is required for viewing an apartment. If it is, request that the fee only be deposited if you are considered a "finalist" for the unit.
  • In some circumstances, tenants can be entitled to a refund of the their application fee. If the landlord gives the apartment to another tenant before he or she has a chance to conduct a background check on you, you may be entitled to your money back.
  • Always ask for a copy of your credit report to make sure it was actually run and the landlord didn't just pocket your money.
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