By Marcus Williams | April 29, 2026
Application fee caps, refund rules, and disclosure requirements vary wildly by state. Here's the framework to set a fee that's compliant everywhere.
The patchwork
There is no federal rule on rental application fees. Each state — and in some cases each city — sets its own. Get it wrong and you can owe back the fee, plus penalties, plus attorney fees. Get it right and you have a small but legitimate way to recover screening costs.
!House keys on top of cash
The four state buckets
State rules generally fall into one of four buckets:
Bucket 1: Hard cap on the fee
Examples: California ($62.02 in 2026, indexed annually), Massachusetts (no fee allowed at all), Wisconsin ($25 for credit/background), New York ($20 cap for screening, with separate broker fee rules in NYC).
In these states the cap is the cap. Charging $50 in California in 2026 is a violation even if the actual screening cost more.
Bucket 2: "Actual cost" only
Examples: Washington (must equal actual screening cost, must be itemized in writing), Vermont (actual cost only), Oregon (actual cost, with a $10 cap for in-state portion in some cities).
These states let you recover screening costs but no more. Keep an invoice from your screening provider and pass through exactly what you paid. Anything above is a violation.
Bucket 3: Reasonable fee, refundable if not used
Examples: Colorado, Maryland, several others. You can charge a "reasonable" fee, but if you do not actually run a screening (because the unit was rented to someone else, or the applicant withdrew), you must refund. "Reasonable"