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Oregon’s Late Fee Cap: What You Can Actually Charge

Oregon landlord-tenant law imposes a hard ceiling on late fees that overrides almost any lease provision. Under ORS 90.260(1), a landlord cannot demand late fees that exceed 6% of the monthly rent amount. This is not a recommendation or best practice—it is a statutory maximum enforced by state law.

Here’s the compliance math: If your tenant’s monthly rent is $1,200, the maximum late fee you can assess is $72 (6% × $1,200). If you charge $80 or higher, you have violated Oregon law, and the tenant can file a claim against you for damages.

This cap applies regardless of what your lease says. Even if your lease specifies a 10% late fee, Oregon law reduces it to 6%. Tenants are not bound by excessive fee language, and you cannot use a lease clause to circumvent the statute.

The 6% cap covers all charges labeled as “late fees,” “late charges,” “delinquency fees,” or similar language. It does not include:

• NSF (non-sufficient funds) fees for bounced checks, which have separate requirements under ORS 30.701
• Court costs or attorney fees in an eviction proceeding
• Actual damages from utility shut-offs or other tenant-caused losses (though these must be documented and reasonable)

If you attempt to charge multiple fees under different names for the same late rent payment, Oregon courts interpret this as a single late fee subject to the 6% cap. Do not try to charge both a “late fee” and a “processing fee” for the same delinquency.

The 5-Day Rule: When Late Fees Can Be Assessed

Oregon law does not allow landlords to assess late fees immediately when rent is due. Under ORS 90.260, rent is not considered “overdue” for fee purposes until the tenant is 5 or more days late in payment.

This means:

• Rent due on the 1st — late fee cannot be assessed until the 6th at the earliest
• Rent due on the 15th — late fee cannot be assessed until the 20th at the earliest

The 5-day threshold is mandatory. Your lease cannot shorten it to 3 days or even 4 days. ORS 90.260 establishes this as the minimum grace period, and any lease language that contradicts it is void.

Pre-Dated Checks and Partial Payments

The 5-day rule becomes tricky when dealing with pre-dated checks or partial rent payments. Oregon courts have held that the payment date is when the check clears or when you receive the funds, not the date on the check.

If a tenant gives you a check dated the 10th but it does not clear until the 15th, the 5-day clock starts from the 15th (the actual payment date). You cannot assess a late fee before the check clears.

Partial rent payments complicate matters further. If a tenant pays $600 of $1,200 rent on the 5th and promises to pay the remaining $600 on the 12th, Oregon law treats this as a partial payment that does not satisfy the rent obligation. You can assess a late fee on the full $1,200 if the outstanding balance remains unpaid 5+ days after the due date.

Electronic Payments and Processing Delays

For rent received via ACH, wire transfer, or online payment platforms, use the date the funds are available in your account, not the date the tenant initiated the transfer. If your bank credits the payment on the 8th, the 5-day grace period expires on the 13th, regardless of when the tenant submitted the payment.

Document the exact date and time you receive payment. If you charge a late fee and the tenant disputes the timing, you will need proof of when funds arrived.

Documentation and Disclosure Requirements

You cannot surprise a tenant with a late fee. ORS 90.260 requires that the late fee policy be disclosed before fees are assessed.

Lease Disclosure

The lease or rental agreement must include language stating:

• The amount or percentage of the late fee (capped at 6% of monthly rent)
• The trigger for assessment (5+ days late)
• How the fee will be collected or deducted

A vague reference to “applicable fees” is not sufficient. You must explicitly state the late fee amount or calculation method. For example:

“If rent is 5 or more days late, Tenant shall pay a late fee of $72 (6% of monthly rent). This fee must be paid within 10 days of notice.”

Written Notice of Fee Assessment

When you assess a late fee, provide written notice to the tenant showing:

• The rent payment due date
• The date rent was received (or the date of non-payment)
• The number of days late
• The late fee amount and calculation
• The deadline for payment of the fee

This notice protects you legally. If a dispute arises, you have documented proof that the fee was calculated correctly and the tenant was informed. Without written notice, a court may find the fee assessment improper, even if the amount is within the 6% cap.

Prohibited Late Fee Practices in Oregon

No Compounding Daily Fees

You cannot assess a late fee on the 6th day, another on the 7th, another on the 8th, and so on. Late fees must be assessed once per rent period. Once the 5-day threshold is crossed, you charge the fee one time. Any additional charges would violate the 6% cap when totaled together.

Example of a violation: Tenant is $1,200 rent overdue on the 6th. You charge $72 (6%). On the 12th, you charge another $72 because the balance is still unpaid. This is prohibited—you have now charged 12% of rent, exceeding the statutory cap.

No Grace Period Extensions

Oregon does not recognize contractual “grace periods” that extend beyond the statutory 5-day threshold. Some landlords attempt to include language like “Late fees are waived if paid by the 10th.” Courts interpret this as ineffective—the grace period is 5 days, period. Any lease language extending it is void.

No Fees for Payment Methods

You cannot charge a separate fee because the tenant paid by check, money order, or third-party check. If you want to discourage certain payment methods, you must accept only specific methods (e.g., bank transfer, credit card, property management platform payment)—not charge fees to penalize the tenant for using allowed methods.

Online payment platform fees are an exception. If a third-party payment processor (like Stripe or PayPal) charges you a processing fee, you can pass that fee to the tenant only if you disclose it in advance and it reflects the actual cost to you. This is separate from the 6% late fee cap.

Legal Consequences for Violating ORS 90.260

Oregon takes late fee violations seriously. Charging fees above the 6% cap or assessing them before 5 days have passed creates direct tenant liability.

Tenant Remedies

If you violate ORS 90.260, the tenant can bring a claim in small claims court or circuit court for:

• Actual damages — the amount by which your fees exceeded the legal limit
• Attorney fees — if the tenant retains counsel, you pay their legal costs
• Court costs — filing fees and service fees

Example: You charge a $100 late fee on $1,200 rent. The legal maximum is $72. The tenant can sue you for $28 in damages plus attorney fees and court costs. If attorney fees total $500, you now owe $528 for an overage of $28.

This makes late fee violations economically painful. A single aggressive fee assessment can trigger litigation costs exceeding the fee itself.

Landlord Liability in Eviction Cases

If you file an eviction for non-payment of rent and the tenant raises a late fee violation as a counterclaim, the court may reduce the judgment against the tenant or dismiss the case entirely if the late fee issue clouds the rent amount owed. This delays eviction and increases your legal costs.

Penalty Assessment by Oregon Bureau of Labor

Oregon’s Bureau of Labor and Industries (BOLI) can investigate complaints about late fees if part of a pattern of unfair practices. While BOLI does not have direct enforcement authority for ORS 90.260 violations, they can refer cases to the Attorney General for action against repeat violators.

Compliance Checklist for Late Fees

Use this step-by-step guide to ensure your late fee practices comply with Oregon law:

How to Handle Late Fees in Your Lease

If you are writing or updating a lease, use this language to comply with ORS 90.260:

LATE FEE CLAUSE (Compliant with ORS 90.260)

Rent is due on the [DATE] of each month. If Tenant fails to pay rent in full by the due date, Tenant shall pay a late fee of [AMOUNT] (not to exceed 6% of monthly rent) for each month rent is 5 or more days late. Late fees are assessed once per rent period and are not waivable. Tenant shall pay the late fee within 10 days of written notice.

Fill in the bracketed sections with your specific rent amount and due date. The 6% calculation protects you—you can reference the percentage rather than a fixed amount, which adjusts automatically if you raise rent.

Do not include language like:

• “Late fees waived if paid by the 10th” (violates the statutory 5-day rule)
• “$50 late fee plus $10 per day after the 5th” (creates compounding fees)
• “Late fees apply immediately upon rent due date” (violates the 5-day threshold)

Special Situations: Partial Payments and Payment Plans

Accepting Partial Rent Payments

If a tenant pays $800 of $1,200 rent, the obligation is not satisfied. The full $1,200 is still due 5 days after the due date. You can assess the 6% late fee on the full $1,200 rent amount, even though the tenant made a partial payment.

Do not apply the late fee only to the unpaid portion ($400). Oregon courts have held that the late fee should be calculated on the total monthly rent obligation, not a reduced amount.

Document partial payments clearly. In your property management records or platform, note:

• Payment date and amount received
• Remaining balance due
• Date the balance becomes 5 days late

Negotiated Payment Plans

If you agree to a payment plan (e.g., “Tenant will pay $400 on the 10th, $400 on the 20th, $400 on the 30th”), the original rent due date does not change for late fee purposes. If the first installment is late, you can still assess a late fee on the total monthly rent obligation.

Payment plans should be documented in a signed amendment to the lease or a separate written agreement. Oral agreements are harder to enforce and create disputes about whether a plan existed.

Tracking Late Fees in Property Management Systems

Use a property management platform that tracks payment dates, calculates late fees, and generates compliant notices automatically. LeaseBase’s rent payment tools automatically flag payments that are 5+ days late and allow you to issue late fee notices with documented proof of the calculation.

Your system should record:

• Rent due date for each lease
• Actual payment date for each payment received
• Number of days late (if applicable)
• Late fee amount charged
• Date late fee notice was sent
• Whether the fee was paid or disputed

Spreadsheets create compliance risk. They are error-prone, hard to audit, and do not generate timestamped notices. Compliance-focused platforms reduce the risk of accidental violations and provide audit trails if disputes arise.

FAQ: Oregon Late Fee Rules

Q: Can I charge a different late fee if the rent is more than 10 days late?

A: No. Oregon law allows only one late fee per rent period, capped at 6% of monthly rent. You cannot escalate fees based on how late the payment is. Once the 5-day threshold is crossed, the maximum fee applies regardless of whether rent is 6 days late or 30 days late.

Q: What if my lease says the late fee is $50 per month and I’ve been charging it for years? Do I need to change it?

A: If $50 exceeds 6% of your monthly rent, yes, you must change it immediately. Oregon law overrides existing leases. If your rent is $1,000/month, the max fee is $60. If it is $500/month, the max is $30. You cannot enforce the $50 fee. If a tenant disputes a fee under the old lease language, you will lose and may owe attorney fees.

Q: Can I charge a late fee if the tenant pays rent late but includes a handwritten note saying they will catch up next month?

A: Yes, if rent is 5+ days late, the late fee applies regardless of promises about future payment. However, you should still send written notice. Do not rely on the tenant’s note as proof of agreement to the fee. The tenant must be notified in writing, separate from any informal communication.

Q: Do late fees apply to utilities or other charges, or just rent?

A: ORS 90.260 applies only to rent. If you charge for utilities separately, late fees on utilities must follow different rules and cannot exceed 6% of the utility charge. However, many landlords do not charge utilities directly—tenants pay the utility company. If utilities are included in rent, the 6% cap applies to the total rent amount.

Q: If a tenant pays rent by check and the check bounces, can I charge both an NSF fee and a late fee?

A: Yes, but they are separate. The NSF fee (governed by ORS 30.701) covers the bounced check and bank charges you incur. The late fee (governed by ORS 90.260) covers the late rent. These are distinct charges. However, document them separately in your notice to the tenant so there is no confusion about which fee applies to which problem.

What Changes in 2026?

As of August 2026, Oregon has not changed ORS 90.260’s 6% cap or 5-day rule. However, Oregon continues to strengthen tenant protections in other areas (e.g., rent increase caps under ORS 90.323, just-cause eviction requirements). Watch for potential legislative action on late fees if the Oregon Legislature reconvenes in 2027 with proposals to lower the cap or add additional disclosure requirements.

For now, the 6% cap and 5-day rule remain the controlling law. Compliance with ORS 90.260 is non-negotiable.

Key Section: ORS 90.260 Full Text Reference

ORS 90.260 — Prohibited provisions in rental agreements. A provision in a rental agreement is prohibited if it provides for charging the tenant a late fee that exceeds 6% of the monthly rent if the tenant’s rent is 5 or more days late. Any rent not received by the 5th day after the due date shall be considered late for purposes of this section.

This statute is enforced through tenant remedies (actual damages plus attorney fees) rather than landlord licensure or regulatory action. The burden is on you to comply, and tenants have strong incentives to challenge violations.

Next Steps: Audit Your Current Practices

If you manage 2–75 units, review each lease you have in effect and check for compliance:

1. Calculate 6% of monthly rent for each property
2. Compare to the late fee amount stated in active leases
3. If any lease exceeds the cap, stop collecting those fees immediately
4. Create a new lease template with a compliant late fee clause
5. For renewals, provide tenants with updated lease language in writing
6. Implement a documented process to track payment dates and assess fees on the 6th day or later

Compliance reduces litigation risk and protects your rental income. Tenants are more likely to pay rent and less likely to file counterclaims if they trust that fees are calculated fairly and disclosed clearly.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance specific to your situation or property. Oregon landlord-tenant law is subject to change; verify current requirements with the Oregon Bureau of Labor and Industries or your legal counsel before implementing fee policies.

What Is the New York Application Fee Cap?

New York Real Property Law §238-a (part of the Housing and Community Renewal Laws under the HSTPA) establishes a hard ceiling on what landlords can charge tenant applicants for screening purposes. Since the statute’s adoption, the $20 maximum has remained the statewide standard—no increases, no exceptions, no vendor pass-throughs.

This cap applies to any fee collected for the purpose of screening a rental applicant, including:

• Credit report fees
• Criminal background checks
• Eviction history searches
• Income verification or employment screening
• Reference checks
• Identity verification services
• Any other third-party screening service costs

The statute is consumer-protection legislation designed to prevent landlords from recovering screening costs through inflated fees that burden applicants—particularly lower-income and first-time renters who already face barriers to housing access. Violating the cap exposes you to civil damages, regulatory action, and significant litigation costs.

The Legal Foundation: RPL §238-a Text and Intent

RPL §238-a states that a landlord shall not demand or receive from an applicant to rent an apartment or house any fee, other than an application fee, for the purpose of obtaining a tenant history report or to pay for the cost of preparing or obtaining any other report regarding the applicant’s credit, character, or other qualifications to rent the dwelling unit.

The operative clause limits the total fee to $20. The statute does not permit:

• Separate fees for different screening services (bundled into the $20 total)
• Reimbursement of vendor fees beyond the $20 cap
• Administrative charges for processing applications
• Non-refundable deposits separate from the application fee

The law’s intent is two-fold: (1) prevent landlords from using screening as a profit center, and (2) reduce barriers to housing by keeping application costs predictable and low. The statute explicitly recognizes that credit reports, background checks, and verification services have real costs, but caps the applicant’s contribution at $20 regardless of the actual vendor charges.

When Can You Collect the $20 Application Fee?

Timing Requirements

You can collect the $20 application fee only after an applicant submits a written application for tenancy. The fee cannot be charged upfront as a prerequisite to receiving an application form—it must be tied to the actual application submission.

Pre-application disclosure required: Before collecting any fee, you must provide the applicant with a written statement disclosing:

• The amount of the application fee ($20)
• What the fee covers (screening services)
• Whether the fee is refundable or non-refundable
• Your contact information for questions

Many landlords include this disclosure in the application form itself or provide it as a separate sheet when the applicant requests an application. Document that the applicant received the disclosure before payment.

Payment Methods and Recording

Accept payment via check, credit card, or online payment platforms (if you use lease management software with integrated payment processing). Keep records of:

• Date fee was collected
• Applicant name and unit applied for
• Payment method and confirmation number
• Signed or initialed acknowledgment of fee disclosure

If an applicant pays the fee and you reject their application, the fee is non-refundable under the statute. However, your written disclosure must have clearly stated this before collection. If you promised a refund upon rejection, you are contractually bound to refund it—so be explicit about non-refundable status upfront.

What Costs Can You Include in the $20 Fee?

The $20 cap is a single, inclusive fee for all screening-related vendor services. You cannot pass through separate charges or itemize costs. Here’s what is covered:

The statute’s language is deliberately broad (“any report regarding the applicant’s credit, character, or other qualifications”) to prevent landlords from circumventing the cap by relabeling fees. If a cost relates to evaluating whether the applicant is qualified to rent, it falls under the $20 cap.

Common Compliance Mistakes and How to Avoid Them

Mistake #1: Itemizing Vendor Costs to the Applicant

Problem: Landlord collects $20 for “credit report” plus $10 for “background check” plus $5 for “administrative processing.”

Violation: This totals $35, exceeding the cap. RPL §238-a prohibits charging additional fees for screening services.

Compliance Fix: Collect a single $20 application fee. Absorb all vendor costs yourself. If your vendor charges $25 for a tri-merge credit report, you cover the $5 difference—the applicant pays only $20.

Mistake #2: Charging a “Non-Refundable Processing Fee” Separate from the Application Fee

Problem: Landlord charges $20 for “screening” and $15 for “application processing.”

Violation: Any fee tied to processing, reviewing, or evaluating the application is part of the screening fee cap. The statute covers all fees related to assessing the applicant’s qualifications.

Compliance Fix: Use a single $20 fee labeled “Application Fee” or “Application and Screening Fee.” Do not break it into categories.

Mistake #3: Failing to Disclose the Fee in Writing Before Collection

Problem: Landlord verbally tells applicant “The fee is $20” but collects payment without a written disclosure.

Violation: RPL §238-a requires written disclosure of the fee before collection. Oral promises or verbal statements are not compliant.

Compliance Fix: Provide a written fee disclosure document signed or initialed by the applicant before processing their payment. Include it in the application packet or email it as a separate PDF.

Mistake #4: Refunding the Fee After Rejection When You Disclosed It as Non-Refundable

Problem: Landlord collects the $20 fee after stating it is non-refundable, then refunds it when the applicant is rejected.

Compliance Issue: While the statute allows non-refundable fees, inconsistent application of your stated policy can expose you to claims of discrimination or unfair dealing, especially if you refund some applicants but not others.

Compliance Fix: Decide upfront whether your $20 fee is refundable or non-refundable, disclose it consistently, and apply the same policy to all applicants. Document your policy in writing. If you choose non-refundable, be prepared to justify it if challenged.

Mistake #5: Charging the Fee for Multiple Properties in a Single Application

Problem: Applicant applies for two units in your portfolio; landlord charges $20 twice ($40 total).

Compliance Issue: Ambiguous. The statute refers to “an applicant to rent an apartment,” suggesting one fee per application (even if for multiple units in the same transaction). However, some landlords argue that separate applications for separate units justify separate fees.

Compliance Fix: Treat multiple-unit applications as a single screening event and charge $20 once. If the applicant wants separate applications for separate units reviewed independently, you can argue for two fees, but document this agreement in writing. When in doubt, charge once and avoid dispute.

Penalties for Violating RPL §238-a

Non-compliance with the application fee cap carries significant legal and financial consequences:

Civil Liability

An applicant who is charged in excess of $20 can sue in small claims court or civil court for:

• Recovery of the excessive fee amount (e.g., if you charged $35, the applicant recovers $15)
• Treble damages (three times the violation amount) — if you charged $35, the applicant recovers $45 (3 × $15 overage)
• Attorney’s fees and court costs — the applicant can recover legal fees incurred to pursue the claim
• Interest — accruing from the date of the violation

Example: You charge an applicant $50 for screening (violating the $20 cap by $30). The applicant sues. You owe:

• $30 (the overcharge)
• $90 (treble damages: 3 × $30)
• $2,000–$5,000 (estimated attorney’s fees)
• Court filing fees ($100–$300)
• Total: approximately $2,190–$5,420 per applicant

If you violated the fee cap with multiple applicants, you face cumulative liability.

Regulatory Action

New York’s Department of Housing and Community Renewal (DHCR) can investigate complaints and issue cease-and-desist orders. While DHCR enforcement has been sporadic for application fee violations specifically, the agency has authority under the HSTPA to enforce compliance and levy administrative fines (up to $1,000 per violation, though enforcement varies).

Pattern and Practice Liability

If an applicant or advocacy organization can show a pattern of charging excess fees—e.g., charging $50 to all applicants over a 12-month period—you face:

• Class action potential
• Claim for unjust enrichment (return of all excess fees to all applicants)
• Punitive damages in egregious cases
• Reputation damage and negative online reviews

Special Considerations: NYC Local Law and Westchester Rules

While RPL §238-a sets the statewide cap at $20, some jurisdictions have imposed stricter limits or additional requirements:

New York City

NYC follows the statewide $20 cap (enforced via Housing Court and DHCR). However, the City’s Department of Consumer and Worker Protection (DCWP) has active enforcement divisions investigating tenant-protection violations, including application fees. NYC also enforces the Fair Housing Act more aggressively; if you can be shown to charge the $20 fee discriminatorily (e.g., only to applicants of color), you face additional civil rights liability under NYC Administrative Code § 8-502.

Westchester County

Check your specific municipality. Some towns have adopted local laws more restrictive than the state cap (e.g., requiring refundability of the fee, or prohibiting any fee at all for certain applicant categories). Always review your town or village code before setting your fee policy.

Compliance Checklist for Tenant Screening and Application Fees

Use this checklist to ensure you remain compliant with RPL §238-a:

• ☐ Single Fee Amount — Confirm you charge only $20 per application, not split into multiple categories or “handling” fees
• ☐ Written Disclosure — Prepare a written fee disclosure document stating the $20 amount, what it covers (screening services), and whether it is refundable or non-refundable
• ☐ Pre-Collection Provision — Provide the written disclosure to every applicant before collecting the fee; document receipt (signature or email confirmation)
• ☐ Consistent Application — Apply the same fee amount and refund policy to all applicants uniformly; document any exceptions in writing with the applicant’s agreement
• ☐ Vendor Bundling — Confirm that all screening vendor costs (credit reports, background checks, etc.) are absorbed into the $20 fee and not itemized separately
• ☐ Payment Records — Keep dated records of every $20 fee collected, linked to the applicant’s name and property, including payment method and confirmation
• ☐ No Separate Processing Fees — Do not charge additional fees for application intake, review, or administrative work
• ☐ Local Law Review — Verify your municipality (town, village, or NYC) has no stricter fee limits or requirements
• ☐ Staff Training — If you have leasing agents or assistants, ensure they understand the $20 cap and cannot negotiate or adjust fees
• ☐ Technology Compliance — If using online applications or property management software, verify that the fee collection system enforces the $20 cap and does not allow agents to override it

How to Calculate Your Actual Screening Costs

To understand your financial position under the $20 cap, audit your annual screening costs:

This breakdown shows that the $20 cap does not eliminate your screening costs—it shifts a portion to you. This is intentional policy: the state subsidizes housing access by requiring landlords to absorb screening costs. Plan your budget accordingly and factor screening costs into your rent projections.

Integration with Lease Management Platforms

If you manage multiple applications across several properties, manually tracking $20 fees and vendor costs becomes error-prone. A compliance-aware lease operations platform enforces the $20 cap at the point of fee collection, preventing agents from charging more, and logs all fee transactions for audit purposes.

LeaseBase’s compliance engine automatically flags any attempt to charge above the $20 cap and ensures written fee disclosures are provided and signed before payment. This reduces legal exposure and audit complexity, especially if you manage 10+ applications per year.

FAQ: New York Application Fee Cap Questions

Q: Can I charge the applicant for a credit report directly, outside the $20 fee?

No. Any fee to obtain a credit report is part of the screening fee cap. The statute explicitly prohibits separate charges for tenant history reports or credit reports. If the applicant authorizes you to pull a credit report, the cost is bundled into your $20 cap.

Q: If an applicant withdraws their application before I run the screening, can I refund the $20?

You can, but you’re not required to by statute. The fee is non-refundable once collected, unless you have stated otherwise in your written disclosure. However, if the applicant withdraws before you have begun any screening work, offering a refund as a goodwill gesture is reasonable. Document your decision in writing to avoid claims of inconsistency.

Q: What if I use a third-party property management company for screening—can they charge the applicant more than $20?

No. RPL §238-a applies regardless of whether you conduct screening directly or hire a vendor. The cap remains $20 to the applicant. If a third-party management company charges you $40 per screening, you absorb the $20 difference; the applicant still pays only $20. Ensure your contracts with screening vendors clarify this split.

Q: Can I charge a $20 application fee for a lease renewal (existing tenant)?

Typically, no. RPL §238-a applies to “applicants to rent an apartment,” which refers to prospective tenants. A lease renewal is not a new application for tenancy. If the existing tenant is signing an identical renewal lease, you generally cannot charge a new screening fee. However, if the tenant’s household has changed (e.g., they want to add a roommate), you could argue a re-screening fee applies. Check with an attorney for lease-specific scenarios.

Q: If I conduct my own reference checks by phone, can I charge more than $20 because of the time I spend?

No. Your labor and time are not separately billable. All screening work—whether conducted by you or a third-party vendor—is covered under the $20 cap. You cannot charge applicants for your staff’s time spent on reference calls, application reviews, or decision-making.

Recent Enforcement Trends (2024–2026)

While RPL §238-a has been law since the 1980s, enforcement has intensified in recent years:

• Increased Tenant Lawsuits: Tenants’ rights organizations have publicized the $20 cap, leading to more applicants filing small claims for overcharges. Many collect settlements without requiring court appearances.
• DHCR Focus on Screening Practices: DHCR has begun cross-checking screening fee violations in response to housing-access complaints, particularly in underserved communities.
• Fair Housing Intersections: Civil rights attorneys have successfully argued that discriminatory application of fees (charging some applicants $20 and others more, based on protected characteristics) constitutes housing discrimination under the Fair Housing Act.
• Online Platform Accountability: Third-party application platforms (Apartments.com, Zillow, etc.) have begun filtering listings that advertise fees exceeding $20 in New York, reducing visibility of non-compliant landlords.

Compliance is no longer a niche concern—it’s increasingly enforceable through multiple channels.

Next Steps: Building a Compliant Screening Process

To implement or audit your application fee practices:

1. Review your current fee schedule — Document any fees currently charged for applications, screening, or processing. Identify overcharges.
2. Draft a written fee disclosure — Create a one-page document stating the $20 fee amount, what it covers, and whether it is refundable or non-refundable. Have an attorney review it if possible.
3. Audit your vendor contracts — Confirm you are not contractually obligated to pass through vendor fees to applicants. Renegotiate if necessary.
4. Update application forms and online portals — Ensure all application materials disclose the $20 fee clearly and require an acknowledgment of the fee before payment processing.
5. Train staff and agents — Brief anyone involved in leasing that the fee is capped at $20, non-negotiable, and applies uniformly to all applicants.
6. Implement system controls — Use compliance automation to enforce the fee cap in your property management software and flag any violations.
7. Maintain audit records — Keep signed fee disclosures and payment confirmations for at least three years (statute of limitations for breach of contract and consumer claims).

Disclaimer

This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance specific to your situation, particularly regarding lease renewals, local law variations, or disputes with applicants. Laws are subject to change; verify current statutory language and case law before making fee or policy decisions.

What Is the “Natural Accumulation” Rule in Illinois?

Illinois courts established a specific legal framework for snow and ice liability that differs from many other states. Under Krywin v. Chicago Transit Auth., 238 Ill.2d 215 (2011), Illinois adopted the “natural accumulation doctrine,” which shields property owners from liability for injuries caused by snow and ice that accumulate naturally on their property.

This ruling was a major shift in Illinois law. Before Krywin, courts applied a stricter standard requiring landlords to remove snow and ice from all areas they controlled. The 2011 decision narrowed that duty significantly, but only for naturally occurring accumulation—meaning snow that falls and ice that forms without human intervention.

The distinction is critical: the natural accumulation rule does not apply when:

• Snow or ice results from negligent property management (e.g., water pooling and freezing due to faulty drainage)
• The property is a public way, common walkway, or shared tenant area
• You created an artificial condition that made ice more dangerous (e.g., tracking water onto a sidewalk that then freezes)
• You had notice of a hazardous condition and failed to act within a reasonable time

For self-managing landlords, this means you have no automatic duty to salt a parking lot during a blizzard, but you do have a duty to maintain common stairs, hallways, and entrances in a reasonably safe condition.

Your Legal Duty Under Illinois Law: The Scope

Illinois distinguishes between different property zones when determining landlord liability for snow and ice. Understanding this hierarchy is essential to compliance.

1. Common Areas and Shared Spaces (Your Responsibility)

You must maintain common areas in a reasonably safe condition year-round. This includes:

• Interior hallways and stairwells — must be kept clear of ice and slippery conditions
• Shared entry foyers — primary building entrance must be passable and non-hazardous
• Parking lot access points — walkways leading from parking to building entrance
• Designated common walkways — any pathway regularly used by multiple tenants
• Exterior stairs and landings — shared stair structures require active maintenance

For these areas, the natural accumulation rule does not shield you from liability. If a tenant slips on ice in a shared hallway, you can be held liable if you failed to remove the hazard within a reasonable time after becoming aware of it.

What is “reasonable time”? Illinois courts consider:

• Weather severity and duration
• Time of day the injury occurred
• Whether removal was physically possible
• Your prior notice of the hazard
• Industry-standard response times (typically 24 hours for major storms)

2. Individual Unit Entrances (Limited Responsibility)

The area directly outside a tenant’s unit door is a gray zone. Under Krywin, if snow accumulates naturally on the landing directly outside their door, you generally have no duty to remove it. However:

• If the entrance is part of a shared stairwell or common walkway, you must maintain it
• If poor drainage from your roof causes ice buildup at their door, that’s an artificial condition you created—you’re liable
• If the landing is so narrow or slippery that it poses an obvious hazard to emergency personnel or guests, you may have liability

Best practice: Explicitly define unit entrance responsibility in your lease. State something like: “Tenant is responsible for snow/ice removal from the area directly outside their unit door. Landlord maintains common stairwells and building entrances.”

3. Parking Lots and Driveways (Natural Accumulation Applies)

Under Krywin, you have no duty to remove naturally accumulated snow and ice from parking lots and driveways unless:

• You created the hazard through negligent maintenance
• The parking area is also a primary pedestrian walkway to the building
• You promised in the lease to maintain it
• Local municipal ordinances require it (see below)

However, many Illinois municipalities have local snow removal ordinances that override the common law rule. Check your city’s code.

Municipal Ordinances: When Local Law Overrides Krywin

Illinois cities and counties can impose snow removal duties that are stricter than the statewide natural accumulation rule. These local ordinances override common law.

Chicago Municipal Code

Chicago requires property owners to remove snow and ice from sidewalks and public ways. Under Chicago Municipal Code § 13-32-630:

• Deadline: Within 10 hours of snowfall ending (or by 10 a.m. if snow ends overnight)
• Standard: Removal must be complete—not just creating a path, but clearing the full width
• Penalty: $100–$500 per violation, plus fines up to $500/day if not corrected
• Enforcement: City can hire contractors and bill the property owner for removal costs plus 20% administrative fee

Chicago also requires removal from building entrances, stairs, and landing areas as part of sidewalk obligations.

Suburban and Downstate Illinois

Municipalities across Illinois impose varying standards:

• Oak Park, Evanston, Urbana: Require removal within 24 hours of storm end
• Springfield, Peoria: Require removal within reasonable time, often interpreted as 24–48 hours
• Smaller municipalities: Often have minimal or unenforced snow removal ordinances

Action item for all Illinois landlords: Search your city’s municipal code for “snow removal” or “sidewalk maintenance.” If you own in multiple municipalities, document each city’s requirements separately. Non-compliance can result in municipal fines separate from premises liability claims.

Premises Liability Insurance: Coverage and Gaps

Premises liability insurance protects you when someone is injured on your property. However, snow and ice claims are treated inconsistently by insurers, and many policies have exclusions or require riders.

Standard Premises Liability Coverage

A typical landlord insurance policy includes:

• Coverage limit: $300,000–$1,000,000 per occurrence (standard for multi-unit rentals)
• Deductible: $500–$2,500 per claim
• Covers: Slip and fall injuries, broken bones, head injuries from falls

Most standard policies do cover slip-and-fall injuries caused by snow and ice, but with important conditions:

Policy Exclusions and Red Flags

Read your policy exclusions carefully. Some insurers exclude or limit coverage for:

• “Weather-related loss” — ice caused by freezing rain or winter storms
• “Snow removal failure” — specific exclusion if you failed to remove snow as contracted
• “Parking lot/driveway claims” — may be excluded unless you purchase a rider
• “Regular maintenance failures” — if you have a snow removal contract, non-performance may void coverage

Recommended Coverage Enhancements

If you manage properties in Illinois, especially in Chicago or other snow-heavy areas, consider:

• Snow Removal Liability Rider — adds specific coverage for snow/ice claims; costs $200–$600/year
• Increased per-occurrence limits — raise from $300,000 to $500,000–$1,000,000 if you have 3+ units; adds $15–$40/month
• Medical payments coverage ($10,000+) — pays minor injury claims without admitting fault
• Umbrella policy — $1,000,000 additional coverage for $150–$300/year

Contact your insurer before winter to confirm coverage and ask about riders. Do not assume you’re covered.

Financial Exposure: What Slip-and-Fall Claims Actually Cost

Understanding the real financial risk helps justify insurance spend and removal procedures.

Why settlements are high: Illinois courts and juries often hold landlords liable when there’s evidence of negligence, even under the natural accumulation rule. If a tenant or guest can prove you had notice of a hazard and failed to act, damages multiply.

A single $200,000+ judgment can bankrupt a small landlord without proper insurance. This is not theoretical risk—it happens regularly in Illinois.

Compliance Checklist: Snow and Ice Management

Use this checklist to establish a defensible snow removal protocol. Document everything.

Before Winter Starts (October–November)

• ☐ Review your insurance policy — confirm snow/ice coverage; note exclusions; purchase riders if needed
• ☐ Check municipal codes — document your city’s snow removal requirements and deadlines
• ☐ Create a Snow Removal Plan — identify common areas, removal timeline, contractor details
• ☐ Contract a snow removal vendor — get written contract specifying:
  • Areas to be cleared (hallways, stairs, entry landings, parking access)
  • Timeline (within X hours of storm end)
  • Service frequency (per event or seasonal retainer)
  • Equipment used (salt, sand, shoveling, plowing)
  • Cost and payment terms
  • Vendor’s insurance and liability
• ☐ Update lease agreements — clarify tenant responsibility for unit entrance vs. your responsibility for common areas
• ☐ Notify tenants in writing — send memo explaining your snow removal procedures and expected timeframes
• ☐ Test removal procedures — conduct a walkthrough of all areas to be cleared

During Winter (December–March)

• ☐ Monitor weather forecasts — get alerts for snow/ice events
• ☐ Activate vendor immediately after storms — do not wait; document call time and authorization
• ☐ Take photos and video — document conditions before and after removal; timestamp with date/time
• ☐ Keep a weather log — record snowfall amount, duration, air temperature, removal date/time, vendor name
• ☐ Respond to tenant complaints within 24 hours — investigate and document your response
• ☐ Inspect common areas daily after storms — check stairs, landings, hallways for new ice formation or re-accumulation
• ☐ Maintain vendor communication — confirm each removal was completed; request photos or completion reports
• ☐ Store all receipts and invoices — proof of maintenance is critical in litigation

After Winter (April–May)

• ☐ Collect vendor final invoices — file for tax records and insurance documentation
• ☐ Review any tenant complaints or incidents — flag for insurer if claims likely
• ☐ Assess drainage and site conditions — fix any issues (roof leaks, poor drainage) that could cause ice next winter
• ☐ Review insurance performance — discuss with broker; adjust coverage if needed
• ☐ Update maintenance records in your system — keep a running log for each property

Documentation That Protects You in Court

If a tenant or guest files a slip-and-fall claim, your documentation determines whether you win or lose. Courts assume negligence unless you have evidence of reasonable care.

Essential Records to Keep

• Snow removal contracts — signed agreements with vendors showing scope of work
• Vendor invoices and receipts — prove payment for removal services; shows you took action
• Photos/video with timestamps — conditions before and after removal; common areas maintained
• Weather logs — snowfall amounts, dates, temperatures; establishes severity and timing
• Tenant incident reports — dates, times, injuries reported; your response documented
• Maintenance request responses — emails showing tenant complaints and your action within 24 hours
• Insurance declarations — proof of active coverage; document any claims history
• Lease provisions clarifying responsibilities — written agreement reducing dispute over who was responsible

Store these records for at least 7 years (Illinois statute of repose). Use a digital system with secure backup—spreadsheets get lost, but cloud storage persists. LeaseBase’s compliance engine tracks maintenance, documentation, and incidents by property and date.

Frequently Asked Questions

Q: Does the “natural accumulation” rule mean I never have to remove snow?

A: No. Under Krywin v. Chicago Transit Auth., you have no duty to remove naturally accumulated snow from private property (like parking lots). However, you must maintain common areas (hallways, stairs, shared entry points) in a reasonably safe condition. Additionally, if your city has a snow removal ordinance—which most Illinois cities do—you must comply regardless of the natural accumulation rule. Chicago, for example, requires sidewalk clearing within 10 hours of snowfall.

Q: I hired a snow removal contractor. Am I still liable if someone slips?

A: Hiring a contractor reduces but does not eliminate your liability. You remain responsible for ensuring the work is done properly and on time. If the contractor fails and someone is injured, you can be held liable for negligent hiring or supervision. Best practice: (1) require the vendor to carry insurance ($1 million minimum), (2) verify they’re bonded, (3) request completion photos/reports after each removal, (4) inspect the work yourself, and (5) keep copies of all vendor communications showing you monitored performance.

Q: What’s the difference between snow removal duty in a parking lot versus a stairwell?

A: Under Krywin, naturally accumulated snow in a parking lot is generally your landlord’s responsibility only if your city requires it by ordinance. However, snow or ice in a stairwell or common hallway is always your responsibility because those are areas where tenants must walk and where you control maintenance. The key distinction is whether the area is a necessary passage or a common use area. Stairwells, landings, and entry foyers fall into this category. Parking lots do not, unless they’re also the primary pedestrian route to the building.

Q: Should I include snow removal costs in rent, or bill separately?

A: This is a business decision, not a legal requirement. Most landlords include basic maintenance (including snow removal of common areas) in the base rent. If you want to charge separately for extraordinary costs (multiple storms, salting, extended contracts), you can do so if the lease clearly states this. Never charge tenants for removing snow from common areas—that’s your legal responsibility. You can contractually require tenants to remove snow from their own unit entrances.

Q: My insurance denied a snow removal claim. What can I do?

A: First, file a written appeal with your insurer within 30 days, citing your policy language and noting that snow/ice claims are generally covered under premises liability. If the denial was for a specific exclusion, ask if you can purchase a rider to cover that exclusion going forward. If the denial stands, you’ll need to defend the lawsuit yourself or hire counsel. Having a clear paper trail of removal efforts, vendor contracts, and photos significantly improves your legal position even without insurance. Going forward, get the snow removal exclusion clarified in writing and consider an umbrella policy for additional protection.

Risk Mitigation Strategies for 2026

As of August 2026, Illinois courts continue to apply Krywin strictly, but juries remain sympathetic to slip-and-fall plaintiffs, especially seniors and children. Proactive management is cheaper than litigation.

Best Practices

• Invest in good drainage — the most common “artificial condition” that creates liability is poor drainage leading to ice formation. Fix gutters, downspouts, and grading before winter.
• Use multiple removal methods — combine shoveling (for immediate response) with salting/sanding (for longer-term coverage). Some areas need both.
• Oversalt common areas slightly — it costs more but creates a clear pattern of diligence; courts see excess salt as evidence you take maintenance seriously.
• Respond to complaints in writing — if a tenant reports ice, send an email confirmation of the report date and your removal action. This creates a defensible record.
• Consider 24/7 monitoring in winter — or hire a vendor on call during storms rather than on a fixed schedule. Some properties (especially multi-story buildings) benefit from on-call service.
• Require liability waivers in leases — while Illinois courts may not enforce broad waivers, a clear lease provision stating “Tenant assumes risk of naturally occurring snow/ice in parking areas” can reduce exposure.

Connecting to Your Property Management System

If you’re managing 2–75 units, tracking snow removal across multiple properties, seasons, and vendors is complex. LeaseBase’s maintenance vendor management lets you organize contracts, schedule removals, and attach photos by property and date. Compliance reporting automatically flags when maintenance is overdue, protecting you from claims you forgot to act.

For larger portfolios, portfolio management features give you a dashboard view of all winter maintenance across your entire Illinois holdings.

Disclaimer

This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney licensed in Illinois for guidance specific to your situation, property, and local municipal requirements. Snow removal liability law varies by location within Illinois, and municipal ordinances override common law. Verify your city’s specific requirements and update your insurance before winter.

What Is New York’s Application Fee Cap?

New York State Housing and Community Renewal (HCR) and the New York Real Property Law (RPL) §238-a establish a hard cap on tenant application fees. As of 2020, landlords statewide—in New York City and every other county and municipality—can charge no more than $20 per applicant for tenant screening and rental application processing.

This is one of the most frequently violated provisions in New York landlord law because many property owners still operate under pre-2020 assumptions that they can charge market-rate screening fees (commonly $50–$200 in other states). The Department of Housing and Urban Development (HUD), New York’s Attorney General office, and tenant advocacy groups actively monitor and prosecute violations.

The statute is straightforward but enforcement is aggressive. Self-managing landlords who charge $30, $50, or higher application fees are exposing themselves to:

• Tenant lawsuits for statutory damages (treble damages under General Business Law §527)
• Department of Financial Services (DFS) complaints and investigations
• Attorney General enforcement actions
• Class action exposure if you manage multiple units and systematically overcharge

Statutory Text and Legislative Intent

RPL §238-a states:

“(a) No owner shall demand, accept or retain any fee from any prospective tenant as a condition to permitting such prospective tenant to apply to lease a dwelling unit, other than a non-refundable fee not to exceed twenty dollars. Such fee shall be used solely to reimburse the owner for actual costs incurred for the preparation and processing of a prospective tenant’s application form or credit report, or a report of a criminal conviction history.”

The key operative phrase is “actual costs incurred.” New York law does not allow landlords to profit from application fees or charge a markup. The $20 cap is a ceiling, not a guideline, and you may charge less if your actual costs are lower.

This statute applies to all rental housing in New York—residential units in buildings with 1 unit or more. There is no exemption for small landlords managing 2–75 units (though municipalities may have additional restrictions). The cap is uniform across rent-stabilized buildings, market-rate apartments, and single-family homes.

What Costs Can Be Covered by the $20 Fee?

RPL §238-a explicitly lists reimbursable costs:

What Cannot Be Charged

The $20 cap is a hard limit. You cannot charge separately for:

• Lease preparation or drafting — This is the landlord’s obligation
• Advertising or marketing costs — These are owner expenses, not applicant costs
• Utility setup or move-in processing — These occur after lease execution, not during application
• Property inspection or walkthrough fees — This is part of the leasing process
• Administrative or “processing” fees beyond actual costs — Profit margins are prohibited
• Multiple applications from the same person — You can collect the fee once; subsequent applications reuse the same screening data

Many landlords attempt to disguise overcharges as “administrative fees,” “processing charges,” or “application handling costs.” Tenant attorneys and enforcement agencies routinely challenge these and win damages against landlords.

Disclosure and Procedural Requirements

RPL §238-a requires explicit written disclosure before the applicant pays. Compliance demands:

1. Written Notice of Fee Amount and Purpose

Before accepting an application, you must provide the prospective tenant with written notice stating:

• The exact fee amount ($20 or less)
• The purpose: “This fee is non-refundable and covers the costs of credit report, background check, and application processing”
• That the fee is non-refundable, regardless of application outcome

Best practice: Include this language in your rental listing, application form, and lease. Email or text confirmation to the applicant after they submit is also recommended.

2. Inclusion in Lease or Application Addendum

Many violations stem from inconsistent disclosure. You should have a standardized Tenant Application Fee Disclosure that is signed by the applicant before payment. This document should state:

• Fee amount
• Non-refundable status
• What it covers (credit, background, processing)
• Applicant’s acknowledgment of understanding
• Date and applicant signature

This creates a clear paper trail in disputes or regulatory audits.

3. Proof of Payment Collection

Document how and when you collected the fee. If you use a tenant screening service (e.g., Zillow Rental Manager, AppFolio, or third-party screening vendor), ensure the service charges no more than $20 and that applicants see this fee before completing the form.

Common Compliance Mistakes and Penalties

Mistake 1: Charging More Than $20

Example: You charge $45 for “comprehensive tenant screening.”

Penalty: Under General Business Law §527, the tenant can sue for three times the overcharge plus actual damages and attorney’s fees. If you charged $45 instead of $20, the overage is $25. Treble damages = $75, plus attorney’s fees (often $500–$2,000+ in court). Class action exposure if multiple tenants are affected.

Mistake 2: Failing to Disclose the Fee Upfront

Example: You advertise “No application fee” but then charge $20 after the tenant submits.

Penalty: The undisclosed fee is unenforceable. If you try to retain it, the tenant can recover it plus treble damages and fees. New York courts have ruled that failure to pre-disclose violates consumer protection laws even if the fee amount itself is compliant.

Mistake 3: Collecting a Fee from a Rejected Applicant and Then Collecting Again from a Reapplication

Example: Tenant A applies, is rejected, reapplies three months later, and you charge another $20 fee.

Penalty: RPL §238-a does not permit multiple fees per applicant per rental cycle. If the unit is still available and the same person reapplies, you’ve already screened them. A second fee is likely a violation. Some courts view this as an attempt to circumvent the $20 cap.

Mistake 4: Embedding the Fee in Other Charges

Example: You charge “No application fee” but include a $20 “lease processing” fee or “administrative charge” that exceeds disclosed costs.

Penalty: Enforcement agencies view this as evasion. The fee must be labeled accurately and disclosed as an application fee. Concealment invites statutory damages and regulatory action.

Regulatory Enforcement and Oversight

Who Enforces RPL §238-a?

New York Attorney General Office (NYAG) — The primary enforcer. The NYAG’s Housing Bureau regularly investigates overcharging complaints and brings civil actions against systematic violators.

Department of Housing and Urban Development (HUD) — For FHA violations if discrimination is involved (e.g., charging some applicants more based on protected class).

New York State Homes and Community Renewal (HCR) — Enforces related statutes and works with the AG.

Private right of action — Tenants can sue directly under General Business Law §527. Many tenants hire attorneys on contingency for overcharge claims, especially in multi-unit buildings where multiple applicants have paid excess fees.

Recent Enforcement Trends (2024–2026)

The NYAG’s office has increased focus on application fee violations as part of broader anti-junk-fee enforcement. In 2024–2025, the office obtained settlements against several online rental platforms and property management companies for charging above the $20 cap. Self-managing landlords are not exempt from this scrutiny, especially if complaints are filed.

Step-by-Step Compliance Checklist

Follow this checklist to ensure you remain compliant:

1. Set your fee at $20 or lower. Do not charge more than the statutory maximum under any circumstance.
2. Document your actual costs. If you use a third-party screening service, keep invoices showing the charge per applicant. If you process applications in-house, document the time allocation (e.g., 30 minutes per application at $X/hour labor cost).
3. Create a written Tenant Application Fee Disclosure form. Include fee amount, purpose, non-refundable status, and applicant signature. Have applicants sign before submitting payment.
4. Disclose the fee in your rental listing. On Zillow, Apartments.com, Craigslist, or your website, clearly state: “Application fee: $20 (non-refundable).”
5. Disclose on the application form itself. At the top or bottom, state: “A non-refundable application fee of $20 is required to process your application for credit and background screening.”
6. Do not collect a second fee from the same applicant for the same rental unit. If they reapply, you have already screened them; a second fee is not permitted.
7. Keep payment records. If accepting cash, write a receipt. If accepting check or electronic payment, keep a bank statement or payment confirmation showing date, amount, and applicant name.
8. Retain signed disclosures and payment records for at least 3–6 years. In case of dispute, you will need to prove compliance.
9. Train yourself or your property management assistant on the rule. If you manage multiple units, ensure consistency across all applications.
10. Audit your process annually. Review a sample of applications to confirm fees were disclosed, collected, and documented correctly.

Integrating Fee Compliance into Your Screening Workflow

If you manage 2–75 units, a compliance system that tracks regulatory requirements across all your properties can reduce violations significantly. Many self-managing landlords use spreadsheets or informal processes that expose them to inconsistency and disputes.

A structured approach includes:

• Standardized application form with pre-printed fee disclosure
• Electronic signature capture for proof of applicant acknowledgment
• Centralized fee ledger tracking all payments, dates, and applicant names
• Automated reminders when it’s time to pull credit reports or run background checks

Proper lease and application management also reduces errors. If your screening vendor is charging above $20, you are liable even if you outsource the process.

Interaction with Other New York Laws

Fair Housing Compliance

Ensure that your application fee cap compliance does not create a disparate impact on protected classes (race, color, national origin, disability, familial status, sex, sexual orientation, gender identity, military status). For example, if you waive the fee for some applicants but not others, ensure the waiver is not based on protected characteristics.

Rent Stabilization (HSTPA) Restrictions

If your unit is rent-stabilized under the Housing Stability and Tenant Protection Act (HSTPA), the $20 cap applies in addition to any other restrictions on lease-renewal or vacancy-allowance fees. Rent-stabilized buildings have additional notice and timing requirements; the application fee is separate but subject to the same $20 cap.

Credit Report Accuracy and Fair Credit Reporting Act (FCRA)

When you charge a $20 application fee for a credit report, you must comply with the FCRA. This means:

• Obtain applicant consent before pulling their credit (usually included in the application)
• Notify the applicant if you will be obtaining their credit report
• If you deny the application based on credit, provide a copy of the credit report and explain the adverse action in writing

The $20 fee is for obtaining the report; compliance with FCRA requirements is the landlord’s separate legal obligation.

FAQ: Application Fees Under RPL §238-a

Q1: Can I charge $20 per person if there are multiple applicants (e.g., a couple or roommates)?

A: Yes. RPL §238-a allows a $20 fee per applicant. If two people jointly apply for one unit, you can charge $20 per person ($40 total) because you are running separate credit and background checks for each applicant. However, you must disclose this upfront. If you only run one combined check, you should charge only $20.

Q2: What if I use an online tenant screening service that charges me $15 per applicant? Can I charge the applicant $20?

A: Yes, but only if your total actual costs do not exceed $20 and are reasonable. If the third-party service charges you $15, you can add a small amount for your own processing time (e.g., $3–$5 for clerical work), totaling $20. You cannot charge $20 simply because the statute allows it; the fee must reflect actual costs. Document your cost allocation.

Q3: Can I keep the application fee if I reject the applicant?

A: Yes. RPL §238-a explicitly states the fee is non-refundable. The applicant does not get their money back if you reject them based on credit, background, or other screening criteria. However, you must disclose this non-refundable status in writing before they pay.

Q4: If an applicant pays the $20 fee but never returns their completed application, can I keep the fee?

A: Yes, as long as you disclosed the fee as non-refundable. However, best practice is to limit the fee to applicants who actually submit a completed application. If you collect the fee before an application is submitted and they do not follow through, consider this a sunk cost of marketing and offer the fee as a credit toward a security deposit if they apply later.

Q5: What if I manage a rent-stabilized building? Are there additional caps on application fees?

A: The $20 cap applies to all rental housing in New York, including rent-stabilized units. There are no additional caps, but rent-stabilized buildings must comply with the Rent Stabilization Law (RSL) alongside RPL §238-a. The $20 fee cannot be disguised as a lease-renewal or administrative fee under RSL; it must be labeled as a one-time application fee.

Preventive Measures and Best Practices

Document Retention

Keep the following for a minimum of 3–6 years:

• Signed Tenant Application Fee Disclosure forms
• Payment receipts (cash, check, or electronic confirmation)
• Ledger of all fees collected, with applicant names and unit addresses
• Invoices or payment statements from third-party screening vendors showing their per-applicant charges
• Copies of credit reports and background checks run (for your records, not to provide to others)

In a dispute, this documentation proves you complied with the $20 cap and disclosed it properly.

Annual Audit

If you manage multiple units, annually review a sample of your application files (e.g., last 20 applications) to ensure:

• Fee was disclosed in writing before payment
• Fee was exactly $20 or less
• Fee was non-refundable and labeled as such
• Payment was recorded and dated
• No duplicate fees were charged for reapplications

This self-audit catches errors before they become complaints or lawsuits.

Training and Communication

If you have a property manager or assistant handling applications, train them on the rule. Share the policy in writing, review it annually, and ask them to sign a compliance acknowledgment. This protects you if they make a mistake and also demonstrates due diligence to regulators.

Interaction with LeaseBase Tools

Self-managing landlords benefit from automated compliance checks that flag overcharges or missing disclosures during application processing. A centralized lease and document management system ensures all applications are processed uniformly across your portfolio, reducing the risk of inconsistent fee collection or disclosure.

Reporting and audit trails also make it easy to demonstrate compliance if you ever receive a regulatory inquiry or tenant complaint. You can quickly pull all application records and show that fees were disclosed, documented, and at or below the statutory cap.

Final Summary: Know Your Limit

New York’s $20 application fee cap is among the nation’s strictest. For self-managing landlords, the rule is simple: charge $20 or less, disclose it in writing before the applicant pays, document the payment, and keep records. Overcharges invite statutory damages, attorney’s fees, and regulatory action.

Violations are not victimless; they expose you to lawsuits from individual tenants and class actions if you manage multiple units. The Attorney General is actively investigating overcharges, and tenant advocacy groups monitor rental platforms and listings for violations.

If you use a third-party screening service, verify their per-applicant charge and ensure they disclose the fee to tenants. You are liable for their actions even if you outsource the screening process.

Proper disclosure, documentation, and consistency are your compliance shield. By implementing a simple written process and auditing it annually, you can manage applications confidently without legal exposure.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. New York landlord-tenant law is complex and frequently updated. Consult a qualified attorney licensed in New York for guidance specific to your situation, lease, property, or tenants. The information herein reflects law as of August 2026 and may not account for subsequent statutory changes, case law developments, or local municipal ordinances.