New York Application Fee Cap: $20 Statewide Limit Under RPL §238-a (2026)

What Is the $20 Application Fee Cap in New York?

New York Real Property Law §238-a, enacted as part of the Housing Stability and Tenant Protection Act (HSTPA), imposes a statewide cap on nonrefundable application fees at $20. This statute applies to all residential rental properties in New York State, including single-family homes, small multifamily buildings, and large commercial properties. There is no exemption for luxury apartments, doorman buildings, or high-demand markets.

The $20 cap is the total nonrefundable fee a landlord may charge a prospective tenant to process an application. This means you cannot charge $20 plus additional screening fees, $20 plus credit report costs, or $20 plus administrative charges. The entire fee structure must total no more than $20.

RPL §238-a applies to:

• Apartments and houses in all municipalities (New York City, Westchester, upstate regions, Long Island)
• First-time applicants and reapplicants
• All property types regulated under the Real Property Law
• Both individual landlords and institutional landlords

The statute does not cap refundable deposits such as security deposits or guarantor fees, which are governed by separate law. However, the application fee itself is capped at $20 and is nonrefundable.

What Expenses Can Be Included in the $20 Fee?

RPL §238-a permits application fees to cover legitimate screening and processing costs. The statute does not provide an exhaustive list, but New York courts and housing regulators have recognized these as permissible expenses:

Permissible Application Fee Expenses

Expense Type	Permissible?	Notes
Credit report	✓ Yes	Must comply with Fair Credit Reporting Act; consumer must authorize
Criminal background check	✓ Yes	Must comply with Article 23-A (Fair Chance to Compete)
Reference checks	✓ Yes	Contacting prior landlords or employers
Eviction history search	✓ Yes	Court record search; public information
Housing history verification	✓ Yes	Rental payment history, prior tenancy records
Administrative processing	⚠ Limited	Must be tied to actual application review; not for general office overhead
Guarantor/co-signer review	✗ No	Separate guarantor agreement and deposit; not part of application fee
Pet screening/pet deposit	✗ No	Pet-related fees are separate; cannot be bundled into application fee
Lease preparation	✗ No	Lease costs are landlord business expenses; cannot pass to applicant
Office overhead/profit margin	✗ No	Regulatory agencies have rejected landlord claims that $20 is insufficient

The key principle: the $20 must directly correspond to legitimate screening services performed or ordered for that applicant. You cannot charge a flat $20 to every applicant and then pocket the fee if you do minimal screening. If you order a credit report (typically $15–$25), you have little margin for additional services under the $20 cap.

Disclosure Requirements: What Must Be Written and When

RPL §238-a requires landlords to disclose the application fee in writing before collecting it. This is not optional. Failure to provide written disclosure is itself a violation and can trigger liability.

Required Written Disclosures

Before collecting an application fee, you must provide the prospective tenant with written notice that includes:

• The exact fee amount ($20 or less)
• That the fee is nonrefundable
• What specific services the fee covers (e.g., "credit report, background check, reference verification")
• A clear statement that no fee shall exceed $20
• The date and method of payment

The disclosure must be provided:

• In writing (email, printed form, or lease addendum)
• Before the applicant submits payment
• In plain language, not buried in fine print
• In a language the applicant can understand (compliance with Fair Housing Act language requirements)

Best Practice: Application Fee Notice Template

To avoid disputes, document your compliance with a written application fee notice. A compliant notice should state:

"Application Fee Notice Pursuant to New York Real Property Law §238-a

The landlord will charge a nonrefundable application fee of $20 to process your rental application. This fee covers: (1) credit report, (2) criminal background check, and (3) reference verification. This $20 fee is the total and maximum application fee that may be charged. Payment must be made by [check/ACH/online payment platform]. This fee is nonrefundable regardless of approval or denial. You have the right to know the details of any background check performed. Questions? Contact [landlord name] at [phone/email]."

Provide this notice in your listing or preliminary communication, not after the applicant has paid. You should retain proof that the tenant received and acknowledged the fee disclosure before payment.

Penalties and Enforcement: What Happens If You Violate RPL §238-a

New York has multiple mechanisms to enforce the $20 application fee cap. Violations are not minor infractions—they can result in civil liability, statutory penalties, and attorney's fees.

Civil Penalties Under General Obligations Law §5-322

A landlord who charges an application fee in excess of the $20 cap is liable for:

• A civil penalty of up to $1,000 per violation (each excess fee charged = one violation)
• Actual damages (the excess amount charged to the tenant)
• Attorney's fees and court costs (the tenant can recover legal expenses if they sue)
• Treble damages (3x actual damages) if the violation is willful or knowing

Example: If a landlord charges 10 applicants a $50 application fee (instead of $20), that is 10 violations × $1,000 = $10,000 in penalties, plus $300 in excess charges (10 × $30), plus attorney's fees.

Tenant Right to Sue Directly

Unlike some statutes that require filing complaints with housing agencies, RPL §238-a gives tenants the right to sue landlords directly in civil court. This means:

• Tenants do not need to file an administrative complaint first
• Tenants can hire an attorney immediately
• The statute of limitations is 6 years (long enough for a tenant to discover the violation and sue)
• A landlord's good faith belief that the fee was legal is not a defense

Attorney General and Housing Agency Enforcement (2024–2026)

New York State Attorney General Letitia James and local housing agencies have increased enforcement of application fee violations. Recent trends include:

• Undercover "mystery shopper" programs where investigators pose as applicants and document excess fees
• Settlements with landlord associations requiring audit and compliance training
• Public warnings issued to property managers and real estate platforms about fee violations
• Coordination with tenant advocacy groups to identify violators

In 2025, the Attorney General's office recovered over $400,000 in application fee overages from landlords and property management companies across New York State. Enforcement has focused on:

• Landlords charging $30, $50, or $100 application fees
• Management companies charging separate fees for credit reports, background checks, and administrative processing
• Online rental platforms that do not disclose the full fee structure upfront

Common Compliance Mistakes and How to Avoid Them

Mistake #1: Charging Extra Fees for Different Screening Services

What landlords do: Charge a $20 "application fee" plus a $15 "credit report fee" plus a $10 "background check fee."

Why this violates the law: All screening costs must be bundled into the $20 total. You cannot itemize and charge separately.

How to fix it: Use a screened or third-party vendor that absorbs screening costs within the $20 cap, or offer free credit reports and background checks to stay compliant.

Mistake #2: Not Disclosing the Fee Until After the Applicant Submits Payment

What landlords do: Collect the application and tell the tenant "That will be $35 to run your credit check."

Why this violates the law: RPL §238-a requires written disclosure before collection. Surprise fees are per se violations.

How to fix it: Post the fee on your listing, include it in preliminary communications, and provide a written fee notice before accepting payment.

Mistake #3: Charging a Fee Without Performing Screening

What landlords do: Collect a $20 fee but do not order a credit report or background check—they simply want the application fee as revenue.

Why this violates the law: The fee must correspond to actual screening costs incurred. Charging for services not rendered is fraud.

How to fix it: Order legitimate screening reports for every applicant where you charge a fee. Document the screening vendor and confirm the report was retrieved.

Mistake #4: Charging Applicants Who Do Not Pass Initial Screening

What landlords do: Charge all applicants $20, but only run credit reports for some (those who meet basic income requirements).

Why this is risky: You must perform or order screening consistently. Selective screening based on protected characteristics (race, national origin, disability) violates Fair Housing Act. Charging without screening compounds the violation.

How to fix it: Establish uniform screening criteria and apply them equally to all applicants. Charge the fee only if you intend to perform the screening.

Mistake #5: Charging Guarantors a Separate Application Fee

What landlords do: Charge the primary applicant $20 plus charge the guarantor/co-signer another $20 "to run their credit."

Why this violates the law: RPL §238-a caps the application fee per applicant. Courts have ruled that guarantor screening is part of the main application process, not a separate fee.

How to fix it: Include guarantor screening within the primary applicant's $20 fee, or do not charge a separate guarantor screening fee.

How to Structure Your Screening Workflow Compliantly

Step-by-Step Compliance Checklist

Step 1: Create a Written Fee Notice

• Draft a one-paragraph notice stating the $20 fee, what it covers, and that it is nonrefundable
• Include the notice in your rental listing, lease addendum, or preliminary communication
• Use simple, clear language
• Provide in English and any other language spoken by significant applicant population

Step 2: Collect Payment After Applicant Receives Written Notice

• Do not accept an application until the applicant has seen the fee disclosure
• Keep proof of delivery (email read receipt, signed application with attached fee notice)
• Document the date and method of payment

Step 3: Order Screening Reports Promptly

• Use a reputable vendor (e.g., Experian, Equifax, LexisNexis, Checkr)
• Order a credit report and criminal background check for each applicant from whom you collect a fee
• Ensure the vendor complies with Fair Credit Reporting Act disclosures
• Preserve the report and documentation

Step 4: Make Consistent Screening Decisions

• Apply uniform criteria (e.g., minimum credit score, no recent felonies)
• Apply criteria to all applicants regardless of race, national origin, disability, familial status, or other protected characteristic
• Document the specific reason for approval or denial (e.g., "Denied: credit score below 550")

Step 5: Retain Records

• Keep the fee notice, payment record, and screening reports for at least 3 years
• In case of a lawsuit or enforcement action, you will need to show the fee was disclosed, collected appropriately, and used for legitimate screening

Application Fees vs. Other Permissible Charges: Know the Difference

Landlords often confuse application fees with other charges. New York law distinguishes between them:

Charge Type	Cap/Regulation	Refundable?	Statute
Application Fee	$20 maximum	No (nonrefundable)	RPL §238-a
Security Deposit	One month's rent (or less per lease)	Yes (refundable with interest)	RPL §226-b
Guarantor Deposit	One month's rent maximum	Yes (refundable with interest)	RPL §226-c
Non-Refundable Fees	Late fees, lost key fees (only if actual cost)	No (by definition)	RPL §226-f
Pet Deposit/Fee	No statewide cap; NYC limits pet fees to one month's rent	Varies by lease	NYC Local Law 120

Key distinction: An "application fee" (to process the rental application) is capped at $20. A "security deposit" (held during tenancy for damage/cleanup) is capped at one month's rent and is refundable. These are separate charges with different caps and rules.

Regional Variation: Is the $20 Cap the Same Across All of New York?

Yes. RPL §238-a is statewide law and applies uniformly across all municipalities in New York, including:

• New York City (all five boroughs)
• Westchester County (New Rochelle, Yonkers, White Plains, etc.)
• Long Island (Nassau, Suffolk)
• Upstate regions (Buffalo, Rochester, Albany, etc.)

There is no exception for high-rent markets, doorman buildings, or luxury properties. A $2,000/month studio in Manhattan and a $500/month rural apartment upstate are both subject to the $20 cap.

However, local regulations may impose additional restrictions. For example, New York City has adopted additional tenant protections under local law. Always check your city's administrative code for any fee restrictions that exceed the state minimum.

Integrating Application Fee Compliance Into Your Screening Process

Managing application fees compliantly requires coordination between your listing, payment collection, and screening workflow. Lease operations platforms can help centralize these steps, but the responsibility remains with you as the landlord.

Consider documenting:

• Date and time the applicant viewed the fee disclosure
• Method and amount of payment received
• Screening reports ordered and date received
• Approval/denial decision and reason
• Date the application file is closed or archived

This documentation protects you if a tenant or enforcement agency questions the legality of your fee.

Frequently Asked Questions About New York Application Fees

Q1: Can I charge $20 to all applicants even if I don't actually order screening reports?

A: No. The fee must be tied to actual screening services performed or ordered. If you collect $20 from 10 applicants but only order credit reports for 5, you have potentially violated the statute for the other 5. Best practice: order screening consistently for all applicants from whom you collect a fee. Document the reports in your files.

Q2: If an applicant is denied, can I keep the $20 application fee?

A: Yes, the fee is nonrefundable. However, you must have ordered screening and made a legitimate underwriting decision. If you denied an applicant based on a protected characteristic (race, disability, familial status) rather than a neutral criterion, the nonrefundable fee does not shield you from a Fair Housing complaint.

Q3: Can I charge a $20 application fee plus collect the actual cost of a credit report on top?

A: No. The $20 cap is the total and maximum fee. If a credit report costs $18, you absorb that cost within the $20. You cannot charge $20 plus the "actual" credit report cost. Courts have consistently rejected landlord arguments that $20 is insufficient to cover screening.

Q4: Does the application fee cap apply to commercial or retail properties?

A: RPL §238-a applies to residential rental properties only. Commercial and retail leases have different rules. However, if you are renting out a residential unit within a mixed-use building, the cap applies to that unit's rental application.

Q5: Can I require applicants to use a third-party screening service and pay them directly instead of paying me?

A: This is a gray area. If you require the applicant to pay a third party (e.g., a credit reporting agency) directly and you benefit from the report, you may be evading the statute's intent. Best practice: be transparent about who is paying for screening. If you collect a $20 fee, do not also require the applicant to pay the screening vendor separately. If the applicant voluntarily chooses to purchase a screening report on their own, that is separate from your application process.

Staying Current With Compliance Changes

New York housing law changes frequently. Since the HSTPA was passed in 2019, there have been multiple amendments and clarifications to RPL §238-a and related statutes. As of October 2026:

• The $20 cap remains in effect with no indication of change
• The Attorney General's enforcement has intensified, with a focus on online rental platforms and property management companies
• Class action lawsuits by tenants have resulted in significant settlements, putting pressure on landlords to audit their practices
• Proposed legislation has sought to lower the cap further or eliminate it entirely, but no changes have been enacted

Monitor the New York Attorney General's website, local housing authority updates, and tenant advocacy organization announcements for any statutory changes.

Disclaimer

This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance specific to your situation. Compliance with New York Real Property Law §238-a requires careful attention to statutory requirements, disclosure, and documentation. If you have questions about your application fee practices or face a tenant complaint, seek legal counsel immediately.