While the laws regarding application fees for rental units vary by state, the fees are legal in most states, according to RentPrep. While the average application fee is $25 per applicant as of 2015, it may range as high as $100, depending on state law, the location of the property and other market conditions.
California state statutes limit the application fee to $35 per applicant. The fee must represent the cost of the background check and reasonable fees for the time required to process the application. California does not allow property owners to charge an application fee if properties are not available unless the applicant signs an agreement agreeing to the fee, reports RentPrep. If applicants pay an application fee, the law requires the landlord to provide a copy of the report and an itemized receipt.
While Virginia allows landlords to charge a fee, it requires them to return any portion above actual expenses if they reject the application for any reason. Wisconsin limits the fee to the actual cost of the screening report, up to a maximum of $20, states RentPrep.
For some landlords, the fee itself serves as a part of the screening process. By informing the applicant of what the screening process involves, landlords discourage applicants who cannot meet the criteria from applying, indicates RentPrep.