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I was just looking through some rental ads in Las Vegas. One rental that I came across rents for $1100 a month. In the ad, it stated that there is a "$950 application fee due at lease signing, no deposit."
I have never seen or heard of this. Is it more common than I think?
Clever way to basically get a non-refundable deposit? Smart? Shady? Unethical? Illegal?
I, personally, would not rent from a landlord like this because I have always taken care of the properties I have rented and expect to get my deposit back at the end.
I also wonder if it would potentially cause tenants to be more careless with the unit or would cause them to not really care about cleaning the place up because they aren't getting their money back either way. I suppose the landlord could still take them to small claims court, but...
Nevada has no limit on the application fee. Landlords are free to charge whatever applicants are willing to pay. In a renter's market, application fees are low. in a tight market or hot property, the fee can be high. Simple american supply and demand.
Many ads that say "application fee, no deposit" are saying you pay the application fee now but are not required to also pay some or all of the deposit at the same time. If the landlord accepts a "security deposit" that can be interpreted by the courts as approving the application. So, by not accepting any "deposit" in advance, they have not approved your application.
it stated that there is a "$950 application fee due at lease signing, no deposit."
Clever way to basically get a non-refundable deposit? Smart? Shady? Unethical? Illegal?
All of them but mostly I'll go with stupid and/or illiterate.
Whatever it is any reasonable LL might intend to have isn't there.
The worst being no mention of the intermediate approval step.
No one else thinks that a $950 application fee (!!!) is strange? But no deposit? This totally tripped me out when I saw it earlier. It did say that applicants should have at least a 680 credit score and was a pretty decent house, so it wasn't a "low income" rental or anything...
All of this sounds as just another of many reason why I would never live there. And they talk about New York State.
Couldn't have possibly used a better example even though you most likely didn't even realize it. NY broker fees, which is what an administrative/application fee is in the end, are paid by the tenants right now because the demand is there for that but they have been paid by landlords before and tenants before that. As the market changes so do these types of practices even in high tenant controlled areas.
Is this $950 refundable to those who don't get the apartment? Are they taking only one application at a time or several at once and picking among them? If the later and nonrefundable under any circumstances, the landlord could potentially collect close to a year's rent just in selecting an applicant.
I know in Chicago it's typical to take a $50-100 application fee plus a few hundred dollar move-in fee at the time of application. But any applicant that is turned down has their move-in fee returned. I have also heard of companies charging a holding deposit that is not refunded if the applicant is selected but decides to rent somewhere else but is refunded or rolled into the security deposit in all other circumstances. But taking large sums of money from several applicants with no intention of refunding any of it is pushing the boundaries of ethics in my opinion.
The wording of it implies that its only collected after you're approved (due at lease signing,) so it does sound like it functions as a defacto non refundable deposit.
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