Property manager reviewing a fee-free rental listing

You can avoid application fees and still screen every applicant. The path has four parts: know your state's rules, accept reusable screening reports where the law or your policy allows, apply written criteria to everyone, and use leasing software that does not add an application fee of its own. This guide walks through each part for independent landlords and small-portfolio property managers in the US.

TL;DR#

Application fee rules differ by state. Some states effectively ban the fee, others cap it, and some require you to accept a reusable screening report instead.
HUD's 2023 memo recommends that housing providers drop application fees or limit them to the real cost of screening.
Fee-free does not mean screening-free. Written criteria, applied the same way to every applicant, protect you and your applicants.
On EchoPM, tenants apply free on EchoPM listings: there is no EchoPM application fee and no tenant portal fee.
Start with your state's rule, then write your criteria, then set up your process in one place.

Table of Contents#

Why application fees are under the microscope
What the law says about application fees by state
Accept reusable screening reports
Screen without charging for the privilege
Write criteria first, then apply them to everyone
Our perspective
Run a fee-free process in one place
A step-by-step plan to go fee-free
If you are the renter: how to avoid application fees
FAQ
Sources

Why application fees are under the microscope#

An application fee used to be a small, routine charge. Renters now often pay it several times during one search, and rejected applicants rarely get anything back. Federal housing officials have noticed. HUD's March 2023 memo on junk fees recommends that housing providers eliminate rental application fees or limit them to the actual, legitimate cost of screening. It also suggests letting one fee cover multiple applications with the same provider or platform.

The same memo points to a fairness problem: screening reports can contain inaccurate information, and renters may pay repeated fees after rejections. For you as a landlord, that matters in two ways.

Legal exposure. More states are capping, restricting or banning fees, and enforcement guidance is getting specific.
Applicant quality. A fee is a barrier. Good applicants who are comparing five listings may skip the unit that charges them to apply.

Going fee-free is not only a compliance move. It is a way to get more qualified applicants into your pipeline from day one.

What the law says about application fees by state#

There is no single federal cap on application fees. State law decides, and the rules vary. Virginia Housing Commission's October 2025 study describes the range: some states prohibit application screening fees, while others cap them, require refunds of unused amounts, or regulate reusable screening reports.

Here is a snapshot of what the official sources say. Always confirm the current text for your state and city before you change a policy.

State	What the source says
Massachusetts	A landlord may never charge a prospective tenant an application fee, or take a deposit to hold or reserve an apartment, per the state's 2025 landlord-tenant guide.
Vermont	Effectively prohibits application screening fees, per the Virginia Housing Commission study.
Illinois and Colorado	Fees are limited to actual out-of-pocket screening costs, and payments are portable across properties for 30 days, per Harvard's Joint Center for Housing Studies.
Rhode Island	Since January 1, 2024, a separate application fee is generally prohibited, and a landlord cannot charge for a qualifying document the applicant supplied within 90 days, as described in a court filing summarizing the law.
New Jersey	A $50 cap on application and similar fees, per the state's 2026 guidance for housing providers.
Connecticut and others	Cap or restrict fees, per the Virginia Housing Commission study.

Watch for workarounds

New Jersey's guidance is useful even if you do not operate there, because it shows how regulators think. It says the cap cannot be evaded by splitting charges into administrative or screening fees. It also warns that collecting fees for unavailable properties, from applicants known not to qualify, or from an excessive number of applicants may violate the state's Consumer Fraud Act or the fee-cap law. The guidance also says the fee amount should be clearly disclosed in advertisements.

Five rental application fee compliance pitfalls

The practical takeaway for any state: do not rename a fee to get around a rule, do not collect from applicants you already know you will not approve, and state any fee in the listing itself.

Accept reusable screening reports#

One of the cleanest ways to avoid a separate screening charge is to accept a report the applicant already has. Upturn's August 2024 issue brief describes portable or reusable tenant-screening reports: a renter obtains one report and reuses it throughout the housing search, instead of paying a fee for each unit. At the time of that brief, six states had passed some type of portable-report legislation.

In some states this is not optional. Per the Virginia Housing Commission study, Colorado and Illinois bar an application fee when the applicant provides a qualifying reusable report, and Illinois requires that the report was prepared within the previous 30 days. The Illinois statute, 765 ILCS 705/30, says that if an applicant provides a valid reusable report at no cost to the landlord, the landlord cannot charge an additional application screening fee.

Even where the law does not require it, you may waive fees voluntarily. A simple policy works well:

Accept a recent, complete report from the applicant.
Confirm it covers what your written criteria require (identity, credit, eviction history, income verification).
Document the date of the report in the applicant's file.

Screen without charging for the privilege#

Dropping the fee changes who pays for screening. It does not change your duty to screen carefully. You have two ways to handle the cost: absorb it as a normal operating cost of filling a unit, or limit any charge to the actual cost where your state permits a charge. HUD's guidance supports either direction: eliminate the fee or tie it to the real cost.

Many landlords find the first option easier to run. A vacant unit costs far more per month than a single screening report, and a faster, friendlier application gets that unit leased sooner. Do the math for your own portfolio: estimate your average report cost, multiply by applicants per vacancy, and compare that to one week of vacancy.

Know your federal obligations

If you use a consumer report, including a tenant screening report, to deny an application or require a higher deposit, the Fair Credit Reporting Act requires an adverse action notice. The FTC's 2023 guide, Using Consumer Reports: What Landlords Need to Know, spells out what the notice must include:

The name, address and phone number of the consumer reporting agency that supplied the report
A statement that the agency did not make the decision
Notice of the applicant's right to dispute inaccurate information

The CFPB makes the same point: if an application is rejected or conditionally accepted, you must identify the specific company used so the applicant can see their file and fact-check it. The CFPB publishes a list of consumer reporting companies that includes tenant screening firms and how to request reports and dispute errors. Going fee-free does not remove any of these duties.

If a specific applicant or situation raises a legal question, such as a denial that may involve a protected class or a state-specific notice rule, talk to a landlord-tenant attorney or your state's apartment association.

Write criteria first, then apply them to everyone#

A fee-free application invites more applicants. That makes consistency more important, not less. The California Apartment Association's guidance on establishing screening criteria (revised December 2024) recommends written, objective criteria applied consistently to all applicants. It also recommends processing applications in the order received and accepting the first qualified applicant. Consistent application helps protect against discrimination claims.

A good criteria sheet is short and specific. Include:

Income standard. For example, a multiple of monthly rent, stated as a number.
Credit and rental history standard. What you look at and what disqualifies.
Occupancy limits. Who can live in the unit.
Documents you accept. Including reusable screening reports, where applicable.
Order of processing. First complete application, first review.

Give the same sheet to every applicant, and put it in the listing. If you tell applicants up front what you need, you avoid collecting paperwork you will not use, which is one of the main frustrations renters describe.

Our perspective#

We built EchoPM around a simple view: the application should not be where a renter pays to find out whether they qualify. Tenants apply free on EchoPM listings. There is no EchoPM application fee, and there is no fee for the tenant portal.

We also think landlords should not need five tools to run a fee-free process. Listings, applications, lease signing, rent payments and maintenance requests belong in one dashboard, so the work you save by not collecting and refunding fees is not replaced by work spent switching systems.

Our pricing follows the same logic. The platform fee applies only to live units, meaning published units or units with a pending or active lease. If a unit is not live, you are not paying for it. For landlords with roughly 20 to 200 doors, that keeps cost tied to the units you are actually leasing.

Our view is that a fee-free application is a better first impression for your property, and better software makes it practical.

Walker L

Run a fee-free process in one place#

EchoPM is property management software for landlords and a rental search platform for tenants. Your listings go live where renters search, applicants apply without an EchoPM application fee, and you manage the rest from one dashboard.

What that looks like in practice:

Leasing and applications. Review applicants and move the right one forward from the leasing and applications tools.
Lease signing. Sign natively in the app, or bring your own PandaDoc or HelloSign if you prefer. See how paperless leasing works.
Rent payments. Collect rent online with rent collection. Payment processing is 2.9% plus $0.30 per online payment, as listed on our pricing page.
Maintenance and more. Tenants submit requests, and you track them from the same place. Browse the full feature list.

Echopm

Platform pricing is per unit per month and drops as your portfolio grows: $4.25 for 1 to 99 units, $3.75 for 100 to 499 units, and $3.25 for 500 or more units. A card is required to start the 30-day trial. See the current plans on the property manager page.

A step-by-step plan to go fee-free#

Check your state and city. Find out whether fees are banned, capped, or tied to reusable reports. Read the statute or your attorney general's guidance, not a summary alone.
Decide your policy. Waive the fee entirely, or, where allowed, charge only the actual cost of screening. Disclose any fee in the listing.
Write your criteria. Put income, credit, history and document requirements on one page.
Accept reusable reports. Set a freshness window, such as 30 days, and note what the report must include.
Set your adverse action routine. Keep a template that includes the reporting agency details and dispute rights the FTC describes.
Process in order. First complete application, first review, same criteria for each.
Keep records. Save the criteria sheet, the report date and the decision for each applicant.
Move it into one system. Publish the listing, take applications and sign the lease in the same dashboard.

If you are the renter: how to avoid application fees#

Much of the search interest in this topic comes from renters, so here is the short version. Apply only after touring, and only to the place you want. Ask whether the landlord accepts a recent screening report you already have, especially in states with reusable-report laws. Ask if the fee can be waived. And look for listings that state no application fee up front. On EchoPM, tenants apply free on EchoPM listings, and the renter resources page has guides for the search.

Landlords benefit when renters know this: a fee-free listing stands out in the results.

FAQ#

Can I still screen tenants if I do not charge an application fee?

Yes. You can run the same screening you always did, as long as you follow your state's rules and the federal Fair Credit Reporting Act. You either absorb the report cost or, where your state allows, charge no more than the actual cost. Keep written criteria and apply them to every applicant.

Is it legal to charge an application fee in every state?

No. Massachusetts and Vermont effectively prohibit application screening fees, and Rhode Island generally prohibits a separate fee. Other states cap fees, and Colorado and Illinois limit them to actual screening costs. Check your current state and local rules before you set a policy.

What is a reusable screening report?

It is a report an applicant obtains once and uses across multiple rental applications, instead of paying for a new one each time. In Illinois, a valid reusable report provided at no cost to the landlord means you cannot charge an additional screening fee. The report must have been prepared within the previous 30 days.

Does EchoPM charge tenants to apply?

No. Tenants apply free on EchoPM listings, with no EchoPM application fee and no tenant portal fee. Landlords pay a platform fee only on live units, and online rent payments carry the processing fee listed on the pricing page.

Do I owe applicants anything if I deny them?

If you based the denial, or a higher deposit, on a consumer report, federal law requires an adverse action notice. It must name the reporting agency, state that the agency did not make the decision, and explain the right to dispute inaccurate information. Ask an attorney about any state-specific notice rules.

Sources#

EchoPM is property management software. Features and pricing described are product capabilities; not legal advice.

Avoid Application Fees: A Landlord's Guide to Fee-Free Leasing