LAS VEGAS (KTNV) — Renters call it robbery. Realtors call it a racket. Legal experts say it's unscrupulous. Landlords say it's the cost of doing business.
"It's an expense that we're having to incur so I don't see the problem with passing that on to the potential prospective resident," said Nevada State Apartment Association Executive Director Susy Vasquez.
She's talking about rental application fees: The up-front money you shell out just to be considered as a potential tenant.
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"It's maddening! People are getting robbed!" said Lisa Heinzman, who recently helped her daughter's family find a new place to live after the apartment they were in increased the rent.
The competitive market meant they had to apply to multiple places at once.
"They were told there were hundreds of applicants at a time for each place," said Lisa. "I had one realtor call me and tell me they had over 487 applicants for this one rental. And I thought, my God!"
Every applicant 18 years of age or older must pay a separate application fee.
Heinzman spent $400. "A few of the places returned the application fee but they were all different prices."
Screenshots of her receipts show fees of $50, $60, $72, $85 and $95 per person.
"My daughter and her fiancé spent over $1,000 on application fees alone! That's hard for a young family! That's what got me! I can't imagine all these people are paying all of these fees and they need this money for their rent, for their groceries, for living!"
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Heinzman included her name on the applications to help give them a better chance of getting approved. Otherwise, the landlord would see a stay-at-home mom with a toddler and a newborn, and one income.
"And they've got a dog too so, that's another barrier," Heinzman explained.
Searching online you can sometimes find the fee so you know what you're in for.
But on others when you click on fees and terms, the application fee is not listed and you have to contact the property.
13 Investigates heard from realtors, brokers, and property managers across the valley who feel some landlords are turning fees into a profit center by stacking applications, meaning processing many at one time.
They say especially in the current rental market, it's just wrong.
"It's not unusual to see a $150 application fee in the single-family rental market," said Vasquez. "But to see that from an apartment community would shock me."
She explains that application fees, which for apartments are typically $50-$75, pay for landlords to screen potential tenants.
"That would be a basic credit report, criminal background screening, and then some minor employment--it really is just comparing what they've been reporting as their employer on the credit screening. And then finally, any evictions, rental history, and sex offender registry."
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She says fees are going up because of rising fraud and online applications make it easy.
"The level of fraud that we're seeing is incredible. They're also able to falsify bank statements and rental history so, there is a little bit more work that's having to be done to investigate."
Vasquez says identity theft has been exacerbated by the pandemic and keeping up with it is costly. Landlords don't want to get stuck with squatters.
"They are moving into those homes and they are not the person that they are on paper that's occupying that house. And so, therefore, they're not paying rent after they move in."
But in reality, that only represents a fraction of the potential tenant pool, leaving legitimate renters like Lisa's family holding the bag once they've shelled out the money.
"A lot of them--they didn't even hear back. They had to call and say, hey, what's going on?"
Lisa's daughter wanted to rent a house for her growing family but had to settle for another apartment.
And she learned the application fee was just the beginning.
"And then there was a $250 administrative fee," says Lisa. "And that was to hold the apartment while they checked their credit."
The Legal Aid Center of Southern Nevada says rental fees are a huge issue facing their clients.
Because there's no legal recourse, they encourage social media reporting to call out unscrupulous landlords.
We found one renter who did just that, posting on Nextdoor after learning there were fees on top of fees. So much money, she couldn't afford to move in.
After getting approved, she got a notice. To move in, she'd have to pay a one-time deposit of $1595, plus a $500 pet deposit and a $175 administrative fee.
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On top of rent, there were other recurring fees: $74 in pet rent and $75 more per month to use the refrigerator, washer and dryer.
In total: $3,863 before even getting the keys.
"How can people do this?" wondered Heinzman. "This is ridiculous! There needs to be a law or something so that people can't be taken advantage of."
Legislation to outlaw rental application fees in Nevada failed in the last session.
Such fees are illegal in some states, like Massachusetts and Vermont.
Others have a cap on how much landlords can charge—just $20 in Wisconsin and New York. Could that happen here?
"I don't know if we can necessarily put a cap on that but I'm not opposed to having that conversation with the legislature come 2023," said Vasquez.
The Apartment Association says landlords should only be allowed to accept one application at a time, taking a home off the market until it's processed.
"And if that application is denied, then you go and you put the unit back on the market."
You can fight back by asking for a refund on your application fees.
Heinzman's family did get some of their money back that way.
But she says until things change at a legislative level, hardworking Nevada families will continue to suffer.
