HELENA -- Under a bill moving through the Montana Senate, landlords and property owners would have to pay back rental application fees to applicants who don’t end up leasing the property.
Senate Bill 320 is sponsored by Sen. Ellie Boldman, D-Missoula, who said the bill was designed to even the scales between renters and landlords. She said the bill was based off of House Bill 233, which was tabled in committee on January 20th. She said her bill would attempt to give landlords a fairer shake.
“This honors the work that property managers or property management companies do, but it doesn't get to gouge the consumer in a housing crisis in this state,” Boldman said.
The bill would require landlords to detail what costs potential tenants’ application fees would pay for and then return the excess within 7 days of leasing the property to someone else.
If application fees are wrongfully withheld from the applicant, landlords can be found accountable in civil court. The court can then require that landlords pay back the full amount of withheld funds and be required to pay the applicant’s attorney fees.
There were two proponents of the bill who said renters are draining their savings applying for housing. They said for families who are financially struggling, the hundreds of dollars spent on rental applications could be used to buy other necessities or build up their savings. Jake Brown represented Shelter Whitefish, an organization focused on addressing the housing crisis.
“This bill puts some pretty common sense sideboards around application fees for renters, allows a landlord or property manager to recuperate costs for any services, like a credit or background check. If a renter has to pay, let's say 50 bucks for an application fee, and let's say they apply it at 10 different places, that's 500 bucks. You know, that's a month of rent, that's, you know, food on their family's table,” Brown said.
There was one opponent of the bill who said the bill was government overreach and Montana shouldn't be allowed to dictate how landlords or property managers run their business and they should be paid for their time and work. John Sinrud is the president of the Montana Landlord Association.
“This bill is not necessary. It delves into the inner dealings of people's lives and their businesses as they are trying to do the job of property managing, managing people, fixing the property,” Sinrud said.
The bill also includes a section that would require landlords to give applicants a copy of their credit score should they use the fee to order it. The documents would have to be valid for a year so the applicant can turn them in with any future applications they may submit.
According to the Federal Reserve, the rental vacancy rate across the state as of 2021 was 4.1%. However, according to statistics released by the The National Low Income Housing Coalition Montana is short around 18,000 houses for families who are at or below the federal poverty line or who make 30% or less of their area’s median income.
The committee did not take immediate action on the bill.
Elinor Smith is a reporter with the UM Legislative News Service, a partnership of the University of Montana School of Journalism, the Montana Broadcasters Association, the Montana Newspaper Association and the Greater Montana Foundation.