5 Non-Refundable Fees Landlords Are Allowed to Charge

Whether you intentionally set about becoming a landlord or the task just fell in your lap when you inherited a property, there's a complex series of rules and statutes that you must abide by.

Many of these rules regulate fees that you're allowed to charge.

As a landlord, charging these fees can sometimes make the difference between covering repair costs and "falling in the red" for the month.

Fortunately, you are usually allowed to charge the following non-refundable fees if you go about it the right way.


Late Fees
This is one of the few fees that landlords everywhere are allowed to charge, but this doesn't mean that there aren't rules pertaining to doing so.

Depending on your state, how to set late fees for rent can vary immensely.

Regardless, these fees are non-refundable and are allowed as a direct result of the tenant not abiding by their lease.

Make sure to check your state-specific laws. In most areas, you can charge a single late fee, a per-day late fee and even a per-week late fee.

Your local laws will dictate how much these fees can be, so don't try to take advantage of the system and overcharge tenants.

This could end badly.


Screening Fees
Screening fees are also allowed during the rental process, and these fees are charged before a potential tenant ever even moves in.

Keep in mind, though, that you cannot charge this fee to an applicant and then keep the money if no screening was performed.

Fortunately, there are online property management tools that allow you to easily perform background and credit screenings.

This can result in reduced costs for both you and prospective renters.

Unless local law dictates otherwise, these fees are usually non-refundable except when, as mentioned, the screening never actually takes place.


Pet Fees
Many landlords think that charging a pet deposit is an agreeable option when a pet-loving tenant moves in.

In many areas, though, a pet deposit combined with the regular deposit still cannot exceed local laws on security deposit caps.

This means that, even if there may be additional damage to your property is due to a frisky feline, you may not get anymore money than you would with the traditional deposit.

Luckily, you're likely allowed to charge a non-refundable pet fee to those who want to bring their furry friends along.

Fees are also allowed if the tenant brings in a pet in opposition of the lease terms.

Keep in mind, though, that some places may not even allow a pet fee.

It's important to note that laws in most areas don't prevent charging additional "pet rent."

This can include a monthly payment on top of the rent that would normally be charged to ensure any potential damage is covered.


Attorney Fees
Even though there are online resources that make the process simpler, the real cost of evictions can still be excessive.

Fortunately, you can reduce these costs and additional expenditures throughout the entire tenant-landlord relationship by including an attorney's fee clause in your rental agreement.

These clauses simply state that a tenant agrees to pay any legal fees incurred by the landlord in relation to enforcing the lease.

It's not even necessary for these fees to be related to a completed eviction.

For instance, if legal fees accrue while trying to get rent, even if it is eventually paid, the tenant can still be on the hook.


Non-Refundable Move-In Fees
You may not know it, but charging non-refundable move-in fees in lieu of security deposits is a growing trend.

Instead of charging a deposit, which can be very expensive and have several complex laws about its use and return, you can simply charge a lower non-refundable move-in fee.

This fee isn't governed by security deposit regulations, and while you'll definitely be benefiting from its collection, your tenant will also likely end up paying less than they would with a traditional deposit.


The fact that these non-refundable fees all have strict rules attached is a testament to how complex a landlord's job can really be.

Fortunately, once you have a decent understanding of these fees, you'll be able to easily discern when you should and shouldn't charge them.

Posted on Jul 17, 2015

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