What are Administration Fees When Renting an Apartment and What Do They Cover?

The process of renting an apartment comes with a laundry list of tasks and fees. You have to apply and pay an application fee after filling out an apartment application. Once approved, you may need to come up with a move-in fee, security deposit, administration fee, and other possible charges – as well as the first and last month’s rent. These fees can add up quickly. It’s worth it to take time to get familiar with standard administration fees and what they cover, along with local landlord-tenant laws, so you understand what your landlord can and cannot legally charge you as a tenant.

Your administration fee typically covers some of the costs associated with the application and background check process, as well as the time required to qualify you as a tenant. Before applying, ask the landlord to list and explain all fees you’ll be charged; this will give you a good idea if you want to apply, and you’ll know how much you’ll be on the hook for when you sign the lease.

You may have more questions about all these fees, such as what do administrative fees cover? How is it different from a security deposit or the move-in fee little alone the fees you may pay for renting with a pet, parking, and even the elevator? Also, can a tenant refuse to pay an administration fee to rent an apartment?

We answer these questions and more below.

What is the administrative fee for an apartment?

Landlords charge tenants an administrative fee to help mitigate the risk they take when pulling the unit off the market in case the prospective tenant doesn’t work out. The intent is to cover the landlord’s time to process the application, and is often considered an “opportunity cost or a deposit to secure the apartment.”

If your application is approved, the fee is non-refundable. If your application is denied, you should receive a refund for the application fee, minus any charges for the credit and background check.

How is the administration fee different from a move-in fee or a security deposit?

It’s easy to confuse the administration fee, security deposit, and move-in fee. We’ll walk through what’s involved with each one so you can walk into any apartment application process with the correct information and budget expectations.

Administration fee

The administration fee pays for the landlord or property manager’s time and effort to process your application and hold the apartment for you. This fee typically ranges between $50–$350; some states regulate the amount landlords can charge to prevent unscrupulous behavior or possibly rental scams.

Check your local landlord/tenant laws for specific information about fees that apply in your state. Though the administration fee is typically non-refundable, some landlords may credit the administration fee towards your first month’s rent.

Move-in fee

The landlord charges a move-in fee to cover costs for any light maintenance and touch-ups they make before a new tenant moves in. These may include repainting, carpet cleaning, or changing the locks. This fee is usually between $150–$350, which may be negotiable and is usually non-refundable. This fee is separate from the administration fee and is different than any fees charged when you move out.

Landlords do not always charge a move-in fee. Some use the previous tenant’s move-out fee to pay for any repairs and other work needed to get the apartment rent-ready for the next tenant. The move-out fee, assessed at the end of your tenancy, pays for any damage above normal wear-and-tear of daily life in the apartment and usually comes out of your security deposit. Such as if you have a pet that chewed up the carpet you may get charged to replace the carpet.

Security deposit

The security deposit is the amount you pay at the start of your tenancy to cover any damage beyond regular wear and tear. The landlord can also use it to cover the rent if you leave without paying the last month’s rent. The security deposit is assessed upfront, while a move-out fee is charged at the end of your tenancy and is considered a separate fee from the move-in fee or the administration fee.

The security deposit is usually the same amount as your first month’s rent and helps protect the landlord from any damage you may cause to their rental property during your tenancy. The amount can vary but is regulated by landlord/tenant law in each state. For example, if you scratch the wall during the move, stain the carpet, hang a TV and damage the drywall, or cause damage to window screens or blinds, the cost of those repairs will be deducted from the security deposit. The balance remaining after any damage is assessed should be returned to you within a set time frame in accordance with local laws.

How much are administrative fees?

An administration fee is typically a one-time fee and ranges between $50–$350. Renters usually pay this fee after they are approved for the apartment and sign the lease. However, landlords can decide when to charge administrative fees.

When are administration fees paid?

• Some landlords may apply administrative fees to the cost of running a background and credit check, which is paid at the time of application. This fee could be as little as $50–$100.
• Others may charge twice as much, between $100–$200, for their time in processing the application, holding the apartment, and not considering any other renters. This would also be paid upfront with the application fee.
• Landlords could also add the administration fee to the first month’s rent. This would be paid when you get approved for the apartment.

Are administration fees refundable?

You could get it back if your application is denied. In most cases, you will not receive a refund for your administration fee. The landlord may consider the administration fee to be the same as the application fee, which would be non-refundable. Whether or not the landlord needs to refund the administration fee is determined by local landlord/tenant law. When considering your budget for an apartment, it’s best to include the administration fee as something you’ll pay and not get back.

Can administrative fees be negotiated?

Landlords and property managers may not be inclined to negotiate the cost of the administration fee, but it doesn’t hurt to ask. A landlord may be willing to give up what they need to invest in qualifying a potential renter. They are legally required to screen each potential tenant 18 years of age and older, so the administration fee covers that process. They are not required to negotiate on the fee amount.

Are administrative fees legal?

In most states, it’s legal to charge administrative fees. Some states limit the amount and how many different fees a landlord can charge prospective tenants, for example

• In New York and Wisconsin, landlords and property managers can only charge a $20 application fee. In California, landlords can only charge an application fee, anything more can only be considered as part of the security deposit which is limited to two months’ rent.
• In Vermont and Massachusetts, landlords cannot charge an application fee.

What are some of the other fees tenants can be charged to rent an apartment?

There are many fees associated with moving into a new apartment, including basic rent, utility costs, security deposit, and the cost of furnishing your new place.

Along with an application and administrative fee, there are other possible fees a landlord can charge to cover any issues or damage that may arise during your tenancy.

Pet fees: Many landlords mitigate the risk of allowing pets by charging a pet deposit and/or a monthly pet fee. Like a security deposit, the pet deposit is held until you move out, and the landlord assesses for any pet damage. If none is found, the deposit is usually refunded.

A typical deposit for a dog is between $300-$500, and for a cat, between $200–$300. If a landlord doesn’t charge a deposit, they may charge a monthly pet fee added to your rent. This can range between $25–$50 per month per pet.

Application fees: Application fees are non-refundable and cover the charges a landlord pays to complete credit and background checks, as well as verifying rental and employment history and personal references.

Average application fees run between $20–$100 per renter. The application fee is regulated by local landlord/tenant law. Landlords may or may not credit your application fee toward your first month’s rent. If your application is approved, they may waive the fee altogether.

Parking fees: If a building provides parking, there is often an additional charge per parking space, especially in a large city. A major city’s monthly parking charges could be between $150–$450 per space. Parking fees can be added to your monthly rent, or there may be a requirement to pay a total amount annually. If you don’t rent a parking space from your building, you may find one not too far away, so be sure to budget for parking fees if you plan on parking a vehicle.

Elevator fees: You might see an elevator fee if you lease in a high-rise, luxury apartment, or condo. Some buildings will charge a one-time fee for the use of the elevators during your move, which could cost $100–$200. Others may require a deposit in case of damage to the elevator during the move. You may have monthly fees added to your overall rent amount that covers the ongoing use of an elevator. This will help to pay for any maintenance or damage if it is out of service.

Utility fees: If the apartment management pays for utilities (rather than you having your own utility accounts), they may charge a utility fee each month in addition to rent. Usually, this fee includes sewer, water, trash, and possibly gas, cable, and internet. Electricity is almost always separate and paid for by the tenant. Costs vary depending on how many people live in the apartment; utilities included, the size of the apartment, and whether the fees are based on an average of the overall building usage or a flat fee. You can estimate a cost of $50-$220 per month for utilities.

Amenity fee: The landlord or property manager may charge an amenity fee if the building has a pool, gym, an inside and outside common areas, or other apartment amenities. This fee could be a one-time fee paid when you move in and range between $100–$500. Or you could pay $30–$50 per month for the use of amenities. It’s not negotiable and is usually charged whether you use the amenities or not.

Renters insurance: The landlord typically requires tenants to pay for renters insurance to cover loss or damage to the tenants’ belongings if the apartment is broken into and personal items are lost, stolen, or damaged. This fee is relatively small in most parts of the United States, $10–$50 a month and covers a tenant’s valuables, which will not be covered under a landlord’s insurance for the building. The landlord’s insurance will cover the building in case of damage which makes the building inhabitable or protected in case a renter or guest gets injured on the property, not a renter’s belongings.

Before you sit down to start your apartment search, be sure to consider all of the extra fees that could add to your initial costs for an apartment and get tacked onto your monthly rent. Having the funds set aside to cover any of the non-refundable fees will give you peace of mind during the rental process.

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