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. From the application fee to the move-in fee and security deposit, it can seem like a never ending list of expenses before you even finish moving in. Most of these charges are straightforward, but administration fees are a bit more vague. 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.

What are administration fees? What do they cover? How do they differ from other fees? This Redfin article answers all those questions and more. It’s important to understand these fees whether you’re renting a two-bedroom apartment in Louisville, KY or a studio in Seattle, so let’s get straight to it.

What is an administration fee for an apartment?

Landlords charge tenants an administration 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 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, as all of them are paid prior to moving in. We’ll walk through what’s involved with each one so you can approach 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 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 from 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. For example, if a pet chews up the carpet, you may be charged for its replacement.

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 administration 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 administration fees.

When are they paid?

Administration fees are paid at some point prior to the move in date. Some landlords may apply administration fees to the cost of running a background and credit check, which is paid at the time of application. Landlords could also add them 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 administration 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 administration 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.

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