Philadelphia Caps Rental Application Fees for Landlords

New Law Alert: Philadelphia Caps Rental Application Fees for Landlords

Big changes are here for Philadelphia landlords. On September 3, 2025, a new ordinance (Bill No. 250045) was signed into law, overhauling the rules for rental application fees. This new legislation, which takes effect 90 days after its adoption, is designed to make the rental process fairer for prospective tenants by placing clear limits on what landlords can charge.

For property owners, understanding these changes isn't optional—it's essential for staying compliant and avoiding penalties. Let's break down exactly what this new law means for your rental business.

What the New Application Fee Law Changes

The core of the ordinance is simple: landlords can no longer charge a general, undefined "application fee". The only payment you can accept from a prospective tenant before a lease is signed is a fee specifically to cover the cost of a background check and/or a credit check.

This single change comes with several important rules and limitations.

1. The Fee is Capped at $50 (or less)

The most significant rule is the new fee cap. The total amount you can charge a prospective tenant for background and/or credit checks is limited.

This means if your screening service charges $40 for a background and credit check, you can only charge the applicant $40. If the service costs $65, you can only charge the applicant $50. And, critically, if you decide not to perform the check, you cannot charge any fee at all.

2. "Soft Pull" Credit Checks Only

The law now prohibits landlords from performing credit checks that negatively impact an applicant's credit score. These are commonly known as "hard pulls" or "hard inquiries." You must now use a "soft pull" credit check, which allows you to review a tenant's credit history without causing their score to drop.

3. You Must Provide a Copy of the Report

Transparency is a key goal of this ordinance. Landlords are now required to provide the applicant with a copy of any background check or credit check report that was conducted.

4. One Fee Per 12-Month Period

The law also prevents landlords from charging applicants multiple times for different properties.

• An owner or landlord cannot charge a prospective tenant more than one screening fee in a 12-month period, even if the tenant applies for multiple properties owned by that same landlord.
• A property manager cannot charge a prospective tenant more than one fee in a 12-month period for applications to the same premises.

How This Fits with Other Screening Laws

This new ordinance doesn't replace existing screening laws but adds another layer of regulation. Your entire screening process must still comply with:

• The Fair Credit Reporting Act (FCRA): This federal law governs how consumer reports are used and requires you to issue an adverse action notice if you deny a tenant based on their report.
• The Renters' Access Act: This Philadelphia law sets strict guidelines on what you can consider in an applicant's rental and credit history. Read our full Guide to Tenant Screening in Philadelphia for a detailed breakdown.

The Smart Solution for Philadelphia Landlords

Keeping up with changing local laws—from application fees to security deposits and beyond—is a full-time job. At TrustArt Realty, it is our job.

Our team is dedicated to ensuring every step of the management process, from the first application to the final move-out, is fully compliant with the latest city, state, and federal regulations. We handle the complexities so you can focus on your investment.

Worried about how this new law impacts your application process? Let the experts at TrustArt Realty manage it for you. Contact us today to learn more about our property management services!