Non-refundable Application Fee

Question

I live in Chicago where I've been apartment hunting for the past 2 months. My wife and I finally found a place that suit our budget and needs for an apartment. Upon finding the place, we made several calls to the agency representing this place to ensure we had exactly what was need. The agent told us that we would need make 2.5 times the rent and an average credit score of 550 (between my wife and I). We easily passed this, so we decided to proceed with the application. Less than an hour later, we were denied because their screen company said I did have credit experience (which I do) and I didn't have rental history (which was never a requirements as they didn't even ask for rental history in the application). I reached out to the screening company who deflected me back to management and upon reaching out to management I was deflected back to the screening company. At this point, I no longer wish to do any sort of business with this particular company because: 1. the agents misrepresented the information for requirements 2. the supervisor I spoke to was rude and told me I could not call back to speak to a manager 3. the guy I was handed over to from the leasing department basically told me good luck on my hunt for apartment; after which he blocked my email from their system.

Am I entitled to an application refund due to the amount of discrepancies caused on their part and the false report by their screen company?

Answer 1

According to this site:

• Illinois law doesn’t set a limit on how much landlords can charge for application fees

• The application fee is non-refundable

• There’s no limit to the amount that a landlord can charge for a security deposit

At least one other site for landlords supported this, but I cannot find any actual law or case law on application fees. Apparently the city of Chicago has an extensive set of local ordinances on landlord/tenant relations which almost completely replace the state rules, and are in a number of ways more restrictive (for example, the city limits late fees, which the state does not) but I could not find any ordinance dealing with the application process.

In short, I know of no law which would entitle a prospective tenant who is dissatisfied with the application process to obtain a return of the application fee. You may wish to consult a local lawyer. I am not a lawyer, in IL or anywhere else.

Answer 2

Am I entitled to an application refund due to the amount of discrepancies caused on their part and the false report by their screen company?

Short answer

No.

Long answer

The question doesn't seem to indicate that there is a false report by the screening company. It said you didn't have a rental history, but the question doesn't indicate that you do have a rental history. If the screening company made a false statement of fact about you not having a rental history when you did, and refused to correct this when you contacted them, this might be actionable under fair credit reporting laws or as a common law negligent misrepresentation action (neither of which is likely to award you your attorney fees if you prevail).

The agent for the landlord didn't expressly identify all grounds upon which the rental application might be denied (since the possibility of denial for lack of rental history wasn't mentioned, although it wasn't ruled out), but this also isn't illegal. Unless the landlord or the landlord's agents state that applications will only be denied for specific reasons, the landlord or agent has great discretion to grant or deny applications to rent real property. If all reasons for rejection aren't stated, the landlord or agent, has only a vague duty to act in "good faith."

It could be that the unstated requirement that one have a rental history is one that is being applied on a discriminatory basis. In other words, perhaps it isn't invoked to deny the applications of white, native born rental applicants, but is being used to deny your application, and is really being used as a pre-text for housing discrimination. But as a practical matter, proving housing discrimination would cost tens or hundreds of thousands of dollars in attorney fees and costs, and years of litigation, to litigate, it might show that the the suspicion that this was a pre-text for discrimination would turn out to be wrong, and it is extremely difficult to prove. If you win you would get your rental application back and maybe some of your attorney fees or maybe none of them. This is why these kinds of cases are usually brought by government agencies rather than individuals who want their application fees back.