Rental application fees would be capped at $25 under legislation considered by Michigan senators

BY ANNA LIZ NICHOLS, MICHIGAN ADVANCE

LANSING—Legislation to ban landlords from imposing any fees that are not reasonable, while also capping rental application fees at $25, is being considered in the Michigan Senate.

Lawmakers on the state Senate Housing and Human Services Committee heard from housing stakeholders Tuesday about the state of Michigan’s rental landscape and legislation that aims to eliminate barriers to affordable housing.

Application fees can cost interested renters more than $100, and can be charged without any guarantee that a compatible unit will be available, eclipsing the actual cost of performing a credit and background check used to evaluate an application, Sen. Rosemary Bayer (D-Beverly Hills) told committee members.

And that’s just one of the inappropriately high fees landlords in Michigan are charging, Bayer said, outlining the changes sought under her bill, Senate Bill 372.

In addition to rental application fees being capped at $25, under Senate Bill 372, landlords would be barred from using a person’s credit score as a determining factor in denying a rental application

Landlords would have to inform tenants in writing before accepting a rental application what information will be accessed to screen the applicant’s eligibility and what findings could result in a denial of an application, under the legislation. If the landlord takes adverse action to a person’s application, the landlord would be required to give the applicant a copy of the screening report and provide an opportunity for the applicant to discuss the decision with the landlord.

Potential renters would have the opportunity to sue landlords for up to $1,000 of damages and other costs associated with bringing legal action if they violate provisions of the law.

Under Senate Bill 373, landlords would have to provide at least one rental payment option that would place an additional charge on tenants like an online payment fee or credit card convenience fee.

Unforeseen fees charged by landlords on top of rapidly increasing rents are preventing Michiganders from accessing safe and affordable housing options, Eric Hufnagel, executive director of Michigan Coalition Against Homelessness told lawmakers.

Namely, “junk fees” or hidden predatory fees are of growing concern in Michigan, Hufnagel said. “Junk fees” are often arbitrary and unpredictable, with landlords erroneously charging tenants additional fees for maintenance requests or “convenience fees” for paying rent online, even if that is the only option the landlord offers to make payments.

Senate Bill 375, also being considered by the committee, would bar landlords from charging fees that are “not reasonable” or that would add additional costs to what is already covered under a rental agreement, like a fee for garbage removal that is greater than the cost the landlord incurs for garbage removal.

“Renters deserve predictable fair housing costs that are transparent,” Hufnagel said. “As housing affordability continues to be a pressing issue in Michigan with rents rising, as of January 2025 the statewide average of rent has increased by 7.2%,… this legislation reflects a broader push to protect tenants’ rights and to promote equitable housing practices.”

Michigan was one of 21 states in 2023 where more than half of renters spent 30% or more of their income on housing, which according to the U.S. Department of Housing and Urban Development classifies them as “cost burdened” and susceptible to struggling to pay for other essentials like medical care and food.

Finding affordable housing that is safe is already hard enough without a past eviction haunting a person’s rental history, Bayer told committee members. Having an eviction or even legal record that eviction proceedings were held, regardless of outcome, can ruin a person’s ability to secure housing, she said.

The ‘scarlet ‘E’ of eviction” is a black mark on a person’s record that can prevent a person from making it through a rental screening process, regardless if the tenant committed any wrongdoing to warrant an eviction process to commence, Housing Law Attorney for the Michigan Poverty Law Program Jim Schaafsma told the committee.

Senate Bill 374 would outline a process to get excision records sealed and expunged under certain circumstances including if the person who was the subject of the eviction fulfilled the terms of the earlier judgement.

Job loss can happen to anyone, even two income households, Bayer said, and the destruction an eviction has on a person’s record is too extreme to not allow for there to be opportunities for a person to rebuild their life.

“Eviction, as we know, is one of the most traumatic things that can happen to any person or family. It can really cause them to spiral down all the way to homelessness, even when the circumstances surrounding the eviction were no fault of their own,” Bayer said.

The committee did not take a vote to move the bills forward Tuesday.

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This coverage was republished from Michigan Advance pursuant to a Creative Commons license.