Arizona enacts law limiting rental application fees for prospective tenants

The Arizona State Legislature convened on January 28, 2025, to introduce Senate Bill 1187, a legislative proposal aimed at regulating rental application fees charged by landlords. The bill seeks to amend Title 33, Chapter 10, Article 1 of the Arizona Revised Statutes by adding Section 33-1314.02, which establishes a cap on the fees landlords can impose on prospective tenants.

The primary purpose of SB 1187 is to limit landlords to charging only one application fee per prospective tenant. This fee would cover the landlord's costs associated with receiving, reviewing, and considering the application, as well as any visits to the rental properties. Notably, the bill prohibits landlords from charging additional fees for property visits, either before or after the application process.

The introduction of this bill comes in response to growing concerns about the financial burden placed on renters, particularly in a housing market where application fees can accumulate significantly when applying to multiple properties. Advocates for the bill argue that it promotes fairness and accessibility in the rental market, especially for low-income individuals and families who may struggle to afford multiple application fees.

During the legislative discussions, there were notable debates surrounding the bill. Supporters emphasized the need for tenant protections and the potential for increased housing stability, while opponents raised concerns about the impact on landlords, particularly smaller property owners who rely on these fees to cover administrative costs. Amendments to the bill were proposed to address these concerns, but the core provision limiting application fees remained intact.

The implications of SB 1187 could be significant, as it may alter the dynamics of the rental market in Arizona. If passed, the bill could lead to a more equitable application process for tenants, potentially increasing their ability to secure housing without incurring excessive upfront costs. However, landlords may need to adjust their business models to accommodate the new regulations, which could lead to changes in rental pricing or application processes.

As the legislative session progresses, stakeholders from both sides of the issue are expected to continue discussions, with potential revisions to the bill being considered. The outcome of SB 1187 will be closely monitored, as it could set a precedent for similar legislation in other states, reflecting a broader trend towards tenant protections in the housing market.