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Bill to require refunds of denied rental application fees draws support from students, cities and landlords oppose changes
Summary
HB 311 would require landlords or managers to refund application fees to unsuccessful applicants; student groups, the city of Bozeman and housing advocates supported the proposal while landlord groups and property managers warned it may be cumbersome and suggested a study instead.
Representative Kelly Kortum, sponsor of House Bill 311, told the Senate Business and Labor Committee the bill would require landlords or managers to refund application fees to applicants who do not receive an apartment, arguing the practice imposes a heavy cost on renters who typically apply to multiple units in competitive markets.
Kortum said an apartment listing can generate many applications and that multiple nonrefunded fees can leave applicants — including students and low‑income renters — with significant expenses that reduce their ability to cover security deposits or moving costs. He proposed that the cost of background and screening could be incorporated into the rent paid by the successful tenant rather than nonrefunded application fees for unsuccessful applicants.
Proponents included student government representatives from the University of Montana, individuals who testified about paying hundreds of dollars in application fees while seeking rentals, and municipal testimony from Bozeman’s deputy mayor, Joey Morrison, who argued refunding fees helps renters and those trying to move from homelessness into stable housing.
Opponents — including the Montana Landlords Association, Montana Association of Realtors and individual small landlords — said the bill may be placed in the wrong title and warned it could create operational burdens for property managers who use third‑party platforms such as AppFolio to process many applications. Witnesses said the bill as drafted may create unintended obligations under the Montana Landlord‑Tenant Act (Title 70, Chapter 24) and suggested alternatives such as a study bill or placing limits on property managers rather than a broad statutory change.
Questions from senators focused on how application fees are collected and processed, whether deposits or holds create landlord–tenant relationships, and whether the bill should be narrowed to licensed property managers or moved under property manager licensing (Title 37). The sponsor said the bill targets predatory practices and aims to improve fairness in competitive markets.
The hearing record shows competing proposals for narrower amendments, with landlords and property managers urging study and clearer drafting to avoid unintended consequences for small, mom‑and‑pop owners.
