Fayetteville council delays new cap on rental application fees amid state-law concerns

The Fayetteville City Council on Dec. 17 amended and delayed an ordinance that would limit how much landlords may charge prospective tenants for application reviews and background checks, citing advice from the city attorney that the rule may conflict with Arkansas law.

City Attorney Kit told council that Arkansas Code Annotated section 14-43-608 bars municipal regulation of ‘‘prices for services between individuals and firms within the city limits’’ and that the application/background-check fees at issue are likely to be treated by a court as a ‘‘service.’' Kit said the city should act to avoid a probable legal conflict and proposed repealing the ordinance; council instead approved an amendment to postpone its effective date to March 31, 2025.

Why it matters: Tenants and renters’ advocates had championed the original ordinance as a way to reduce upfront costs for people seeking housing; some speakers at Tuesday’s meeting described hundreds-of-dollars burdens when applicants apply to multiple units. At the same time, the attorney’s memo flagged a legal vulnerability that elected leaders said could expose the city to litigation and defeat the ordinance in court if enacted without change.

Council debate focused on three paths: immediate repeal to avoid legal exposure, asking the Arkansas attorney general for an opinion, or delaying the ordinance’s effective date while staff revises language and pursues clarification. Councilmember Sarah Moore (first to speak in favor of retaining protections) and others expressed strong support for renter protections but ultimately backed the delay to allow time for legal review and more public notice.

Public commenters urged the council not to ‘‘kill’’ the renter protections. Billy Cook, with Arkansas Renters United, thanked the council ‘‘for passing this ordinance in October’’ and pleaded with officials to preserve renter protections while working out legal issues. Jackson Copeland, a renter, told the council the proposal ‘‘seems like a money making scheme’’ when landlords charge repeated fees.

Council action: After debate and public comment, council members voted to amend the ordinance by extending its effective date to March 31, 2025 (the amendment passed by roll call). Officials directed the city attorney’s office and staff to prepare a revised, ‘‘clean’’ ordinance, finalize public notice and credit language, and return the item to the council for further consideration in January.

Next steps: Staff will draft revised ordinance language, coordinate public notification, and could seek an opinion from the Arkansas attorney general or wait for any relevant state legislative action before returning the matter to the council. For now the October ordinance will not take effect until at least March 31, 2025.

Sources: City attorney Kit’s memo and council discussion at the Dec. 17 Fayetteville City Council meeting, public comments from renters and renter-advocacy groups.