Fees for residential applicants are fairly common in most States, with some States having mandated rules about how a fee should or should not be applied, should or should not be refunded, and should and should not be disclosed, whereas other States pretty much leave the rules of the road up to the Landlord. The basic premise behind a rental application fee is that the management of the dwelling unit wants to get reimbursed their expenses for the payment of receiving a current credit report as well as being compensated for the labor expense in so doing.
There are, however, some very basic issues with rental application fees in the first place. For instance, it should be fully disclosed to the rental applicant from the get-go as to how much the fee will be, what the fee does or does not cover, and options should be given to the applicant to mitigate the fee. That is to say, it's unfair to the potential renter to go from place-to-place and have to suffer the expense of rental application fees again and again, especially if the applicant can simply provide the necessary information to the Landlord that will satisfy the background check that they are initiating. Given that the general point of the fee is simply for the property management to get reimbursed for their actual expenses incurred plus a modest amount for "time spent" in doing so, and that the fees are not suppose to be a profit center for the Landlord, you would think that most Landlords would be delighted to display clearly the roadway that the proposed tenant needs to take in order to alleviate the time and expense of running a background report when the applicant is willing to provide such timely information themselves.
However, it seems to be in practical terms, that many Landlords purposely obfuscate the rental application process in such a manner that they actually do desire the rental application fee from prospective tenants because although they protest that it isn't something that they make money from, they do indeed, profit from these applications. First off, they profit from any difference in what they are charged from a credit bureau as compared to what they charge the tenant; further they profit from whatever they charge from a necessary expense for time spent doing so, in the obvious manner that these house employees are typically paid by the hour, so whether they handle zero or ten applicants on a given day, won't affect the amount of money that they are paid, although it might well affect how their time is allocated on a given day, meaning that from a bottom line basis, it is the owner/upper management from said company that will primarily benefit from these fees.
The fact of the matter is that most people applying for rental property don't have an excessive amount of extra money just laying about, that they can readily afford to spend in simply applying for tenancy. This means that in fairness to tenants, clearly display within all rental offices, should be the steps/documents that are required in order to successfully fulfill the tenant obligations so that, if desired, the tenant upon meeting these conditions, will not need to pay a fee. Not only does that seem more than fair, as well as being far more efficient, it will remove the temptation from Landlords to wring from the hands of potential tenants, money that would be far better applied to actually tenancy of property rather than subsidizing the profit and overhead departments of Landlords.