Screening Fee amount (is it OK to charge more than $25 in WI?)

[Bruno P.]

Hello!

I'm using a property management software (TurboTenant) for rental applications and screening reports, and they charge each prospective tenant $45 for this service.

However, the Wisconsin State Legislature states that the landlord can only charge the actual cost of a credit report (up to $25). If the tenant is from another state, a background check cost of up to $25 may also apply (sec. 704.085).

It is unclear to me if I am actually in breach of this rule by charging the tenant more than the $25 limit, even though it is through a third party. Additionally, ATCP 134.05 says that if the tenant provides a consumer credit report from an agency that compiles and maintains files on consumers on a nationwide basis and it is less than 30 days old, the landlord may still run a credit check but at its own expense.

When I inquired with the company, they replied: "These laws are in place to ensure that you, as a landlord, are not profiting by incentivizing multiple applicants to apply when you have no intent to rent to them. As a third-party software company that does not own or manage any properties, we charge renters a screening fee, not an application fee. This charge covers the cost of generating the screening and background reports."

I understand that these rules vary depending on the state, but any thoughts on this? It is such a common practice for these management software companies to charge these fees, so I assume it is not an issue, especially since they are a third party and the fees cover more than just the credit checks.

Any insight is helpful!

Thank you!