Want to avoid legal trouble with your lease? We’re sharing the key fees you’re allowed to charge tenants in 2025, including deposits, pet rent, and more.
If you're a landlord in 2025, you're likely asking this question: What fees am I actually allowed to charge tenants?
It's a smart question to ask. In today's rental market, the line between fair fees and illegal ones is thin. One wrong charge could result in a complaint, a refund, or worse, legal action.
Let's walk through the most common tenant fees that are legal and which ones to avoid, so you can stay protected and keep your business running smoothly.
1. Security deposits. A security deposit is still one of the most common and legally accepted fees landlords can charge. Most states allow landlords to collect one to two months’ rent as a deposit, though some states limit the amount. For example, California caps security deposits at two months’ rent for unfurnished units and three months for furnished ones.
It's also important to return deposits within the time frame your state requires, usually within 14 to 30 days after the tenant moves out.
2. Application and screening fees. You’re allowed to charge a fee to cover the cost of background and credit checks. However, you cannot overcharge. In many states, you're limited to the actual cost of screening, and you must provide a receipt upon request. As of 2025, California sets a maximum application fee of around $63, adjusted yearly for inflation.
Also, keep in mind that some states, like Massachusetts, ban application fees altogether, so always check your local law first.
3. Late fees and bounced payment charges. Late fees are legal if included in the lease, but they must be considered “reasonable.” Many states cap this at 5 to 10 percent of the monthly rent. Accordingly, courts will often strike down fees that seem punitive rather than compensatory.
Returned check fees are also allowed, typically up to $25 to $50, depending on state law.
“Charging fees the right way protects your income and your reputation.”
4. Pet fees and pet rent. Many landlords charge either a one-time pet fee or a monthly pet rent. These are generally legal, provided they are clearly stated in the lease.
However, landlords are not allowed to charge fees for service animals or emotional support animals. This is protected under the federal Fair Housing Act, which treats these animals as medical necessities, not pets.
5. Lease break or early termination fees. If a tenant wants to leave early, you can charge a lease break fee if it’s clearly stated in the lease agreement. However, landlords still have a legal duty to try to re-rent the unit. Accordingly, this duty to "mitigate damages" means you cannot collect rent for months if you’re not actively trying to find a new tenant.
6. Optional fees. You are allowed to charge fees for optional services, like storage, garage space, or utilities, as long as they are clearly outlined in the lease or a written agreement. If they are not in writing, they likely won’t hold up in court if challenged.
What you should avoid. Some common charges that are not allowed in many states include:
* Non-refundable move-in fees (unless clearly permitted by state law)
* Administrative or processing fees with no clear value
* Charging extra fees without written agreements
* Pet fees for support animals
To stay on the safe side, avoid creating custom fees that are not backed by state law or legal precedent. When in doubt, ask an attorney or a property management expert.
Although these guidelines generally apply nationwide, it's important to remember that laws and regulations can differ by state, and sometimes even by city. We recommend reviewing local regulations and speaking with property managers in your area to ensure you remain compliant with current rules and industry practices.
Charging fees the right way protects your income and your reputation. The key is transparency, legal compliance, and clear lease agreements. Always check local and state regulations before adding new fees, and make sure your tenants know what they are agreeing to.
If you want help reviewing your lease or updating your fee structure, feel free to reach out. We offer free consultations to help landlords stay compliant while keeping their rentals profitable. We look forward to hearing from you!
