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Bill to rein in rental application and deposit fees weakened before first hearing

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by Michael Lyle, Nevada Current

Nevada lawmakers have revived efforts to crack down on landlords collecting unlimited application fees on a single unit and add some transparency to fees associated with rentals. 

Ahead of its Wednesday hearing in Senate Commerce and Labor, Senate Bill 78 was heavily amended to quell opposition by some landlords and lobbyists.

The bill, sponsored by Democratic state Sen. Fabian Doñate, also originally sought to lengthen the timeframe for no-cause evictions by 30 days and capped cleaning deposits at 15% of the rent, but those provisions were stripped away.

Jonathan Norman, the statewide advocacy, outreach and policy director for Nevada Coalition of Legal Service Providers, who presented alongside Doñate, said the legislation still aims to add some protections for renters.

“This bill is not creating more affordable housing,” Norman said. “It’s not lowering the cost of affordable housing. What it is doing is providing some transparency around fees and providing what I think are meaningful tenant protections.” 

Doñate said housing costs, including inability to afford high application fees and the lack of transparency in fees, were a common issue heard from people when he was campaigning in 2022. 

“Our housing crisis is a crisis and we have a moral obligation to put forward solutions that will uplift our residents,” he said. 

If passed, the bill would prevent a landlord from charging an application fee to other prospective tenants “unless the application or applications for that dwelling unit have been denied.”

The legislation doesn’t specify any enforcement mechanism to ensure landlords aren’t charging multiple renters seeking one unit. While the bill limits application fees from exceeding “the direct and actual costs of the landlord in processing the application, including reasonable personnel and administrative costs,” it doesn’t place any specific caps on how much can be charged nor identify what is deemed reasonable.

Similar legislation to rein in deposit and application fees was killed in the 2021 session after facing steep opposition from landlords and real estate.

In order to appease some groups opposed to SB 78, other provisions of the legislation were amended at the behest of industry groups. 

The bill originally sought to mandate all fines and costs associated with a rental unit be placed on the front page of the lease.  

An amendment brought forward by Ovation Development Corp, a real estate development company, changed it to allow landlords to either put a list of all fees either on the front page or in an addendum that is signed by a landlord and tenant.

Democratic Committee Chair Pat Spearman questioned why the requirement to put it on the front page had been removed from the bill. 

“I think the front page is obviously better but sometimes you have to give away things that you like in order to reach a consensus,” Norman said. 

Mackenzie Warren Kay, a lobbyist for Ovation Development, still only testified in neutral even with the amendment.  

Prior to the session, Legal Aid Center of Southern Nevada outlined legislative priorities that included reining in application fees and addressing evictions.   

While the portion on no-cause evictions, when a landlord can evict a tenant without a reason after their lease expires, was stripped from SB 78, Norman said he is still “having ongoing discussions with industry” about other efforts to address no-cause evictions. 

Despite some concessions on the bill, the Nevada Apartment Association still opposed it. 

Housing justice advocates, labor groups including the Culinary Union, and even some landlords, testified in support, speaking of people paying hundreds if not thousand dollars in fees and still not securing an apartment.

Paul Catha, speaking on behalf of the Culinary Union, said hidden rental application fees not only hammer tenants but also hurt Nevada’s economy. 

“This bill will protect Nevada’s residents, and its economy, by making the housing market more affordable and more predictable,” he said. “Regulating application fees, connecting other fines and fees to cost, and requiring transparency around fees will help keep Culinary Union members in their homes.”

Even Doñate said he experienced trouble with unscrupulous fees when applying for his apartment in Carson City. In addition to him and his roommate paying a $50 application fee, the landlord required a $150 administrative fee for an unspecified service on a two bedroom apartment listed for $1,850.

“When I mentioned I was seeking a six months lease due to my tenure in the legislature, the administrative fee increased from $150 to $700,” he said. “The rent was increased an additional $300 per month.”

The committee took no action on the legislation. 

Nevada Current
Nevada Currenthttps://www.nevadacurrent.com
Nevada Current is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Nevada Current maintains editorial independence. Contact Editor Hugh Jackson for questions: [email protected]. Follow Nevada Current on Facebook and Twitter.

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