Bill Description: Senate Bill 1042 would impose new regulations on landlords who charge an application fee to rental applicants.

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Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market?

Senate Bill 1042 would create Section 55-315, Idaho Code, to impose new regulations on property owners who charge an application fee to rental applicants. 

The bill would make it unlawful for a property owner or property manager to "charge rental application fees to more than two (2) rental applicant households per rental unit concurrently." 

It would also prohibit charging any application fee unless a rental unit is available within 60 days or a rental applicant "acknowledges in writing that no rental property is available and consents to being placed on a waiting list for future available rental units."

Before charging an application fee, the property owner or property manager would also be required to disclose "any criteria that the property owner or property manager will review as a condition of accepting the rental applicant as a tenant in the residential unit, including, if applicable, information related to the rental applicant's criminal history, credit score, income, employment or employment history, or rental history."

Additionally, the property owner would be required to "complete the criminal history and background check of the applicant for the available rental unit, unless the rental applicant is placed on a waiting list for future available rental units."

This provision is rather odd, as it seems to suggest the property owner must complete this check even if another factor (such as a low credit score) had already disqualified the rental applicant.

An additional regulation would say, "Rental application fees may only be charged to each rental applicant within a rental applicant household who requires a criminal history and background check." 

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In addition to these new regulations, the bill says, "All rental application fees shall conform to industry standards and shall be related to the actual costs of completing a criminal history and background check and any other costs incurred from processing the rental application."

Unlike bills from previous sessions that would have imposed a hard cap on application fees or what profit they may generate, this bill tries to do so indirectly by referencing "industry standards" and limiting the fee to "actual costs." 

These regulations and limitations on application fees are government interference in the market and limit the tools available to property owners to screen rental applicants in whatever manner the market supports. 

Prices and fees (in the private sector) should be set by the market, not by government. If a property owner charges an application fee that is higher than "industry standards" and the rental applicant is willing to pay it, government has no business interfering in this transaction.

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