Why do property managers charge tenant screening fees?

Why renters ask this

Screening fees show up on almost every rental application in Colorado. For many renters, it feels like paying just to be considered. When you’re applying for more than one place, these fees add up fast. So it’s natural to ask: why do property managers charge screening fees at all, and what’s actually behind the cost?

Here’s a clear look at how these fees work, when they’re allowed, and how Colorado’s portable screening law changes what renters can be charged.

The short answer

Property managers charge screening fees to cover the cost of pulling a consumer report and reviewing your application. Colorado law allows these fees, but it also limits them. If you give a property manager a valid portable tenant screening report (PTSR), they can’t charge you an application fee or a fee to access that report, as required by HB23-1099.

Why do property managers charge tenant screening fees?

Screening fees pay for the tools and services managers use to check information in an application. That usually includes a credit report, income or employment checks, rental history, and sometimes criminal and eviction records. These are third-party services, and most property managers pass the cost to renters.

Colorado law recognizes this practice, which is why it created limits. A manager can charge the same fee to everyone applying for the same home, but they can’t charge different people different amounts for the same unit. If a renter provides a valid PTSR, the manager can’t collect a fee at all.

In short, the fee is meant to cover screening, not create a barrier.

Does a screening fee guarantee your application will be approved?

No. A screening fee only covers the cost of reviewing your information. Approval still depends on the property manager’s own criteria. Colorado law makes a clear distinction between accepting a report and approving an applicant. Rentell follows that same distinction: we verify information, but property managers make the decisions .

How Colorado’s portable screening law changes things

Colorado’s Portable Tenant Screening Report law (HB23-1099) gives renters the right to reuse a recent, verified report instead of paying new fees every time. When you provide a valid PTSR, the property manager must accept it as your screening report in most cases, and they can’t charge you an application fee or a fee to access it .

To be valid, a portable report must include the required screening components, come from a consumer reporting agency, be completed within the past thirty days, and be accessible to the manager at no cost. If your report meets those criteria, it replaces the need for a new paid screening. You still go through the property manager’s criteria, but you don’t pay again for the screening itself.

The law includes a narrow exception for managers who only take one fee at a time for a home and refund unused fees within twenty days. Everyone else must accept a valid PTSR.

Where the fee actually goes

Screening fees usually cover:

• The consumer report the manager orders

• The cost to process or review the report

• Administrative time related to the application

Renters never see these internal costs directly. That lack of transparency is part of why Colorado created stronger rules around fairness, disclosure, and alternatives like portable reports.