Missoula, MT – Montana lawmakers have passed a significant bill aimed at protecting renters from paying unused rental application fees. House Bill 311, signed into law by Republican Gov. Greg Gianforte, requires property managers to return application fees when the fee is not used to process an application.
The bill, introduced by Rep. Kelly Kortum, D-Bozeman, was crafted in response to concerns over what lawmakers described as “predatory business practices” in the state’s rental market. Kortum cited the growing trend of property managers collecting hundreds of dollars in application fees from prospective renters, even if they never intended to offer the rental unit to any of the applicants.
According to the bill’s supporters, this practice often creates what is referred to as a “housing lottery,” where renters are forced to pay multiple application fees in hopes of securing an apartment, only to face rejection each time. This situation can lead to renters losing hundreds, if not thousands, of dollars without ever receiving the rental units they applied for.
The new law seeks to address this issue by requiring property managers to refund application fees when the application is not processed. In a statement, Kortum emphasized that renters should not have to pay for a service they never receive.
“Every day, Montanans pay rental application fees but don’t get the apartment,” Kortum said. “Why are they paying for a service they never receive?”
The bill passed the legislature with bipartisan support, receiving a 68-29 vote in the House and a 34-14 vote in the Senate. Co-sponsors included members from both the Democratic and Republican parties, signaling broad agreement on the need for change.
House Minority Leader Katie Sullivan, D-Missoula, who also co-sponsored the bill, called it one of the most significant pieces of renter-friendly legislation in Montana in recent years. Sullivan stated that HB 311 would make it easier for Montanans to find affordable housing and reduce unnecessary financial burdens on renters.
“Getting a roof over your head should not be a raffle or a lottery,” Sullivan said. “HB 311 would end the housing lottery and stop landlords from harvesting exploitative fees from hardworking Montanans.”
According to the National Low Income Housing Coalition, approximately 31% of Montana households are renters, with a significant portion earning at or below the area median income. The bill’s passage is seen as a step toward addressing the challenges renters face in a competitive housing market.
In an environment where application fees typically range from $35 to $75 per person, according to Realtor.com, the new law is expected to reduce the financial strain on renters, especially those who are already struggling to find affordable housing.
HB 311 is part of ongoing efforts by lawmakers to improve housing affordability in Montana. By eliminating the practice of charging non-refundable application fees, supporters of the bill hope to make housing more accessible and less financially burdensome for the state’s renters.
As the law goes into effect, it will likely serve as a model for other states grappling with similar issues in their rental markets, offering a clearer path toward protecting renters from unfair business practices.
