$50 for credit check: a bargain for two, a rip-off for one

Question: My wife and I are interested in renting a town house that requires a $50 application fee. Is this for a credit check? What if the manager takes a number of applications knowing he is interested in only one tenant? Is this legal? The application also says that, once approved, we have to pay the first month’s rent within 24 hours. Is that legal? Finally, is the owner responsible for making repairs before I give him the first month’s rent?

Answer: This fee is probably being charged to cover the cost of credit checks on you and your wife. Owners are within the law to charge each applicant $39 for a residential rental to run a credit report. (The amount permitted rises annually with the consumer price index, but the law does not specify whether it’s by the local, state or federal CPI so the dollar figure quoted may vary depending on whom you ask. The California Apartment Assn., for example, gives $40.64 as the upper end.)

In any case, if this owner is charging you only $50 for two screenings (you and your wife), you should consider yourself lucky. If the owner is charging you $50 for each of the screenings, you are being overcharged.

Also, if an owner takes several rental applications knowing that he is interested in only one tenant, he cannot legally profit by keeping the fees of the applicants on whom he is not doing credit checks. He must either run the credit checks or refund the money.

You also ask if it is legal for an owner to require the first month’s rent within 24 hours of approving your application. That is legal.

As for repairs, the owner is not responsible for making them before you move in, but it is always wise to get them done before renting an apartment.

Here’s how rent increases work

Question: My city of Los Angeles rental lease is due to be renewed in May. I read in your recent column that the amount of the annual inflation rent increase for rent-controlled apartments will go down from 5% to 3% on July 1. Does that mean our landlord can increase the rent by 4% for the whole year, or will he have to charge 4% for the months of May and June and then reduce it to 3% on July 1?

Answer: It means neither. These are annual rent increases under L.A.’s rent control law. Last year’s annual rent increase of 5% is good for a full year, ostensibly until May 1, if that was the effective date of your last rent increase.

If your rent is increased again this year in May, it can be increased by 5% again, the lawful amount of increases, until July 1, 2008. If you get a 5% rent increase in May, it will remain in effect for another full year. Then, in May of 2009, if you are still living in the apartment, the owner will be limited to increasing your rent by only 3%.

Negotiated terms remain in effect

Question: I have been renting a house from my neighbor- friend for almost five years. He recently died. Last year, he raised the rent about 10%. I said OK because it was the first time. But he also changed the deal by making me pay the water and sewage bills. My friend’s family says my rent and terms will stay as is, but I feel I should not be responsible for the sewer charges or the huge amount of water used by the pool. Where do I stand?

Answer: Everything is negotiable. Last year, you negotiated a rental deal with your friend after five years without a rent increase. Absent new negotiations changing that deal, you have no legal right to quit paying these charges. If your current rental expenses, including sewer and water, are below market rates for similar accommodations, silence may well be golden.

Kevin Postema can be reached at Apartment Age, 621 S. Westmoreland Ave., Los Angeles, CA 90005. Or e-mail him at aptlifeaagla@aol.com.