Tight housing market leads to illegal application fees, rental scams

Published: Jun. 23, 2023 at 4:44 PM EDT
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WATERBURY, Vt. (WCAX) - With the tight housing market in the Green Mountain State, some prospective renters say they’re being asked to pay fees to apply for housing units, a practice that’s illegal under Vermont law.

William Erno lives in Waterbury with his wife but they were recently told by their landlord that they needed to pack up and go.

“It’s not something that you just expect to wake up to. I was sleeping and the mailman rang the doorbell, gave me a certified letter and it went from there. It’s been very emotional, very stressful for both of us,” Erno said.

The couple received a no-cause eviction notice giving them until September to vacate their apartment. Since then, he’s been on the hunt for rental housing in the state using sites like Facebook Marketplace and Craigslist. But when he finds a listing, Erno says he’s being asked to pay an application fee. “For us, to do an application fee for all these places -- by the time we get done and find a place, we’re not going to have money to move, we’re not going to have money to hire a mover, so then we’re back at zero,” he said.

The Vermont Legislature in 1999 passed a law making it illegal for landlords or their agents to charge an application fee. Maryellen Griffin with Vermont Legal Aid says while these fees are not allowed, the issue still exists, and with it comes the risk of scams “The application fees make it tempting for people to run scams, so a lot of people are losing money paying fees that aren’t owed anyways but are not even going to a real landlord,” she said.

Christopher Curtis, the Vermont Attorney General’s Consumer Protection Division chief, says housing scams are on the rise and Vermonters should be mindful. “Craigslist and Front Porch Forum -- while those are legitimate entities, a scammer can take advantage of people by posting fake ads, which might even contain pictures of real houses and real locations,” he said.

He says they have not received any complaints this year, but that 10 were filed last year and another eight were reported.

But Griffin says not everyone will report for a variety of reasons, including desperation to find housing. “Right now, with the housing market as tight as it is, people are having to apply to multiple places. They don’t really want to push the issue on application fees because they really need a place to live,” she said.

Back in Waterbury, Erno says he hasn’t paid any of the application fees, something the AG’s office says is the right move. They recommend going and seeing the place first, before agreeing to rent.