Bill to return housing application fees clears Legislature

Micah Dew

(Daily Montanan) Rep. Kelly Kortum, D-Bozeman, told his colleagues during a committee hearing last month that he wanted to solve a common problem for Montana renters.

“When folks apply to an apartment, a certain apartment might get 20 applications. The second person might get the apartment, (but) 18 application fees might go into the pocket of the property manager,” Kortum told the Senate Business, Labor, and Economic Affairs Committee.

His bill, House Bill 311, would require property managers to refund application fees to prospective renters who are not selected for an apartment or home.

Kortum said his bill would fix bad business practices and protect consumers, especially workers and college students.

HB 311 passed a final vote in the Legislature on Tuesday, and is on its way to Gov. Greg Gianforte’s desk for a signature or veto.

The bill drew bipartisan support in both chambers, but had a rough start in the House, where lawmakers in the House Judiciary Committee tabled the legislation. Opposition to the bill, stemming mainly from the Montana Landlords Association and Montana Association of Realtors, had expressed concerns that the law would be put into the wrong section of code, and would target small property managers or individual landlords who would have to take extra steps to return fees.

Proponents included the Associated Students of the University of Montana, the Montana Budget and Policy Center, and Joey Morrison, Deputy Mayor of Bozeman. They argued the bill was part of the affordable housing fix by helping to stabilize low-cost housing and keeping students and workers in the towns they live and work in.

“Every day, Montanans pay rental application fees but don’t get the apartment,” Kortum said during the committee hearing. “Why are they paying for a service they never receive?”

A successful blast motion on the House floor — wherein the entire body votes to override a committee action — brought the debate to chamber.

“Last spring, I found myself in this position. I spent nearly $1,000 in six weeks applying for rentals here in Helena,” said Rep. Julie Darling, R-Helena. “I don’t have a thousand extra dollars — and I have a really good job — I don’t know how somebody else making minimum wage does this.”

The bill passed 63-31, with 26 Republicans joining all Democrats.

In the Senate, Business and Labor committee amended the bill, following discussions with Kortum and some opponents, to change where the bill would be put into Montana Code Annotated, adding it to a section where property managers are regulated. The committee also amended the bill to target property managers who oversee four or more properties, exempting individual landlords and small management companies.

The Senate approved the bill with bipartisan support 32-14.

Kortum brought a similar bill during the 2023 session and in 2021 a Bozeman senator also proposed an application refund law, but neither garnered much support.

Democrat leaders in the Legislature praised the bill’s passage on Tuesday and urged the governor to sign it into law.

“Getting a roof over your head should not be a raffle or a lottery. HB 311 would end the housing lottery and stop landlords from harvesting exploitative fees from hardworking Montanans,” House Minority Leader Rep. Katie Sullivan, D-Missoula, said in a press release. “If signed, Democrats’ HB 311 would be one of the most significant policies enacted for renters in the last four years.”