A Fair Screening Process Starts Before the Fee

When several applications arrive for one home, the hardest part is often deciding what happens next. A small housing provider needs time to review each household carefully, but asking people to apply without explaining the process creates confusion for everyone. Establish your procedure before the first application arrives. That procedure can include collecting a screening fee from each adult applicant whose application you accept for processing. What matters is that you follow the same process for everyone and account for each fee.

Start by writing down your screening criteria and the order in which applications will be considered. One workable policy is to review processable applications in the order they become complete and offer the home to the first household that meets your published criteria. Tell applicants how the queue works before they submit anything. A dated record of when each application became processable helps you follow your policy instead of deciding afterward which person you would prefer to review first.

Be equally clear about what makes an application processable. You might require an application and the stated supporting documents from every adult who will occupy the home. If something is missing, tell the household what is needed and give applicants the same opportunity to complete it under your stated procedure. Keep the original receipt date as well as the date it became complete, and explain which date controls its place in the queue. Consider a request for a reasonable accommodation individually; a standard paperwork rule does not erase that obligation.

HRS § 521-46 allows a screening fee when an application is processed for a dwelling unit. It may be charged only to an applicant who is at least 18 or an emancipated minor, and only to cover the cost of obtaining information about that person. Collecting a fee from each processable applicant as part of your uniform screening workflow can be appropriate, even while earlier applications are under review. The Office of Consumer Protection discusses collecting fees from multiple applicants before selecting a resident. It also makes clear that each fee must be accounted for separately.

Processing in order does not mean guessing at the cost. Hawaiʻi has no fixed statewide dollar cap, but the fee cannot become a charge for your time or a source of profit. If you collect $50 and spend $35 obtaining information about that applicant, return the remaining $15 within 30 days after submitting the screening request. If you collected a fee and never submitted a screening request for that person, the Office of Consumer Protection says to return the full amount. The statute does not set a deadline for that situation, so make the refund promptly.

A provider may stop processing applications when a household accepts the home under the announced selection policy. If fees were collected from people whose screening requests were never submitted, those applicants should receive their money back. This is why a fee record belongs beside the application record. Note when a report was requested and what was actually charged for that applicant. Record how any refund was delivered. If an applicant requests a receipt and a breakdown of the costs covered by the fee, HRS § 521-46 requires you to provide both.

Consistency is especially important under federal and state fair housing laws. Hawaiʻi prohibits different treatment in housing because of protected characteristics, and state law also protects participation in a housing voucher program for certain housing providers. Do not move someone to the front of the queue because you like them or hold an application back because of who the household is. Apply the same lawful written criteria while considering a reasonable accommodation request on its own facts. The record you keep should make your decision understandable without relying on impressions about the applicant.

The fee statute is only part of screening. If a consumer report contributes to a denial or another unfavorable decision, you have other obligations under the Fair Credit Reporting Act, including an adverse action notice. Use the screening company’s consent process and safeguard the information you receive. HRHPA’s screening forms can help you manage the financial side. A good process is one you can explain to an applicant and follow again when the next household applies.