Delaware application fee law: the greater of 10 percent of rent or $50, a receipt and records
Delaware 25 Del. C. 5514(d) lets a landlord charge a fee to check credit worthiness, up to the greater of 10 percent of the monthly rent or $50. A receipt is required, records are kept for two years, and an unlawful demand costs double.
How big can the fee be?
The statute calls any fee a tenant must pay to determine credit worthiness an "application fee." A landlord may charge one, not to exceed the greater of either 10 percent of the monthly rent for the unit or $50. Because of the "greater of" wording, the $50 floor protects low-rent units and the percentage allows more for higher rents.
| Monthly rent | 10 percent | Most you may charge |
|---|---|---|
| $400 | $40 | $50 |
| $800 | $80 | $80 |
| $1,250 | $125 | $125 |
| $1,900 | $190 | $190 |
The statute states a fee limit, and nothing in this subsection says the cap must also cover the cost of a third-party report. Read the fee as a single charge to check credit worthiness and keep it inside the ceiling.
What must you give and keep?
On receiving any money paid as an application fee, the landlord must furnish the tenant a receipt for the full amount paid. The landlord must also keep complete records of all application fees charged and amounts received for each fee for at least two years. Those two duties are easy to meet if the receipt is automatic and the ledger line is saved the same day.
What is the penalty?
Where the landlord unlawfully demands more than the allowable application fee, the tenant is entitled to damages equal to double the amount charged as an application fee. That is a clear reason to calculate the ceiling from the rent in the listing and not from habit.
Example a made-up unit rents for $600, so the ceiling is the greater of $60 and $50, which is $60. A landlord who charges $85 has demanded $25 too much. The tenant could claim double the amount charged, which is $170.
Setting a fee you can defend
Pick one fee per unit and base it on the rent in the listing, not on the applicant. Write the formula down: the greater of 10 percent of rent or $50. Raise it only when the rent changes. If you charge the same amount for every applicant for the same unit, you also avoid any argument that you treated people differently. Keep the receipt and the ledger line together for two years, and clear out nothing earlier. If a tenant disputes the amount, the formula and the listed rent answer the question in one step. When rent changes at renewal for a new listing, recalculate the ceiling the same day and update the fee setting, so an old figure never lingers. Keep the formula in your written application policy, and train anyone who answers applicant questions to quote it instead of guessing.
How DoorKeeping fits
DoorKeeping computes the ceiling from the listed rent, shows it beside your fee setting and issues the applicant a receipt automatically. Each fee is its own ledger line, which supports the two-year record duty. Tenants never pay a fee to DoorKeeping. Screening is passed through at cost. DoorKeeping never holds your money and sends a payment only when you approve it. This is general information, not legal advice. Check the current statute or ask a local attorney before you rely on it.
Sources
Questions
- What is the maximum application fee in Delaware?
- The greater of 10 percent of the monthly rent for the unit or $50 (25 Del. C. 5514(d)).
- Does a Delaware landlord have to give a receipt?
- Yes, for the full amount paid, and must keep complete records of application fees for at least two years.
- What is the penalty for charging too much in Delaware?
- Damages equal to double the amount charged as an application fee.