Can the City of Fayetteville cap the application and background-check fees that landlords charge prospective tenants, or does Arkansas state law preempt that kind of price regulation?
Subject
Whether the Fayetteville City Council has authority to enact Ordinance 6800, which capped landlord-charged rental application fees ($20 with no background check, $40 with background check) and required refunds when no background check is actually obtained. The opinion follows up on AG Op. 2024-093, which addressed the same Fayetteville ordinance in more detail.
Plain-English summary
In October 2024, Fayetteville passed Ordinance 6800. The ordinance capped what landlords could charge prospective tenants for rental applications and background checks, and required landlords who collected a background check fee but didn't actually obtain a background check to refund the fee in full. Council delayed the ordinance's effective date to March 31, 2025, while waiting for an AG opinion.
Representative Whitaker asked two questions:
- Does a city have legal authority to regulate landlord application/background-check fees?
- Do A.C.A. §§ 14-54-1409 (rent-control prohibition) or 14-43-608(a) (municipal price-regulation preemption) conflict with that authority?
The AG concluded that the city does not have that authority. Section 14-43-608(a) preempts municipal regulation of the price of these services. By contrast, the existing version of § 14-54-1409 only prohibits local governments from enacting rent-control ordinances, and rental application fees are not "rent" in the rent-control sense. So § 14-54-1409 does not by itself reach this ordinance. But the AG flagged Senate Bill 91 of the 95th General Assembly, which (if enacted) would expand § 14-54-1409 to expressly cover rental application fees and rental deposits.
The AG incorporated by reference the longer analysis in AG Op. 2024-093, the parallel opinion on the same ordinance.
The bottom line: Fayetteville's Ordinance 6800 likely conflicts with state law, specifically with § 14-43-608(a)'s preemption of municipal price regulation. The remedy would be repeal of the ordinance, court invalidation, or an amendment to harmonize it with the state preemption.
What this means for you
If you are a city attorney drafting a tenant-protection ordinance
Section 14-43-608(a) is the trap. Anything that sets a price ceiling, a price floor, or otherwise directly regulates "the price" of a service in Arkansas is likely preempted. There is room for non-price regulation: refund-requirements tied to specific abusive practices, disclosure ordinances, anti-discrimination ordinances. But "you may not charge more than $X" almost certainly fails.
If you are a city council member considering rental-market regulation
Repeal or amend any cap-style ordinance before it takes effect to avoid being struck down. If your goal is consumer protection in the rental market, refocus on disclosure (require itemization of fees), refund triggers (when a service was paid for but not actually performed), or anti-discrimination provisions, all of which are less likely to fall on § 14-43-608(a).
If you are a landlord or rental property manager
Until and unless the Arkansas legislature changes the law, you can charge what the market bears for application and background-check fees, subject to general state law. A locality cannot cap them. But a refund triggered by a service that was charged for but not actually performed (the Fayetteville-style refund obligation) may have an independent contractual basis even without ordinance authority.
If you are a tenant in Arkansas
If your local ordinance promises a fee cap, treat it as legally uncertain. State law preempts the regulation. The practical protection comes from comparison shopping, written fee disclosures from landlords, and (if a fee was paid for an undelivered service) a small-claims action for breach of contract.
If you are an Arkansas legislator
If you support municipal authority to cap rental application fees, the legislative path is to amend § 14-43-608(a) to carve out application fees, or to expressly authorize municipal regulation. Passing local ordinances under existing law will keep getting struck down.
Common questions
Q: Is Ordinance 6800 still in effect?
The opinion notes that the city delayed the effective date to March 31, 2025, in anticipation of this AG opinion. Whether the ordinance was subsequently repealed, allowed to take effect, or challenged in court is outside the scope of the opinion. Check current city records for the ordinance's status.
Q: What does § 14-43-608(a) actually say?
The opinion cites it as preempting municipal regulation of the price of services like landlord rental applications. The text bars cities from regulating the price of those services. The full text is in the Arkansas Code; the AG read it as squarely covering the Fayetteville ordinance.
Q: Why doesn't § 14-54-1409 reach the ordinance?
As currently written, § 14-54-1409 prohibits rent control: ordinances setting a price for rent itself. Application fees and background check fees are charged before tenancy and are not "rent." The AG read § 14-54-1409 narrowly on this point, noting that the legislature could broaden it (and SB 91 would).
Q: Did the AG decide whether Fayetteville's refund requirement (if a fee was charged but no background check obtained) is also preempted?
The opinion does not break out the refund requirement separately. The AG referenced the longer Op. 2024-093 by reference. A future challenge could test whether the refund-on-non-performance piece survives even if the price cap is preempted.
Q: What's Senate Bill 91 of the 95th General Assembly?
A bill (still pending as of the opinion's date) that would expand § 14-54-1409 to bar local governments from adopting ordinances "that limit the amount private entities may charge for rent, rental application fees, or rental deposits." If enacted, it would double up on the preemption already provided by § 14-43-608(a) and remove any doubt about the AG's conclusion here.
Background and statutory framework
A.C.A. § 14-43-608(a). Preempts municipal regulation of the price of services. The AG read this as squarely covering rental application fees and background check fees, both of which are services priced in the marketplace.
A.C.A. § 14-54-1409 (current). The rent-control prohibition. As currently written, it bars local rent control ordinances but does not reach application fees or rental deposits.
Senate Bill 91 of the 95th General Assembly (proposed). Would extend § 14-54-1409 to expressly bar local governments from limiting the amount private entities may charge for "rent, rental application fees, or rental deposits."
Fayetteville Ordinance 6800 (2024). Capped rental application fees at $20 (no background check) or $40 (with background check), and required full refunds where a background check fee was collected but no check was actually run. Effective date delayed to March 31, 2025.
Citations
- A.C.A. § 14-43-608(a) (municipal price-regulation preemption)
- A.C.A. § 14-54-1409 (rent-control prohibition)
- Senate Bill 91, 95th General Assembly (proposed)
- Ark. Att'y Gen. Op. 2024-093 (companion opinion)
Source
Official summary
Question 1: Does a city, by and through its governing city council, possess the legal power and authority to regulate the amount a landlord may charge a prospective tenant to review a rental application or any background check?
Brief response: No. A city cannot regulate the amount a private landlord may charge a prospective tenant to review a rental application or conduct a background check.
Question 2: Would state law, possibly Arkansas Code § 14-54-1409 or § 14-43-608(a), conflict with a city's authority to regulate such fees charged by landlords to accept and analyze rental applications or background checks?
Brief response: While A.C.A. § 14-54-1409 does not prohibit a city from regulating the fees charged by landlords to review rental applications or conduct background checks, A.C.A. § 14-43-608(a) does bar a city from regulating the price of those services.
Original opinion text
Opinion No. 2025-004
January 30, 2025
The Honorable David Whitaker
State Representative
717 North Lewis Avenue
Fayetteville, Arkansas 72701
Dear Representative Whitaker:
I am writing in response to your request for an opinion regarding an ordinance passed by the Fayetteville City Council on October 15, 2024, which caps the fees landlords may charge prospective tenants for rental applications and background checks. You state that "the ordinance limits background check fees to an amount not to exceed $40, and if no background check is done, the maximum rental application fee is limited to $20. If a landlord charges a background check fee and does not obtain the background check, the fee must be returned in full to the potential tenant."
You explain that the Fayetteville City Council has delayed the effective date of the ordinance until March 31, 2025, in anticipation of this opinion. Against this background, you ask the following questions:
- Does a city, by and through its governing city council, possess the legal power and authority to regulate the amount a landlord may charge a prospective tenant to review a rental application or any background check?
Brief response: No. A city cannot regulate the amount a private landlord may charge a prospective tenant to review a rental application or conduct a background check.
- Would state law, possibly Arkansas Code § 14-54-1409 or § 14-43-608(a), conflict with a city's authority to regulate such fees charged by landlords to accept and analyze rental applications or background checks?
Brief response: While A.C.A. § 14-54-1409 does not prohibit a city from regulating the fees charged by landlords to review rental applications or conduct background checks, A.C.A. § 14-43-608(a) does bar a city from regulating the price of those services.
DISCUSSION
I recently issued another opinion on this topic, in which I concluded that the City of Fayetteville's Ordinance 6800 likely conflicts with state law. I explained that A.C.A. § 14-54-1409 probably does not prohibit a city from regulating the fees that landlords may charge for reviewing rental applications or conducting background checks, but A.C.A. § 14-43-608 likely does. Rather than repeat that full analysis here, I incorporate it by reference, and I have attached a copy of that opinion for your review.
The current version of A.C.A. § 14-54-1409 only prohibits local governments from enacting rent control ordinances, not ordinances regulating fees related to rent applications, which is why I have opined that Ordinance 6800 does not conflict with A.C.A. § 14-54-1409. But as of the date of this opinion's publication, new legislation has been introduced that would extend that statute's scope. If this proposed legislation is enacted, it will bar local governments from adopting ordinances that limit the amount private entities may charge for rent, rental application fees, or rental deposits. See Senate Bill 91 of the 95th General Assembly.
Senior Assistant Attorney General Kelly Summerside prepared this opinion, which I hereby approve.
Sincerely,
TIM GRIFFIN
Attorney General