Montana: Rental Application and Tenant-Screening Fee Requirements
The short answer
Montana's current application-fee rule applies to a statutory property manager of four or more dwelling units. If the applicant does not enter a signed or legally equivalent rental agreement, the manager must refund the fee within a reasonable time, retaining only costs allocated in a written notice given at collection for services actually performed. A cost is the manager's out-of-pocket expense for a specific application service, not payment for the manager's time or effort; wrongful withholding creates dollar-for-dollar damages and possible prevailing-party attorney fees.
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This is the general rule in Montana. Ezel applies current Montana law to your specific facts and answers with citations to the statutes.
| Governing law and coverage | Mont. Code Ann. § 37-56-109; statutory property manager of 4+ dwelling units, with property manager broadly defined by § 37-56-101(2) |
|---|---|
| Fees allowed or prohibited | Application fee recognized; for unsuccessful applicant, manager may retain only written-notice allocations for specific services actually performed (§ 37-56-109(1)-(2)) |
| Maximum charge and adjustment | No numeric, per-applicant, per-household, or indexed ceiling; unsuccessful-applicant retention limited to out-of-pocket service costs, excluding manager time/effort (§ 37-56-109(2), (4)(b)) |
| Permitted costs and charge timing | Cost means out-of-pocket expense for a specific pre-approval/disapproval service, including but not limited to credit check; no manager-time/effort charge; refund rule applies if no qualifying rental agreement (§ 37-56-109(1), (4)(b)) |
| Before-screening disclosures | At fee collection, written notice must allocate portions of total fee to each specific service cost; no unit-availability, screening-criteria, report-source, dispute-right, or application-order disclosure (§ 37-56-109(2)) |
| Receipt, report copy, and refund | If no signed or legally equivalent rental agreement, refund within reasonable time, less disclosed costs for services actually performed; no special receipt or screening-report-copy duty (§ 37-56-109(1)-(2)) |
| Applicant-supplied or reusable reports | No statewide applicant-supplied or reusable screening-report acceptance or no-fee procedure |
| Application order and adverse action | No statewide first-in-order, first-qualified, single-application, or state denial-reason notice process for rental applications |
| Remedies and stronger local rules | Wrongfully withheld amount recoverable as damages; court may award prevailing-party attorney fees; manager bears proof of application services rendered; no local-preemption/stronger-local-law clause (§ 37-56-109(3)) |
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A refund rule for covered property managers
Montana Code Annotated § 37-56-109 applies when a statutory property manager of
four or more dwelling units requires an application fee before renting a
dwelling unit. Section 37-56-101(2) broadly defines property-management activity
to include procuring tenants, showing rentals, acting between owners and
potential tenants, and representing that the individual performs those tasks.
If the applicant does not become a party to a signed rental agreement, the
manager must return the fee within a reasonable period. The same rule applies
when no unsigned agreement gains equivalent legal effect under § 70-24-204
through acceptance of rent, possession, and payment in the circumstances that
section describes.
Written allocation and costs actually incurred
If the fee includes specific service costs, § 37-56-109(2) requires written
notice at collection showing the portion of the total fee allocated to each
cost. For an applicant who does not enter the qualifying rental agreement, the
manager may retain only a cost that:
- appeared in that written allocation; and
- relates to a service actually performed.
Even a disclosed cost must be refunded if the service was never performed.
Subsection (4)(b) defines cost as the manager's out-of-pocket expense for a
specific application service performed before approval or disapproval,
including but not limited to a credit check. It expressly excludes payment for
the manager's time or effort in arranging or performing the service.
The statute sets no numeric, per-applicant, per-household, or indexed ceiling.
Its cost limitation is part of the refund calculation for the applicant who
does not enter the rental agreement.
Damages and proof
Under § 37-56-109(3), a person who wrongfully withholds or deducts any portion
of the fee is liable to the applicant for the amount wrongfully withheld. The
court may award attorney fees to the prevailing party. The property manager
bears the burden of proving the services rendered in connection with the
application.
The section states no application-fee-specific local preemption or express
preservation of stronger local rules.
What trips people up
The current statute is not the introduced bill. The current code applies to
a property manager of four or more dwelling units. Earlier bill text used the
broader phrase “landlord or manager,” but that is not the enacted wording.
Written allocation alone is not enough. The manager must also prove the
service was actually performed, and may never retain the manager's own time or
effort as a “cost.”
“Reasonable period” is not a fixed number of days. The statute does not
convert that phrase into a 10-, 20-, or 30-day deadline.
Common questions
Does Montana impose a fixed dollar cap? No numeric maximum appears in the
section. The unsuccessful-applicant refund is reduced only by qualifying
disclosed costs for services actually performed.
Must the manager give me a screening report? The statute requires a written
cost allocation, but no special copy of the credit, background, or screening
report itself.
Does Montana require reusable reports? No statewide applicant-supplied or
reusable-report procedure appears in the current statute.
What can I recover if money is wrongfully withheld? The wrongfully withheld
amount, with attorney fees available to the prevailing party at the court's
discretion.
Statutes and sources
- Montana Code Annotated § 37-56-109 — refund, written cost allocation,
permitted retention, damages, and definitions.[T]he property manager may retain only the costs specified in the written
notice for services actually performed and shall refund the balance ...
The term does not include a fee for the property manager's time or effort.
Official source: https://mca.legmt.gov/bills/mca/title_0370/chapter_0560/part_0010/section_0090/0370-0560-0010-0090.html (accessed 2026-07-21)
- Montana Code Annotated § 37-56-101(2) — property-manager definition.
“Property manager” means an individual who engages in the business of
leasing, renting, subleasing, or other transfer of possession of real estate
located in this state without transfer of the title to the property.
Official source: https://mca.legmt.gov/bills/mca/title_0370/chapter_0560/part_0010/section_0010/0370-0560-0010-0010.html (accessed 2026-07-21)
- Montana Code Annotated § 37-56-104 — exemptions from property-manager
licensing requirements.
The property manager licensing provisions of this part do not apply to ...
Official source: https://mca.legmt.gov/bills/mca/title_0370/chapter_0560/part_0010/section_0040/0370-0560-0010-0040.html (accessed 2026-07-21)
- Montana Code Annotated § 70-24-204 — rental agreements given effect
without both signatures.
[A]cceptance of possession of the premises and payment of rent without
reservation by the tenant gives the rental agreement the same effect as if
it had been signed and delivered by the tenant to the landlord.
Official source: https://mca.legmt.gov/bills/mca/title_0700/chapter_0240/part_0020/section_0040/0700-0240-0020-0040.html (accessed 2026-07-21)
Source links
Every statute quoted above, linked, with the date we checked it.
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