A bill that saves Montana renters money in unused application fees was signed into law by Republican Gov. Greg Gianforte.

In a statement Monday, House Minority Leader Katie Sullivan, D-Missoula, described it as “one of the most significant policies enacted for renters in the last four years.”

Sponsored by Rep. Kelly Kortum, D-Bozeman, House Bill 311 requires property managers to return rental application fees when they aren’t used to run the application.

Kortum brought the bill forward to address “predatory business practices” he saw in Bozeman, according to a news release from House Democrats.

Co-sponsors included Democrats and Republicans in the House and Senate.

The news release said property managers can “harvest” hundreds of dollars in application fees from prospective renters without intending to award a unit to any of them.

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

An estimated 31% of Montana households are renters, or 137,485, according to the National Low Income Housing Coalition. Of those, it said 22% earn at or below the area median income.

But renters can end up paying hundreds, “if not thousands,” of dollars in application fees in a de facto “housing lottery,” as they look for a place to live, the news release said.

In a story last month, Realtor.com estimated the cost of application fees at $35 to $75 per person in the nation, although it said amounts range depending on location.

House Democrats described HB 311 as a priority bill that will make “finding a home much cheaper.”

In a statement, Sullivan, a co-sponsor, said the bill shows Democrats are delivering to make housing more affordable in Montana.

“Getting a roof over your head should not be a raffle or a lottery,” Sullivan said. “HB 311 would end the housing lottery and stop landlords from harvesting exploitative fees from hardworking Montanans.”

The bill passed the legislature with bipartisan support passed the legislature with bipartisan support, 68-29 in the House and 34-14 in the Senate.

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