Has it Come to This – Rent Bidding Wars – are they even Legal?


“Dear PoPville,

I don’t know if anyone else has asked about this, but today we just got some bad news on an apartment we paid $55 dollars each to apply for. The application asked for W2s, paystubs, current and previous jobs, 5 years rental history with landlords’ contact information, SSN, Driver’s License number, make and model of car. My god, everything but our first born. After obtaining all of this info, paying the fee, and even writing a cover letter for this apartment, we were informed there were two other applications in and that the realtor would present them to the landlord, and he/she would decide who was the “best fit.” I later received a text message informing us, and I quote, “Hello. Thank you for taking the time to submit an offer. Owner received very aggressive offers. Unfortunately owner has accepted another application at this time. I will definitely let you know should property come back on the market. Many regards.”

I was curious why two young professional women with very good incomes (one of whom is a landlord herself) got turned down. So I called the realtor. She explained to me that the others had offered her substantially more money and that we shouldn’t have put the application in the first place.


If there had been a bidding war unbeknownst to us, wouldn’t it be best practice (maybe even the legal thing to do) to inform all your applicants of this before submitting an application, or at least before selecting, allow for all applications to make their best offers?

Now we are out $110 without even ever been seriously looked at – they didn’t even use this fee to run credit/background checks, or all any of our references.

Does anyone have any insight into this matter, legal or otherwise?”

81 Comment

  • I’m a landlord with a number of properties around town. To be honest, I didn’t know there were bidding wars either, but this is good to know for the future!

    • So, what is your stance, as a landlord, on this? Don’t you think, if not decent, it’s best business practice to let others throw a bid in or inform them others offered more?

      • It’s not a ‘bidding war’ initiated by the landlord, it’s a prospective tenant finding a way to make their tenancy more attractive. Landlords are laughing all the way to the bank.

      • I am a landlord and never accept higher bids. Why? Because I set a fair price and you are asking for trouble if you get a tenant paying too much. Does not make a good situation and I would rather have the best tenant rather than one offering a higher price. There were bidding wars a few years ago but seems strange now since the rental market isn’t so tight–I would look at higher bids even more skeptically today.

        • I’m a landlord and the past few times I sought new tenants I had people offer me more rent. I still went with the applicants that I just felt the most comfortable with – all other things – job, references etc. being equal of course! (And owners of rescue pets actually got extra credit because I know how hard it is to find a place with pets.)

      • I should say the following would mean more to me: offering to sign a longer lease (though companies probably care less about this) or paying mroe money up front (advanced rental payments, as described below, but I’ve never been offered that).

  • I ended up renting my place out at $100 over original asking, all upfront, and one month’s deposit (at the higher rate). The funny part about it is that it was the renters who proactively asked if they could give me more money, and not me. When you’ve got 15 applicants who are all basically identical, (in terms of income, credit, and references) it certainly makes it easier to discriminate on price alone. All of that said, I think the landlord/realtor should do a better job of aggressively pricing in the first place. I don’t think any favors are done when the price is artificially low and a bidding war breaks out.

  • justinbc

    It’s a very competitive market, things like this are pretty common, especially if you’re looking in one of the more popular areas where landlords can easily pick and choose who gets a place. Back when I was shopping to rent a few years ago I lost out on one place because a guy offered to pay $300/mo over their asking and pay 2 years in advance. The listing agent was nice enough to at least alert us to this when we applied, and they wound up not running our credit as a result because his offer was so good (and subsequently not cashing our checks). Have your checks actually cleared the bank yet? If not you may want to call and put a stop on them.

    • Foreign Service employee? Those guys always have crazy schemes for renting apartments (multiple years in advance, payment structure that declines every month, etc.)

  • This sounds like a shady real estate operation.
    I rent from a large real estate management company (Frank Emmet Real Estate) and they stated that they would not cash our application checks ($50 per person) unless we were selected to receive the apartment. The money would be used to run credit/background checks and draft up the lease documentation. Anyone who wasn’t selected for the apartment would have their checks destroyed.
    That’s always been the standard operating procedure for every place I’ve rented in NYC and DC. I’d check with Tenant’s Advocacy Office and see what the law says about application fees. This doesn’t pass the smell test.

    • that doesn’t seem to be common practice from my experiences, typically your application fee is nonrefundable. it costs money to run someone’s credit and most landlords aren’t going to decide if someone should receive an apartment until they know their credit history.

      • You don’t have to run everyone’s credit. Run the leading candidates credit, however you choose them, wait for the results and if they pass then shred the other applications/checks. It’s not that hard and it’s preciously the procedure that our current landlord told us they would follow when we applied a couple months ago.

        • This is how it was done for every place I’ve rented. Leading/first-to-submit applicant gets their check cashed first. If something turns up in the background check, you inform the candidate that their application was not accepted and move on down the line of candidates.
          You don’t get “free money” in the form of application fees when they are not even in contention for the place – that’s fraud, IMHO.

      • The point is that the landlord should not be cashing the check unless he’s seriously considering you as a tenant at the agreed upon price. Turning around and asking more money strikes me as a deceptive business practice, considering that the “application fees” are usually significantly higher than the actual cost of running credit and tenancy checks.
        Like I said, this doesn’t pass the smell test. It’s best for the OP to go to the OTA and have them weigh in on this.

        • 100% agree! And $55/person? NOPE. $20, sure. What kind of credit report are they running that it costs $55? That’s the part of this that makes it seem super shady.

          • justinbc

            The one that I run (credit check and background check) costs $35/pp. I’ve never seen one as low as $20 or as high as $55.

          • I get a simple credit report for $16. There are fancier ones but they are not necessary.

          • I do not agree with this statement, but I bet they will try to say that the added money is their time/effort to organize the credit checks and process all of the applications.

  • It might be worth talking to a lawyer–if the landlord or realtor misrepresented the availability of the apartment at that price, you might be able to take them to small claims court and get your fee back. But most likely, you’re SOL. Please name and shame this landlord and realtor.

    • OP here. While I don’t want to slam the particular realtor, because he/she was very nice otherwise, the company was cosmopolitan properties.

  • LOL to Muriel Bowser!

  • We live in an instant gratification society, if someone walks up to you and offers you 6 months rent, or even a year (know a friend who did this) of rent up front, you’re going to take that offer. Sometimes a month isn’t enough.

    • Personally as a landlord I would be really hesitant for anyone who offers to pay rent up front. Only time I have had that happen is when someone has really bad credit and they are trying to compensate for it. My thoughts are that they may offer you 6 months rent up front but will you see any rent come the 7th month?

      • justinbc

        Seriously? As a landlord I live for the tenants who pay 6 months to a year up front.

      • I received rent for a in-law suite in 2 6-months installments from a student couple who were using their financial aid to pay the rent. Loved those.
        Now, on the other hand, if a prospective tenant is unwilling to fill a form or let you run a credit check, tells you “give me the keys now and my uncle will come by in a little bit to give you a check for a year’s rent.” I’d run.

    • When I moved here 8 years ago, I was a law student and did not meet the income/asset requirements of a place I applied to (big building, with many units available, so not a competitive bidding situation), so I offered a year of rent up front…they still rejected me. Pretty clear they did not want students, professional or otherwise, but I still thought it was nuts to turn that down.

      • What would they have done if you had trashed the apartment and the damages where higher than your deposit? If you can’t supply a co-signer why would they rent to you?

        • My parents were willing to co-sign (and well-surpassed the income requirements), but they wouldn’t let them.

        • A tenant is financially responsible for destroying an apartment regardless of whether they pay their rent up front or monthly.

  • Had a friend who was a landlord and he was very excited when a prospective renter gave him 6 mo. rent up front, cashiers checks. That’s all he ever got out of him and besides another 6 months’ rent lost as the guy wouldn’t move out, he spent thousands on the eviction process.

    • That is always how it happens. Almost rented to someone who offered that with bad credit. Turned them down and found out later from neighbor who recognized them when they view the place that I had dodged a bullet.

  • If you don’t mind me asking, where was the apartment and how much was it going for?

    I totally agree with anon. 1:43pm, you should call the tenant advocacy office.

    • Florida and Rhode Island 2bdr going for $2200/mo total.

      • So you want to get a lawyer or report to tenant advocacy cause you didn’t get a apartment you thought you should have and your out $55 each. You realize that even if you spend money on lawyer or spend time reporting them that your time and effort are going to be worth more than $55 and it may not be worth your time?

        • No. Let’s get this straight. I was looking for advice, but more importantly, I just wanted to get the word out to people that this kind of shady business is going on so people have information to better protect themselves.

  • This wouldn’t be illegal if you were buying a property, so why is it any different when you’re renting? The owner has the prerogative to accept what the market will bear.

    • I just think these practices are precisely what are driving dc rent prices to unreasonable levels and keeping the poor man down (and kicked out of their city).

      • Ok you don’t qualify as “Poor” if you can rent a 2200/month apartment. That is a mortgage for some people.

        • I wasn’t talking about me. I’m talking about this problem in general, and how it affects poorer people.

    • It’s not illegal because the potential buyers have not already given the seller a sum of money to consider their offer. There’s a huge conflict of interest here in the rental application process.
      If the landlord was negotiating the higher amount BEFORE cashing the check, then that’s totally fine – free market, blah, blah, blah. But the landlord should not be cashing any checks before that. Give everyone a chance to make a higher offer and then go from there.

  • I’ve been out of the rental market for years now but this was quite common in 1999/2000 when there was a serious shortage of rental housing. Before the big building boom.

  • We had a bidding war for my rental. I took the higher rent but didn’t cash any of the other applicant checks, it didn’t seem right since I wouldn’t be running their credit.

  • Last year, my current roommate and I were searching for a townhouse on Capitol Hill. When we showed up at an open house one night, the landlord greeted us at the door and told us that rather than renting the place for $2,200, they were raising the price to $2,600 because they had received so much interest. We still went inside and sure enough, there were at least 10 people submitting applications in the kitchen. Kind of got turned off from the housing search after that and ended up in an apartment building in NoMA that we’re happy with.

    • The only ones playing these silly games are small time landlords. Rent from any of the big leasing companies or property management companies and they will stick to the advertised price. They deal in such volume that it’s not worth their time to pull this crap. Time is money and they want the spot filled.
      Small landlords are also a huge pain in the ass when it comes to excessive damage cost estimates, deposits, meddling in your affairs (“You have friends staying over for the weekend?!?”), timely maintenance, etc. Not worth the hassle, in my experience and horror stories relayed to me by my friends. The people brought to Landlord-Tenant court due to fraudulently withholding deposits are usually always small-time landlords.

      • justinbc

        “Small-time” landlords are often not subject to rent control laws that large buildings would be (assuming they were built prior to 1975). That alone keeps many buildings from being able to change their prices to accept variable rates based on increased demand.

        • That’s totally fine, I have no problems with this. Dynamic pricing is great and small landlords are not covered by rent control, as you said.
          Just don’t put your prospective tenants through an emotionally manipulative and financially draining process when they are trying to rent your place. It’s not cool.

          • If you can’t easily drop $55 for a rental application you definitely should not be committing to a $2200/month rent. If there mere act of applying to rent an apartment leaves you “financially drained” you can’t afford the place.

          • @ JS, I never said $55 broke my bank, it’s the principle of the matter, not the money. But, hey, $55 isn’t nothing either. What a narrow view point to be taking, informing me of my finances. We can afford the rent of this place fine – just think it’s wrong we wasted the time, and yes – money on something that was never a real option for us.

          • K –

            See Anon’s commment above about putting tenants though “financially draining processes.”

            Have you ever tried to rent an apartment in DC? Your situation is really far down the list on the Shady Apartment Dealings scale.

        • As a “small time” landlord I would personally tell you that if someone suddenly raises the price before you even get in the door run the other way. BTW…not all small landlords are slumlords. My places are immaculate and I get someone out to repair with in 24hrs of a call. Don’t throw us all under the bus

  • Jeez, people are paying 6 months to a year in advance for rent? I will literally never have a job where that’s an option..I understand landlords wanting to rent to whoever makes the most/can pay the most, but what are people supposed to do who can only afford $700 – $900 per person a month?

    • justinbc

      “what are people supposed to do who can only afford $700 – $900 per person a month?”
      Live in neighborhoods where that’s the going rate, that’s kind of basic economics. There are several areas still in DC where you can live for that amount, especially if you’re splitting it.

      • Yes I get that, I’m referring to the fact that if people looking for apartments in the 1300-1800 range find one, and those landlords are participating in the “bidding wars” or take someone who can pay 6 months up front vs month by month, changes are the landlord is going to go with the highest bidder/whoever can pay the most. If people who can afford more are essentially “bidding” on cheaper properties, it puts those people at an unfair advantage. I wasn’t saying I’ve ever had too hard of a time finding a place in my range, I’m just worried about the future. More people with money moving in means less places for people with less money to go. Isn’t that what this blog usually ends up being an argument about anyway?

        • justinbc

          There are LOTS of properties priced under 1800 that I can assure you have zero bidding war style competitions associated with them. One of the benefits of being able to afford things is not having to sacrifice or compromise on others. If everyone could afford to live in “the best” neighborhood, it likely wouldn’t be the best for long. Occasionally the government will intervene in the marketplace and dictate that new housing structures must include x number of units below market rate, but that seems to be pretty rare.

  • Sorry this happened to you. Having gone through a similar experience, I know how vulnerable it feels to have provided so much information and money just to learn that you weren’t ever even in contention for the place. There are some seriously inconsiderate landlords out there and unfortunately they have all the leverage in this market. I really hope this doesn’t become a trend.

    And unfortunately, it sounds like it’s perfectly legal. I’m fairly positive that OTA will not get involved before a lease is signed unless it’s a protected-class discrimination issue.

    I think the best way to look at this is: if they were so uncommunicative at this stage, is this really someone you would want to deal with when it comes to maintenance, payment, etc? Maybe you dodged a bullet.

  • bidding wars for apartments have been happening since the mid 2000’s.

  • Yea, I rented in D.C. for seven years and ran into three rental bidding wars during that time – and won one in BLOOMINGDALE in 2011-2012 because the people who overbid had worse credit and a shorter rental history. (Ha, take that!) You can win sometimes if the bidders have worse credit.

    I agree with everyone else though – they shouldn’t have cashed your checks and you need to get that money back. If they are bold enough to tell you that you shouldn’t have applied, they should have given you info so you’d know that. Not everyone knows about rental bidding wars. And just because some of us know about them doesn’t mean we think they are right. (It’s crazy!) I paid $55 once for a shady credit check on North Capitol – gorgeous apartment, but way too much interest and the owners were douchebags once they realized how much demand there was. I’m actually happy we didn’t get picked now.

  • Filing a case in small claims court will get your application fee back — it’s illegal to take a fee and not use it for the stated purpose. There’s also no reason to run credit checks on multiple prospective tenants, especially if your only deciding factor is one tenant offered you more money (which you’d probably know before running a credit check), and a landlord who’s not careful about how they do this can open themselves up to some serious discrimination claims. Something, hint hint, you might want to talk with a lawyer about.

    My guess is the suggestion that you’re going to talk with a lawyer will be enough to save you the attorney’s fee and get your application fee back at the same time.

    And I agree that larger, professional landlords don’t pull this stupid shit on people.

    • Sometime you do need to see all the credit scores and you run them. Especially if you get all the applications around the same time. You look at everyone and scores and make a decision. Who knows if the person offering more money doesn’t have a lousy credit score and you never see more then the first months rent.

    • You don’t need a lawyer to file in small claims court, and there are advocacy and legal aid organizations in DC who give free advice. If the $55 is that important to you, I’d suggest contacting the DC office of fair housing to find out if they think you have a case.

    • Just FYI to help tenants make the right decision on this issue: any “landlord for dummies” book will tell you to do a search to make sure an applicant has never been involved in a lawsuit with a landlord. And there is case law that says that this sort of “discrimination”, against a tenant who has a history of suing landlords, is legal. I am not familiar with small claims court but if you file an action and it comes up in searches in legal databases, you could be damaging your rental prospects in the future. I am not trying to scare you out of bringing a case that needs to be brought (e.g. racial discrimination), but if I were you I would weigh the consequences before acting on the $55. For me, suing over $55 is a bit of a red flag, to be honest. It’s such a trivial amount of money that the applicant/tenant is obviously suing on principle, and a plaintiff that acts purely on principle is the most frightening type of plaintiff! Just food for thought.

  • Most small time landlords are smart enough to realize that you take the best applicant (best credit score, work, rental history, references) over getting another $100-$200 per month in rent. Only greedy people take the most money, or pre-payment over a more qualified tenant. $100 a month isn’t worth a potentially bad tenant, going through the eviction process, cleaning up a bad tenant’s mess, etc. Us small timers aren’t equipped for such extra costs (which can be plural months rent down the road).

  • If the checks haven’t been cashed put a stop payment order on them both. I’ve done that with apt management companies before. I agreed with the agent in advance that I’d call him to run my credit check later that day if I decided I wanted the place. I didn’t want it, but they tried to cash the check & sent me a claim! I was like, you crazy!

    • Would if I could. They were too smart and took a money order not a check.

      • It honestly sounds like a scam. I’d call the agent and tell her that you’ll be filing a notice with the OTA and small claims court. My guess is that she might be a useful idiot for these folks.
        This happened to a friend in NYC – scammers used a legitimate agent to show an apartment and asked multiple individuals for application fees and deposits. The only issue was that the scammers didn’t actually own the apartment; they had made keys for an empty apartment in a rent controlled building. My friend lost $900 and it was a Fox 5 news story.

      • justinbc

        Money order only? I’ve never heard of or seen this. That would actually be a red flag more than anything else you’ve mentioned thus far.

        • +1. I ask for the security deposit and first month’s rent to be in the form of a cashier’s check, but that is after the lease is signed and they get the key as soon as I get the check. A personal check for an application fee is perfectly acceptable and I would never ask for any other type of payment. Also I wouldn’t cash someone’s application check unless they were the front runners for the apartment…

  • the post 9.11 rental market in dc was like this too.
    the fierce rental market was what actually got me to buy a house.

  • I don’t understand where the outrage is coming from here. Unless there is actual fraud in collecting the fee (i.e., there was no apartment actually for rent or misrepresentations made about the use of the fee), there is no legal issue here. The competition is annoying for prospective renters, sure, but how do you expect this process to work in a free market? A landlord receives multiple parties that want to rent an apartment, they can choose however the hell they want (outside of discriminating against certain categories). The rational person will choose based on financial interest (best offer and/or most creditworthy). What do you think this landlord owes you? If you were renting out a unit, how would you process multiple competing applications? Go back and forth for days/weeks creating an auction? Landlords are under no obligation to spend their own time auctioning off their property…if they want it done quick, they have every right to select the best offer and be done with it.

    • I think the point is that they cashed the application fee checks without ever seriously considering the OP for the apartment- not that they accepted an offer for more money. Yes it’s trivial in the grand scheme of things, but as a landlord I agree with the OP’s stance. It’s shady to collect application money and then keep it even if you never process the application for the prospective tenants. I’d wait to cash the check till after the application is processed.

  • This raises an interesting question – I’m not a landlord, but thinking about it. I was assuming that, if I had multiple rental applications, I’d eyeball them, pick the top 5, and run the credit checks (and accordingly, cash the checks), then pick one from there. Not talking about cashing the check and not running a credit check, but running multiple credit checks. But it seems like the consensus from experienced landlords is to run one credit check at a time. Do you feel like that gives you enough information to make an informed decision?

    • justinbc

      If we have multiple applicants at the same time we’ll run them as they come in. We usually take a few days to decide who gets a particular unit, there’s rarely a rush to simply take the first offer who comes along. If there’s a lot of competition for an open unit we’ll always let prospective tenants know that, so they don’t unnecessarily get their hopes up.

  • I believe that legally, you are required to rent the apartment to the first applicant who fits the requirements and gives you a security deposit/signs lease, unless someone offers more money to you. I don’t know if there are specifics for how the bidding war should play out – i.e., do you have to inform the first applicant before accepting another offer, giving them a chance to counter. Choosing who you happen to like best from several equally qualified applicants is not legal, as far as my understanding goes from consulting with a lawyer/landlord friend of mine. I do know someone who has had a bidding war on his apartment, which he claimed was because it offered a parking space in an area with tight street parking.

    • There is no legal requirement to rent to the first acceptable applicant. However you open yourself up to fair housing (discrimination) claims if you choose someone “you’re most comfortable with” or someone who is “the best fit”. For this reason some landlords decide on a particular method for selecting between equally qualified tenants and stick to it. For example they go with the first qualified applicant, or draw names out of a hat. That way if they are ever sued they can explain in court that they always use the same arbitrary method and do not do it based on “comfort/fit”. I am a “small time” landlord and I find that actually this stuff is not as easy as you would think. For example the person with the highest salary and best credit is not always the most attractive candidate if they come across as very high maintenance/litigious. Provided that another candidate has salary and credit that are good enough, that second candidate may be a better choice. But if your applicant pool has some diversity (different races, genders, ages) then you always have to be careful with fair housing laws when making your selection, which is again why some landlords use an arbitrary method. It’s more defensible in court.

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