A Lane County judge has tossed out Eugene’s new limit on rental application screening fees.
The Eugene City Council voted last summer to put a $10 cap on the amount that property owners could charge prospective renters for a background check.
It was part of a larger package of "renter protections" approved by the council at the time.
Supporters included the Springfield Eugene Tenant Association, whose director, Tim Morris, testified in favor of the cap on the screening fee.
He said that families consistently say they pay “hundreds of dollars in screening fees just to be told ‘no’ at the front door,” according to the Register-Guard.
Landlords objected. They said the cost of those screenings were often four or five times more than Eugene's $10 cap. A group of companies that run multi-unit complexes in Eugene sued to block the limit.
Lane County Circuit Court Judge Erin Fennerty ruled in favor of the plaintiffs. She said state law allows landlords to charge for the actual cost of the background checks, and that supersedes the city ordinance.
"Operation of the Ordinance ultimately defeats the purpose of applicant screening charge, as a landlord cannot recoup its average actual costs as provided for by (state law) while complying with the Ordinance's cap on recouping actual costs above $10," Fennerty wrote in her opinion.
A spokesperson for the property owners who filed the lawsuit did not respond to KLCC's request for an interview, but the group issued a written statement.
“We were confident from the outset that this policy was unlawful,” said Multifamily NW Deputy Executive Director Gary Fisher. “Despite sharing our perspectives and experience with the city council, the policy passed last year. While a legal challenge is always a last resort, we are pleased that Judge Fennerty upheld the law.”
A spokesperson for the City of Eugene said the city is reviewing the court’s decision.
