This article is for general information only. It isn’t legal advice, and it shouldn’t be relied on as a substitute for it. Philadelphia’s rental rules change over time, laws get amended, and court interpretations shift, and every property’s situation is different, so nothing here should be treated as a final answer for your specific circumstances. Confirm your specific requirements with the City of Philadelphia or a landlord-tenant attorney before making any compliance decisions or relying on this information.
Philadelphia’s security deposit law has been in effect since December 2025, and if you own rental property here, it’s already reshaped how you collect a deposit and what you can charge a prospective tenant to apply. Nearly every annual lease in the city has cycled through at least one renewal since then, so if you haven’t updated your process, there’s a good chance you’re out of compliance right now, not just at risk of it later. This guide breaks down exactly what each rule requires, who it applies to, and how to stay compliant.
Table of Contents
What Changed: Two New Ordinances
Philadelphia City Council passed two companion bills in 2025, together known as the Move-In Affordability Plan, sponsored by Councilmember Rue Landau. Both were signed by the Mayor on September 3, 2025. You can read the original certified bill text if you want the source document, but both are now folded into the permanent Philadelphia Code, which is what we cite throughout this guide since code citations don’t rot the way links to old legislation PDFs do.
The two rules attach differently, and it’s worth being precise about it:
- The security deposit installment rule, codified at Philadelphia Code § 9-804(4), applies to any residential lease executed or renewed after the ordinance was adopted on September 3, 2025, and has been enforceable since December 2, 2025.
- The application fee cap, codified at Philadelphia Code § 9-814, isn’t tied to leases at all. It governs every application you take on or after December 2, 2025, no matter when your existing leases were signed.
The Security Deposit Installment Rule
Pennsylvania state law already sets a ceiling on security deposits: up to two months’ rent in the first year of a lease, and no more than one month’s rent after that. The same state law also bars increasing a deposit at all once a tenant has stayed five years, even if the rent goes up, and requires deposits over $100 held for more than two years to sit in an interest-bearing escrow account. Philadelphia’s ordinance doesn’t touch any of that. What it changes is how a tenant is allowed to pay it.
If you collect a security deposit of one month’s rent or less, nothing changes. You can still collect it as a lump sum before move-in.
If your security deposit is more than one month’s rent, you’re required to give the tenant a choice:
- Pay the full deposit upfront, or
- Pay one month’s rent upfront, then split the remaining balance into three equal monthly installments after move-in
The tenant picks. You can’t require the lump sum if they’d rather use the installment option. The total amount you collect doesn’t change either way, the code is explicit that this only changes the timing of the deposit, not its size.
The Application Fee Cap
Philadelphia Code § 9-814 doesn’t just cap one number, it bars nearly every fee you might currently be charging a prospective tenant. The rule states a landlord may not demand or accept any payment, fee, or charge from a prospective tenant other than a fee to conduct a background and/or credit check. That’s a blanket prohibition, not a narrow one.
In practice, that means fees a lot of landlords still collect without thinking twice are now off the table: holding deposits to reserve a unit before a lease is signed, general processing or admin fees, and applicant-paid finder or broker fees. If it isn’t the one capped background/credit check fee, you can’t charge it to a prospective tenant, period.
The background/credit check fee itself is capped at $50 or the actual cost of the check, whichever is lower, and you can’t charge a fee for a check you didn’t actually run.
A few other pieces worth knowing:
- If you’re the property owner, you can’t charge the same prospective tenant more than one background or credit check fee in any 12-month period, across any of the properties you own. If you’re managing a property on behalf of someone else rather than owning it, that same one-fee-per-12-months limit applies specifically to that property, it doesn’t automatically stretch across every property you manage for different owners.
- The law doesn’t require you to accept a tenant’s third-party report. A provision that would have let applicants supply their own background check from an accredited agency within the last 30 days was in the original introduced version of the bill, and was dropped before it passed, along with the original proposal to cap fees at $20, which was raised to the current $50 before passage.
What You Owe Every Applicant
Beyond what you’re allowed to charge, the law also sets rules for how you run the check itself:
- You’re prohibited from running a “hard pull” credit check, one that impacts the applicant’s credit score. Only a soft pull is allowed. If your screening vendor defaults to a hard inquiry, that’s a configuration setting worth checking now, it’s exactly the kind of thing a landlord can violate silently for months without realizing it.
- You must give the applicant a copy of any background or credit report you run on them.
- Your screening process has to comply with the federal Fair Credit Reporting Act, including giving a rejected applicant an adverse action notice when the report factors into your decision.
Who These Rules Apply To
This is where the two rules split, and it matters:
- The security deposit installment rule applies only where the landlord or the person operating or managing the units controls three or more units. If that total is two or fewer, you’re exempt from offering the installment option, a concession that was added after pushback from smaller landlords during the legislative process. Ownership interests are aggregated across every legal entity a person or group controls, so splitting properties across multiple LLCs doesn’t get you under the threshold.
- The application fee cap applies regardless of how many units you own. It does not carry the same unit-count exemption as the deposit rule. A landlord with a single rental is capped at $50 just like a landlord with fifty.
What Happens If You Don’t Comply
Violating either rule is designated an Unfair Rental Practice under Philadelphia Code § 9-804, which means a tenant can file a complaint with the Fair Housing Commission or raise it in a landlord-tenant court proceeding.
The specific remedy differs by rule. For security deposit violations, a tenant can recover actual damages, or elect statutory damages equal to one month’s rent instead, plus reasonable attorney’s fees and costs. That one-month figure is specific to deposit violations, it isn’t a general penalty across both ordinances.
For violations of the tenant screening rules (the soft-pull requirement, providing a copy of the report, adverse action notices), a separate section of the code, § 9-810, makes a violation a Class III offense and lets a tenant recover actual damages, punitive damages up to $2,000 per violation, and attorney’s fees. That’s a different statute with a different remedy, but it belongs in the same risk picture since it covers the same application process.
What is clear: nearly every annual lease in the city has now cycled through at least one renewal since these rules took effect, so this isn’t a future compliance question for most landlords, it’s a current one. If you’re still collecting a full deposit upfront from a tenant in a 3+ unit building, charging more than $50 to apply, or running hard-pull credit checks, it’s worth reviewing your leasing process now rather than after a tenant or the Fair Housing Commission flags it.
What’s Next
Two more pieces of the city’s tenant-protection push are worth knowing about. City Council passed the Safe Healthy Homes Act 16-1 in April 2026, after a landlord-led lawsuit briefly delayed the final vote, adding rental license disclosure requirements, proactive inspections, and expanded good cause protections. A landlord association has continued to challenge parts of the city’s tenant-protection push in federal court, though the case hasn’t stopped these laws from taking effect.
Separately, City Council pushed to roughly triple staffing at the Fair Housing Commission this year to keep pace with a caseload expected to top 700 cases in the coming fiscal year, driven partly by these new rules. In the end, only a deputy director position made it into the city budget, along with an increase to the stipend paid to hearing officers. The commission is better resourced than it was, just not as much as Council initially proposed, but the direction is clear: the agency that hears deposit and application fee complaints is under real pressure to move faster, not slower.
FAQ
Is Philadelphia’s security deposit law still new?
Not really anymore. It’s been in effect since December 2, 2025, and nearly every annual lease in the city has cycled through at least one renewal since then. If you haven’t updated your process, you’re likely out of compliance now, not just at risk of falling out of compliance later.
Does the security deposit installment rule apply to me if I only own one rental property?
No. The installment requirement only applies to landlords or property managers who control three or more units. If you own one or two units, you’re exempt from offering the installment option, though the underlying Pennsylvania deposit cap (two months in year one, one month after) still applies to you.
Can I charge a holding fee or deposit to hold a unit for an applicant?
No. Philadelphia Code § 9-814 bars any payment, fee, or charge from a prospective tenant other than the capped background/credit check fee. That includes holding deposits, general admin fees, and applicant-paid finder fees.
How much can I charge for a rental application in Philadelphia now?
No more than $50, or the actual cost of the background and credit check, whichever is lower, and that’s the only fee you’re allowed to charge an applicant at all. As the property owner, you can’t charge the same applicant more than one such fee within 12 months across any of your properties. If you’re managing on behalf of an owner, that limit applies to the specific property rather than across every property you manage.
Can a tenant use their own recent background check instead of paying my application fee?
No. The final law doesn’t require you to accept one. A provision that would have let applicants supply their own report from an accredited agency within 30 days was in the original introduced bill and was dropped before it passed, along with the original $20 fee cap, which was raised to $50.
Does the law apply when I renew an existing lease?
Yes, for both rules, though differently. The deposit installment rule applies to any lease executed or renewed after the ordinance was adopted. The application fee cap isn’t tied to lease timing at all, it governs every application you take from December 2, 2025 forward, regardless of your leases’ renewal dates.
Does this change how much security deposit I can collect overall?
No. The Philadelphia ordinance changes how the deposit can be paid, not the maximum amount. Pennsylvania’s existing statewide cap of two months’ rent in year one and one month’s rent after still applies, along with the state’s rules against increasing a deposit after five years and requiring escrow with interest on deposits held more than two years.
Where HubKey Fits In
With the Fair Housing Commission’s caseload climbing and enforcement only getting more active, staying compliant with Philadelphia’s rental rules is a moving target. This is one more piece to track alongside your rental license and certificate of rental suitability. HubKey offers three ways to get support with it.
Our rental license and compliance service keeps your paperwork current.
Our tenant placement service handles applications and screening the right way from the start.
Our full-service property management covers all of it, deposits, applications, licensing, and renewals, so you’re not the one keeping track.
If you’d like to see which one fits your situation, visit our services page to compare what’s included. If you’d rather talk through your situation first, just get in touch and we’ll help you figure out what you need.
Mike Goldstein is the CEO and Broker of Record at HubKey Real Estate. He bought his first Philadelphia rental property in 2008 and has been managing and acquiring properties across the city ever since. He founded HubKey in 2022 to bring transparency to Philadelphia property management. His focus is helping everyday people build wealth through real estate.
