Montana Cracks Down on Rental Payment Fees with New 2025 Law

Landlords Can No Longer Charge Convenience Fees for Electronic Rent Payments

Montana tenants just got relief from a common frustration: extra fees for paying rent online or by credit card. The state's 69th Legislature passed House Bill 810 in 2025, immediately prohibiting landlords from charging additional fees based on how tenants choose to pay their rent.

The new law represents a significant shift in Montana's rental market, where many property owners had been collecting substantial revenue through convenience fees, processing charges, and payment premiums that could add $25 to $50 or more to monthly rent payments.

The Problem: Payment Fee Proliferation

For years, Montana renters faced a frustrating choice: pay rent the "free" way using checks or money orders, or pay extra fees for the convenience of electronic payments. Many landlords charged these fees regardless of their actual processing costs, treating them as an additional revenue stream rather than cost recovery.

"It became a way for landlords to essentially increase rent without calling it a rent increase," said housing advocates who supported the legislation. The practice particularly burdened younger tenants and those without traditional banking relationships who relied on electronic payment methods.

What the New Law Changes

Under HB 810, landlords must now accept multiple forms of rent payment without discriminatory pricing. The law specifically prohibits additional fees based on payment type, with one important exception: landlords can still charge fees to recoup actual electronic bank fees they incur for processing payments.

This means if a landlord pays a $3 credit card processing fee to their payment processor, they can pass that exact cost to the tenant. However, they cannot charge a $25 "convenience fee" on top of a $3 processing cost.

The legislation amends four sections of Montana Code, covering both traditional residential rentals and mobile home parks, ensuring comprehensive coverage across the state's rental market.

Immediate Implementation

Unlike many bills that take effect months after passage, HB 810 includes an "immediate effective date" provision. This suggests lawmakers viewed the issue as urgent enough to warrant swift action, likely responding to widespread tenant complaints about excessive payment fees.

Industry Reactions and Concerns

Property management companies and landlord associations have expressed mixed reactions to the new requirements. While some acknowledge the fairness principle, others worry about administrative burdens and lost revenue.

"We'll need to carefully track our actual processing costs and adjust our fee structures accordingly," said one property management company representative. "It adds complexity to our billing systems."

Some industry observers predict landlords may respond by raising base rent to offset lost fee revenue, though this would require following existing rent increase procedures and notice requirements.

What Tenants Should Know

Montana renters should understand their new rights under the law:

• Payment flexibility: Landlords cannot charge extra for your preferred payment method

• Limited fees: Only actual bank processing fees can be passed through to tenants

• Documentation: Landlords charging processing fees should be able to justify the actual costs

• Immediate protection: The law is already in effect

Tenants who believe their landlords are violating the new requirements should document the fees and consider seeking legal advice or contacting local housing authorities.

Broader Implications

Montana's action reflects a growing national trend toward rental payment reform. Several states have considered similar legislation as electronic payments become increasingly common and necessary, particularly as banking services evolve and younger generations rely more heavily on digital transactions.

The law also signals Montana's commitment to rental affordability at a time when housing costs continue to challenge residents across the state. By eliminating what many viewed as hidden fees, lawmakers aim to provide more transparency and fairness in the rental market.

Looking Forward

As the law takes effect, both landlords and tenants will need time to adjust to the new requirements. Property managers must review their payment processing systems and fee structures, while tenants can expect more straightforward rental payment options.

The success of Montana's approach may influence other states grappling with similar issues, potentially creating a broader shift toward rental payment transparency across the region.

For Montana's rental market, HB 810 represents a clear statement that convenience in paying rent shouldn't come with unreasonable costs, ensuring that electronic payment options remain accessible to all tenants regardless of their preferred payment method.