Final answer:
An application deposit is often used to cover the costs of processing a rental application. If an application is rejected, whether the deposit is refundable or not depends on the landlord's policies and local rental laws. Applicants should review agreement terms and rental laws to understand their rights.
Step-by-step explanation:
When a tenant submits an application along with an application deposit for a rental property, that deposit is typically to cover the costs of processing the application, such as background checks and credit reports. If the application is rejected, the handling of the application deposit can vary depending on the landlord's policies and state laws. In some cases, the deposit may be fully refundable if the applicant is not approved for the rental. However, portions of the deposit may also be non-refundable to cover those application processing expenses. It is crucial for applicants to review the rental agreement terms and local rental laws to understand their rights regarding application deposit refunds.