co-op - ew

We are going into contract on a co-op :) The owners said that they never had to pay an application fee.

Our RE agent faxed over the app today and there is a FOUR HUNDRED DOLLAR application fee!

I feel sort of turned off by this... anyone else in a co-op have a similar situation? Can we do anything about it? I mean, if we're approved I feel like they should give it back to us.... or is this standard practice?