A new California law limiting tenant screening fees and improving fairness in the application process went into effect on January 1, 2025. AB 2493 aims to alleviate the financial burden on renters by curbing excessive application fees, which could previously total hundreds of dollars during their home search. Additionally, the law seeks to reduce discrimination and enhance transparency throughout the rental application process.

The new law allows two methods for tenant screening:

Method 1: Written Screening Criteria

• Landlords or agents provide written screening criteria to every applicant with the application.
• Criteria may include factors like credit score, income, employment verification, prior evictions, criminal history, smoking, and pet policies.
• Completed applications are screened in the order received, and the first qualified applicant is approved.
• A screening fee cannot be charged for applications in line after the approved applicant’s.
• Screening fees for denied applications that did not meet the screening criteria do not have to be refunded.

Method 2: Refunded Screening Fees

• In this method, written screening criteria does not have to be provided to applicants.
• A screening fee is collected upfront and refunded to applicants not selected.
• Refunds must be issued within 7 days after another tenant is selected, or within 30 days of the fee payment, whichever comes first.

In the past, a landlord or agent could accept as many applicants as they wanted, charging a screening fee for every one. They could continue to accept applications until they found what they considered their ideal tenant. This could lead to discrimination against qualified tenants who the landlord didn’t deem fit for an unstated reason. The applicants were left footing the bill for the additional applications. This law is especially impactful for renters like my daughter and niece, who faced significant financial strain when applying for their first apartment. As their co-signer, I saw firsthand the financial burden caused by multiple application fees.

Other Legal Updates from AB 2493

• Restrictions on screening fees: Landlords or agents may only collect screening fees if a unit is currently available or will be available soon. Previous law allowed this requirement to be waived if the applicant agreed in writing.
• Itemized receipts required: Landlords or their agents must provide a screening fee receipt to each applicant, which itemizes the out-of-pocket expenses (for example, a credit report fee), and the time spent by the landlord or agent. The landlord or agent must refund any portion of the screening fee that was not spent and itemized.
• Copy of credit report provided: If the landlord or agent obtains an applicant’s credit report as part of their screening process, they are required to provide a copy to the applicant within 7 days after receiving the report. Previous law required that they provide it only if the applicant requested a copy.

Tenants should expect that most landlords require that every tenant over age 18 submit an application and pay a screening fee. The current maximum amount that can be charged for tenant screening is $62.02 per tenant, which is adjusted annually for inflation.

These legal updates should save tenants money and reduce housing discrimination, and may speed up the process of tenant selection since the landlords will be less likely to wait until they have a pool of tenants to select from. For the full text of AB 2493, click here. If you believe you've faced discrimination or have been charged screening fees illegally, contact your city’s housing department, a local tenant rights organization, or a legal aid foundation.

Navigating the rental process can feel overwhelming. If you have any questions or need help finding your next home, feel free to reach out. I'm here to support you every step of the way.