California’s AB 2493: New Rules for Rental Application Fees Starting 2025

Beginning January 2025, California landlords must comply with new regulations under AB 2493, which updates California Civil Code §1950.6. These changes affect how and when landlords can charge application fees, process rental applications, and issue refunds. The new law is designed to protect tenants from unnecessary screening costs while ensuring landlords can still recover legitimate expenses.

Key Changes Under AB 2493

Landlords have long been able to charge a screening fee—currently capped at just over $62 per applicant—to cover costs like background checks and credit reports. While this cap remains, AB 2493 introduces two legal pathways for charging these fees.

Option 1: Structured First-Come, First-Served Screening

This method requires a highly structured and transparent process:

• Applications must be reviewed in the order received.

• Written screening criteria must be provided upfront (credit score minimums, income requirements, eviction history, etc.).

• The first applicant meeting the published standards must be offered the lease.

• Fees can only be collected when actively reviewing an application, not to hold a spot in line.

• Duplicate fees must be refunded within 7 days if applications aren’t reviewed, unless applicants agree to apply the fee elsewhere.
  

This process minimizes bias and supports fair housing compliance but limits flexibility in selecting tenants.

Option 2: Flexible Review with Mandatory Refunds

Landlords can review applications in any order and select the most qualified tenant. However, they must:

• Refund 100% of the screening fee to applicants not selected.

• Issue refunds within 7 days of selecting a tenant or 30 days of receiving the application, whichever comes first.
  

This option allows more discretion but requires careful tracking of refunds and decision timelines.

Additional Requirements

• No fees without availability: Charging a screening fee when no rental unit is available is illegal unless the applicant signs a written acknowledgment.

• Automatic credit report copies: Landlords must send applicants a copy of any credit report used in screening within 7 days.

• Reusable reports allowed: If an applicant provides a valid reusable screening report (e.g., from RentSpree), no screening fee can be charged.
  

Compliance Checklist for Landlords

• Select a screening method (structured or flexible).

• Update rental applications to include written criteria.

• Train staff on new fee collection and refund rules.

• Track credit report usage and delivery to applicants.

• Keep thorough documentation of all communications and decisions.
  

Failing to comply with AB 2493 could result in disputes, financial penalties, or fair housing violations. By understanding and following these new rules, landlords can continue effective tenant screening while staying within the law. Source:

• AB 2493: Application Screening Fees in California