Disclaimer: This document and any information contained herein are provided for informational purposes only and do not constitute legal advice. The author of this document is not an attorney, and the information presented should not be considered as a substitute for professional legal advice.
On January 1st, 2025, a cavalcade of new laws for property owners and tenants in the state of California was enacted. Each new law has instilled confusion as landlords have scrambled to learn all these changes.
One law, in particular, has the potential to impact your rental business the most.
AB 2493 is a law that will drastically change how a landlord or their agent can approach the application screening process for residential rental properties. This new law not only adds lengthy requirements for application screening fees, but it also gives every landlord in California one of two strict options for handling incoming rental applications.
Read on to learn more about these screening options and how you must change your practices now.
What AB 2493 Will Change
AB 2493 specifically seeks to address concerns over tenants paying multiple application screening fees when applying for rental properties. To attempt to alleviate this, the bill is imposing very specific ways for landlords or their agents to handle incoming applications moving forward.
As of January 1st, 2025, landlords in California will have two options for how they can process applications for tenancy:
A. Strict Processing Guidelines for Tenant Screening Services
The first of which states that you must process applications in the order you receive them. This means that when you receive an application, you must process it first before assessing other applicants.
You cannot skip or prioritize applicants, screening must be done on a first-come, first-served basis. The first applicant to meet the landlord's screening criteria must be automatically approved for tenancy.
In addition, the landlord's established screening criteria must be documented to ensure fairness. Applicants to the rental unit must be provided a written copy of the rental criteria alongside the application form.
B. Refundable Application Screening Fees
The second option for tenant screening would not require you to change your processes. Instead, it would require you to make all application fees refundable to applicants that are not selected.
This includes application screening fees charged to tenants who fail to meet your criteria or withdraw their applications by choice.
There are deadlines for refunding an application fee to make sure applicants get their money back within a reasonable period. The two timelines for this are:
Unselected applicants must be refunded the entire screening fee within 7 days of your selected tenant being notified.
ORWithin 30 days of when their application was submitted.
The deadline for refunding the application fee is whichever of these dates comes first. Documenting these refunds via receipts is highly recommended in case of audits or legal complaints.
Both of these options come with unique challenges. The "right choice" depends on the landlord, their property manager, and their established business practices. Take the time to understand the ramifications of both to decide which is right for you.
Providing Consumer Credit Reports
Regardless of which option you choose, AB 2493 provides additional guidelines that will affect all landlords who charge screening fees in California.
California law has taken a particular interest in assisting the public in understanding and improving their credit scores. This year, we saw another rental law, AB 2747, which requires landlords to offer existing tenants the option to have their rent payments reported to consumer credit reporting agencies.
AB 2493 will expand your credit reporting duties to applicants for tenancy as well.
Any applicant who pays a screening fee must receive a copy of their consumer credit report via personal delivery, mail, or email within 7 days of the landlord or their agent receiving said report.
Additional Guidelines for Application Screening Fees
A few additional requirements to keep in mind:
The landlord or property manager must provide applicants with a receipt for any screening fee paid. This receipt must itemize the out-of-pocket expenses and time spent for the screening process. Similar to the credit reports, this receipt must be delivered personally or by mail. Email is also an option, but only if the applicant agrees to it.
If the landlord or leasing agent does not perform a personal reference check or use a consumer credit reporting service during the screening process, they must return any portion of the fee not used for other authorized purposes such as criminal background checks.
AB 2493 is also very specific in mentioning that this law does not prevent an applicant from using a reusable tenant screening report. The law also does not preempt any rules regarding deposits to fees with state housing assistance programs.
How California Landlords Can Adapt
Landlords shouldn't drag their feet on screening practices. Failing to adapt to one of the two legal options for screening applicants can result in serious fines and legal action.
California law has made tenant screening and landlording as a whole exponentially more complex in the last few years. Now more than ever before, you need a dedicated, local professional to help you manage both tenant placement and your rental business as whole.
If you don't have one already or are less than satisfied with your property management company, you should strongly consider seeking better help to manage your California rental unit. The right property manager can help you not just with adapting to new tenant screening regulations, but to the entire California legal landscape.
To get answers to some of the most common legal questions for landlords in California, visit our Legal FAQs page today.
If you're seeking a property manager that can keep your property running smoothly and your income flowing in Pleasanton, CA and the surrounding areas, reach out to Advantage Property Management Services today.
Contact us for a free consultation.
Additional Resources:
A Guide for Landlords on California’s New Rental Laws in 2025
A Legal Guide To Just Cause Evictions For California Landlords
