California Screening Fees: What Every Landlord Needs to Know Right Now

If you've been renting out property in California for any length of time, you've probably charged a screening fee at some point. It seems straightforward — someone applies, you pull a credit report, they cover the cost. But as of January 1, 2025, the rules around screening fees changed significantly, and a lot of landlords are still running their process the old way without realizing it.

Here's a plain-English breakdown of where things stand, what you're required to do, and where the landmines are.

The Two Policies — Pick One

Under current California law, if you want to charge a screening fee, you must follow one of two specific approaches. You don't get to invent your own system.

Option 1: First Qualified, First Approved

This is the approach the California Apartment Association recommends, and it's the one most property managers prefer. The way it works: you share your written screening criteria with every applicant upfront, you review completed applications in the order you receive them, and you only charge the fee if you actually review the application. The first person who meets your criteria gets the unit — full stop.

The upside here is that if you deny someone because they don't meet your criteria, you're not on the hook to refund their fee. The key is that your criteria have to be written, clear, and applied consistently.

Option 2: Refund Everyone Who Doesn't Get Approved

The second option is simpler in concept but more expensive to administer: you collect fees from applicants, pick your tenant, and then refund the screening fee to everyone else within 7 days — regardless of the reason they weren't approved. Under this approach, the only fee you keep is from the applicant you actually place.

Most experienced property managers steer away from this option. The logistics of tracking and issuing refunds quickly adds up, and the financial exposure is higher if you're running a busy property.

You Also Have to Hand Over the Credit Report

One piece of the 2025 update that catches landlords off guard: if you collect a screening fee and pull a credit report, you are required to send that report to the applicant within 7 days of receiving it — even if they never ask for it. Personal delivery, mail, or email all work, but you have to do it.

This isn't optional, and it's separate from any other disclosure rights the applicant might have under other laws. California has several overlapping statutes on this, and compliance with one doesn't necessarily mean you've satisfied the others.

The Fee Cap

The original screening fee cap when this law was first written was $30 per applicant. That number gets adjusted annually in line with the Consumer Price Index, and as of December 2025, the adjusted maximum is $65.86.

A few things worth knowing about the fee itself:

• The fee can only reflect your actual costs — what you paid for the screening service, plus a reasonable value for your own time gathering the information. You can't charge a flat fee that happens to be under the cap if it doesn't reflect your real costs.

• You must give the applicant a receipt that itemizes those costs. The receipt needs to break out what you spent and how much time you put in. It has to be delivered in person or by mail unless the applicant agrees to receive it by email.

• You also can't charge a fee at all if you know — or reasonably should know — that no unit is going to be available in a reasonable timeframe, unless the applicant has agreed to that in writing.

The Reusable Credit Report Wrinkle

Since 2023, applicants have been able to purchase a portable credit report and submit it to multiple landlords within a 30-day window. You are not required to accept these reports. But if you do choose to accept one, you give up your right to charge any screening fee at all — including reimbursement for your time. It's an all-or-nothing trade-off, so think it through before you decide to offer that as an option.

Why This Matters More Than It Might Seem

The compliance exposure here is real. Landlords who charge screening fees without following one of the two permissible policies, who don't provide credit reports on time, or who issue improper receipts are creating legal risk that can follow them well past the tenancy.

And beyond the legal side, your application process is often the first real interaction a prospective tenant has with how you operate. A process that's clear, professional, and consistent tells applicants — and tells any regulator who might look at your records later — that you take your obligations seriously.

If managing these requirements yourself is starting to feel like a part-time job, that's because it is. Between staying current on state law, maintaining written screening criteria that hold up to scrutiny, and administering the application process correctly for every unit, the compliance burden on self-managing landlords has grown considerably.

That's exactly the kind of detail a good property manager handles so you don't have to.

The current maximum tenant screening fee ($65.86) reflects CPI adjustments through 2025. This figure is updated annually, typically in February, based on figures published by California's Department of Industrial Relations.

This post is for informational purposes only and does not constitute legal advice. Laws change, and every situation is different — consult a qualified attorney for guidance specific to your property and circumstances.