As landlords and property owners in California, staying updated on new laws is key to running a smooth operation. If you’re managing rental properties in Tracy, CA, you’re probably aware that the rules around application screening fees have recently changed with AB 2493. If you don’t fully understand these changes, you could be setting yourself up for mistakes that could cost you time, money, or even legal trouble.
AB 2493 isn’t just another piece of legislation—it's a shift in managing application screening fees. Landlords and property managers now have clearer guidelines on when they can charge fees. These changes are meant to create a fairer and more transparent process for everyone involved, but they also mean you’ll need to adjust your approach to stay compliant.
Let’s check the key changes brought by AB 2493, how they affect your everyday operations, and the practical steps to ensure you're doing everything by the book.
What is California AB 2493, and How Has it Changed Application Screening Fees?
AB 2493 is the application screening process for new laws for rental properties in California. It's designed to make things clearer and fairer for both landlords and tenants. Understanding this law can help you avoid costly mistakes if you manage residential rental properties in Tracy.
1. The Two Major Changes with California AB 2493
Apart from the acceptance of a reusable tenant screening report, California AB 2493 also introduces two key changes that significantly impact how landlords handle application screening fees and tenant screening processes.
No Fees If No Units Are Available
Previously, landlords could charge application fees regardless of unit availability. Under the new law, you can’t charge a fee unless you know there’s a rental unit available—or one that will be available soon. In other words, you can’t collect fees for units you’re not sure will be available soon.
Refunding Fees to Unsuccessful Applicants
If you charge an application fee and don’t select the applicant, you must refund the fee. The law requires you to refund the unused portion of the payment within 7 days after choosing a tenant or within 30 days, whichever is sooner. This applies even if the applicant was not selected for reasons unrelated to their application.
2. What Does This Mean for Application Fees?
California AB 2493 brings significant changes directly affecting how application fees are charged, refunded and managed throughout the tenant screening process.
- Transparency in Screening: Landlords must clearly communicate their screening criteria. This means you need to give applicants a clear understanding of what you’re looking for from the get-go. Share your criteria along with the application form to avoid misunderstandings.
- Fee Refund Requirement: Any unused portion of the application fee must be returned to the applicant. This helps reduce confusion and builds trust with applicants.
3. The New Screening Fee Refund System
With AB 2493, there’s a new way to handle refunds:
- When to Refund: If you charge a fee and don’t move forward with the application (for example, if you rented to someone else), you must refund the unused portion. This includes situations where the tenant withdraws the application.
- Itemized Receipts: You must now provide an itemized receipt for any application fee. This means detailing exactly how much you charged, why you charged it, and the refund amount, if applicable. This extra transparency helps avoid confusion.
4. Changes to the Application Screening Process
AB 2493 also impacts how you use credit reports:
- Sharing Credit Reports: Under the new law, you must give applicants a copy of their credit report within 7 days of receiving it. Also, you must provide the report within 3 days if the applicant requests it. This ensures tenants are fully aware of how their credit affects their application.
- Screening Criteria: Saying you're looking for a tenant with positive rental payment information is insufficient. You also need to share your screening criteria with applicants before they apply. Being upfront about your standards helps avoid misunderstandings and potential legal issues.
AB 2493 Legal Compliance and Best Practices for California Landlords
To keep everything above board, here’s what you need to do:
- Make Sure Units Are Available: Don’t charge an application fee unless you know there’s a unit available or one coming up soon.
- Be Transparent: Share your screening criteria with every applicant upfront, along with the application form. This makes things clear from the start.
- Track Fees and Refunds: Keep detailed records of all fees collected and refunded. If you don’t select a tenant, refund the unused portion within the required time.
Best Practices for Application Screening
Use a reliable screening service. Partner with a trusted nationwide consumer reporting agency to ensure you’re getting accurate information when reviewing credit reports. It’s also great to work with property management companies to keep good records and document everything, such as applications, fees, refunds, and reports. This can save you in the event of a legal dispute.
Adapt Your Screening Process to AB 2493's Requirements with Experts’ Help!
AB 2493 aims to make tenant screening more transparent and equitable. Tenants can now be confident that their application fees will be handled correctly, and if they’re not selected, they’ll get a refund. For landlords, the law offers clearer guidelines, reducing the chance of legal trouble and making the whole process run more smoothly.
At HBR Rentals, staying compliant with laws like AB 2493 can feel overwhelming. With all the new rules on application screening fees, credit reports, and written screening criteria, it's easy to get lost. But that's exactly why we're here—to help make sure you're on track with all the details and avoid any headaches down the road.
Here’s how we can help:
- Keep you compliant with AB 2493 and other landlord-tenant laws
- Manage application screening fees and refunds properly
- Guide you through credit report management and landlord's established screening criteria
- Provide tenant screening services to help you pick the best applicants
Want to learn more about the new law or need help with your screening process? Check our Resident Screening page and schedule a free consultation with us today!
FAQs
Is a landlord allowed to charge fees besides the application screening fee?
Landlords can charge additional fees beyond the application screening fee, such as a security deposit, pet fees, or cleaning fees. However, these extra charges must be clearly stated in the rental agreement. While the application screening fee is strictly regulated under AB 2493, any other fees to pay rent must be reasonable, transparent, and disclosed to the tenant upfront, ensuring there are no surprises down the road. Ensure these fees are included in the lease agreement to avoid potential legal issues or disputes with tenants.
Can landlords charge a higher application fee using a third-party screening service?
No, landlords cannot charge a higher application fee because they use a third-party screening service. Under AB 2493, application fees must reflect the actual costs of the screening process, including credit reports or background checks. Using a third-party service does not give landlords the right to increase the fee beyond what is necessary to cover these costs. If the fee exceeds the actual costs, landlords may violate the law, potentially leading to disputes or legal issues with tenants.
What are the rules for charging a screening fee for multiple properties under AB 2493?
A screening fee for multiple rental business properties can be charged, but the fee must be reasonable and only cover the actual costs associated with processing the applications. Under AB 2493, the unused portion of the fee must be refunded if the applicant is not selected for any of the properties they applied for. This applies regardless of the number of properties the applicant was considered for. Landlords must ensure transparency and fairness by providing an itemized receipt and a clear explanation of the fee's application.
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