Charging Screening Fees in 2025: California's New Rules Under Civil Code 1950.6

How AB 2493 Changed What Landlords Can Charge and When

As of January 1, 2025, California housing providers must follow updated rules when charging tenant screening fees. Assembly Bill 2493 (AB 2493) amended Civil Code § 1950.6 to clarify when screening fees are allowed, what disclosures must be made, and when refunds are required.

Here’s how to stay compliant, whether you screen one applicant a year or hundreds.

1. You Can Only Charge a Screening Fee If You Follow an Approved Process

California law allows landlords to charge a screening fee only if they follow one of two approved screening processes (explained in Sections 2A and 2B below).

But before choosing either model, landlords must comply with two key baseline requirements:

• You must provide written screening criteria to all applicants (including guarantors) at the time of application

• You must give each applicant an itemized receipt for any screening fee you collect

If you do not provide written criteria up front, you cannot lawfully collect a screening fee—regardless of which model you use.

(A) Adopt a Sequential Screening Model:

• Screens applicants in the order received

• Offers tenancy to the first qualified applicant

• Provides screening criteria in writing with the application

• Charges fees only if the application is actually considered

This process also applies to guarantors and co-signers. If a guarantor’s credit or background is screened and a fee is charged, you must provide them with written screening criteria and follow the same order-based processing and refund rules. They are considered applicants under Civil Code Section 1950.6.

Importantly, the law clarifies that a refund is not required if the applicant (or guarantor) was considered but denied based on your stated criteria.

Civil Code Section 1950.6(c)(2)(A)(iv) states:
“A landlord or their agent shall not be required to refund an application screening fee to an applicant whose application is denied, after consideration, because the applicant does not meet the landlord’s established screening criteria.”

(B) Adopt a Refund-All Model:

• Allows the landlord to collect a fee up front

• Requires a full refund to any applicant not selected for tenancy, regardless of reason

• Refund must be issued within 7 days of selecting a tenant or within 30 days of application submission, whichever comes first.

This model is more flexible procedurally, but stricter on refunds. It also applies to guarantors and co-signers. If a guarantor who was charged a screening fee was not selected, the full amount must be refunded within the same timeline. The law treats guarantors as applicants entitled to the same protections, even if they do not intend to occupy the unit.

For rental housing providers in Berkeley and beyond, it’s critical to treat every participant in the application process, tenants and their guarantors, as consumers entitled to transparency, fairness, and a prompt refund if they aren’t ultimately selected.

2. Screening Fee Limits

You may not charge more than your actual out-of-pocket costs, including:

• Third-party screening services (e.g., credit, eviction reports)

• The reasonable value of your time spent processing the application

The original maximum screening fee was set at $30, but it is adjusted annually for inflation based on the Consumer Price Index (CPI).
📌 For 2025, the CPI-adjusted cap is $65.14 per applicant.

3. Itemized Receipt Required

You must give each applicant a written receipt that:

• States the total amount collected

• Itemizes the actual expenses and time involved

This can be delivered by hand, mail, or email (with the applicant's consent), and is required regardless of whether the applicant requests it.
(Civil Code § 1950.6(d))

4. Refunds Are Required If You Collect a Fee, But Don’t Actually Screen

If you collect a fee but don’t obtain a credit report or reference check, you must refund the unused portion.
(Civil Code § 1950.6(e))

5. You Must Deliver a Copy of the Credit Report

If you run a credit report, you must give the applicant a copy within 7 days of receiving it by personal delivery, mail, or email.
(Civil Code § 1950.6(f))

6. Reusable Reports Are Optional—But No Fees if You Accept One

Under Civil Code § 1950.1, applicants may provide a reusable screening report; a tenant-initiated credit report from a third-party provider. However, landlords are not required to accept reusable reports.

If you choose to accept one, you may not charge a screening fee, even if you verify additional information.

Reusable reports may be a fit for some landlords, especially in high-volume or student-heavy markets, but you retain the right to require a new screening through your preferred process.

(Civil Code § 1950.6(g))

Final Thoughts

The law now provides landlords with two lawful options for collecting a screening fee. Regardless of the path you choose, full compliance is required, including written screening criteria, itemized receipts, and timely refunds when applicable.

Even if you do not charge a screening fee, it's considered best practice to provide a copy of the credit report to any applicant (or guarantor) whose report you run. Doing so promotes transparency, builds trust, and can help avoid confusion or disputes.

Importantly, if you decline to rent to an applicant based on information in their credit report, you are legally required to issue an Adverse Action Notice under the Fair Credit Reporting Act (FCRA). This applies whether or not a screening fee was collected.

Be transparent, document your process, and when in doubt, share the report and issue the proper notices.

Disclaimer: This article is for general educational purposes only and does not constitute legal advice. Housing providers should consult with qualified legal counsel regarding their specific practices.