Effective January 1, 2025
We are writing to remind and inform you of the important changes to California Civil Code Section 1950.6 that became effective Jan. 1 of this year (20205). These changes impact how you handle screening fees and communicate rights to prospective tenants.
Signed into law under AB 1764, the law now requires updated documentation and procedures during the rental application process.
Linked (below) in this email, you will find a detailed summary prepared by the California Apartment Association outlining the new legal obligations. We strongly encourage you to review this document thoroughly.
For a quick summary, below are the top-line highlights to be aware of:
Key Highlights for Property Managers
Mandatory Fee Disclosure
You must now provide applicants with a written disclosure of:
- The actual or estimated cost of the screening fee.
- The applicant’s right to a copy of any screening report obtained.
- The fact that the fee is non-refundable (even if no report is pulled) unless the unit is rented to another applicant without screening.
Itemized Receipts Now Required
You must now provide an itemized receipt upon request showing:
- The screening fee that was charged.
- The specific expenses incurred (e.g., background check, staff time).
Fee Limit Adjustment
- The screening fee cap is now indexed to inflation.
- Since 2023, the maximum screening fee has been capped at $62.02. If adjustments are made, they are typically applied annually at the beginning of the year.
Additional Applicant Rights
You must now inform applicants:
- They have the right to dispute inaccurate information in a screening report.
- They ability to obtain a free copy of the report directly from the screening agency.
What This Means for You
We urge you to
- Review the Attached Summary: Understand the new documentation and compliance requirements outlined in the attached document.
- Update Application Forms: Ensure your application templates and fee disclosures are updated to reflect the new requirements.
- Train Your Leasing Teams: Make sure all staff involved in application processing are aware of the updated fee limits, required disclosures, and applicant rights.
Click the link to access the Updated Screening and Application Requirements.
Mehigan Law is Here to Help
At Mehigan Law, we’re dedicated to guiding you through these changes. Please don’t hesitate to contact us if you have questions or need assistance updating your forms and procedures.
You can also find other information on our MehiganLaw.com blog by visiting our Eviction Law Blog.
Sincerely,
The Mehigan Law Team
