Charging a rental application fee sounds simple — run a credit check, pass the cost to the applicant. In California, it isn't that simple. State law has capped and conditioned screening fees for years, and a 2025 law tightened the rules further on how landlords are allowed to use the process at all. Charging the fee correctly matters, because getting it wrong exposes you to the applicant's actual damages, plus the fee itself, plus potential attorney's fees.
What a Screening Fee Is Actually Allowed to Cover
Under California Civil Code § 1950.6, an application screening fee can only cover your actual out-of-pocket costs of gathering and processing an applicant's information — things like a credit report, a background check, or a rental history verification — plus reasonable time spent reviewing it. It is not a flat charge you're entitled to collect just for accepting an application.
The fee is also capped. The statutory baseline started at $30 and is adjusted annually based on the Consumer Price Index — by 2025, that adjusted cap had climbed into the low sixty-dollar range. The exact current figure changes each year, so don't assume last year's number is still accurate; confirm the current cap before setting your fee.
You Must Provide an Itemized Receipt
If an applicant pays a screening fee and requests it, you're required to provide a receipt itemizing your out-of-pocket expenses and the time spent obtaining and processing their information. If you request a consumer credit report as part of the process, the applicant is also entitled to a copy of that report on request.
AB 2493: What Changed in 2025
As of January 1, 2025, AB 2493 added a new layer of process requirements on top of the existing fee cap. If you charge a screening fee, you now have to pick one of two lawful approaches:
- First-qualified-applicant approach — you publish written screening criteria up front, and the first applicant who meets that criteria is approved. Applicants are not charged a fee unless and until their application is actually under consideration.
- Multiple-applicant review approach — you can screen several applicants at once, but if an applicant isn't selected, their fee must be refunded in full, regardless of the reason. The refund has to go out within seven days of selecting a tenant, or 30 days from the application date, whichever is earlier.
AB 2493 also closes a specific loophole: you can no longer collect a screening fee when you know, or reasonably should know, that no unit is actually available — or won't be available within a reasonable period.
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Why This Matters More for Multi-Applicant Situations
Most of the exposure here comes from the "multiple applicant" scenario — a small landlord accepting applications from three or four interested renters for one open unit, collecting a fee from each, and only formally tracking the one they eventually approve. Under AB 2493, every unselected applicant is owed a refund on a fixed clock, whether or not you remembered to circle back to them. If you're not deliberately tracking who applied, when, and whether they were selected, it's easy to let a refund deadline pass without meaning to.
Credit Report Freezes
One related wrinkle: applicants can place a security freeze on their credit report, which blocks anyone — including you — from pulling it without the applicant temporarily lifting the freeze or authorizing access. If an applicant's report is frozen and they don't lift it, you may not be able to complete the credit-check portion of your screening process on the original timeline; this isn't a violation on your end, but it's worth knowing so you're not caught off guard mid-review.
Building a Compliant Screening Process
Starting April 1, 2027, SB 1296 requires an application-fee refund within seven business days of a request if you collected the fee without first providing your written pet policy.
For a small landlord handling applications directly rather than through a large property management company, the safest approach is usually the first-qualified-applicant method — it avoids the refund-tracking burden entirely, since you're only ever collecting a fee from the one applicant actually under review. Whichever method you choose, put your screening criteria in writing before you start collecting applications, and keep a receipt trail for every fee collected.
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This article is for general informational purposes and isn't legal advice. Screening fee caps adjust annually — confirm the current figure and consult a licensed attorney before finalizing your application process.