The Ultimate Guide to California Tenant Screening Laws in 2024
Screening and choosing a prospective tenant is one of the first steps of the rental process. Although it's an exciting part of the rental journey, it can be filled with uncertainties due to the challenge of finding the right tenant that will pay rent on time and care for your rental properties, as well as ensuring legal compliance. Thankfully, California has created specific tenant screening laws to protect your investment and your prospective tenants' best interests.
To help you learn California's unique tenant screening regulations, we've crafted this comprehensive guide, covering the entire screening process, from the rental application fee to background checks. Keep reading to uncover the essential facts and strategies for how to effectively screen tenants in the Golden State.
California tenant screening laws fast facts
- What's the most a California landlord can charge for an application fee?
- As of December 2022, California landlords can charge up to $59.67 per applicant for application fees, a figure adjusted annually with the Consumer Price Index.
- Can landlords run background checks in California, and which background checks can they run?
- Yes, landlords can run background checks in California to assess the reliability and suitability of applicants. They are permitted to run background checks such as credit reports, criminal background checks, and rental history checks.
- Does a California landlord need a prospective tenant's consent to run a background check?
- Yes, a landlord in California must obtain the prospective tenant’s consent to run a background check. This is usually done through the rental application process, where the applicant consents to these checks as part of their application submission.
- How much can a landlord charge for a maximum security deposit in California?
- As of July 1, 2024, California's new Assembly Bill 12 (AB 12) will limit security deposits to one month's rent. Prior to the new law, landlords could charge an equal of two months' rent for unfurnished units and three months' rent for furnished units.
California rental application requirements
The rental application is the first step toward screening and finding potential tenants. There are a handful of basic requirements for rental applications outlined in California's landlord-tenant laws that every landlord should know. Those requirements include:
- Application components: A California rental application should include the applicant's contact information, current and previous addresses, employment history, and proof of income. Securely collecting social security numbers, driver's license numbers, and employment details is crucial for a comprehensive evaluation of prospective tenants.
- Adhering to screening fee laws: California law mandates a maximum rental application screening fee, adjusted annually with the Consumer Price Index. As of now, the cap is $59.67 per applicant. Regarding screening fees, landlords must also:
- Provide tenants with an itemized, written receipt.
- Make their application fee refundable if it isn't used for its intended purpose on a tenant screening report.
- Refrain from charging fees if there are no rental units vacant at the time of application.
- If the landlord uses the screening fee to obtain a tenant's credit report, they must provide a copy of the report upon request (California Civil Code §§ 1950.6).
- Background check consent: Essential to the process, landlords must obtain signed consent from applicants before contacting previous landlords or employers, as well as before conducting any background checks, including those on credit, eviction, or criminal history.
It's important to note that landlords cannot ask questions on the rental application related to protected classes, including race, color, religion, sex and sexual orientation, marital status, national origin, ancestry, familial status, or source of income, as part of the Federal Fair Housing Act.
California's laws on background checks
After receiving a prospective tenant's written consent on the rental application, California property owners can move forward with the screening process. California allows landlords to run the following background checks:
- Criminal background check.
- Eviction history check.
- Rental history check.
- Credit report check.
While California law permits these screening reports, state and local laws may differ, which is why it's crucial landlords know the local ordinances of the city their rental property resides in. For instance, Oakland and Berkley strictly prohibit criminal background checks, while San Francisco and Richmond prohibit the use of criminal background checks regarding affordable housing options.
Furthermore, there are some restrictions on the use of criminal background checks in the state. Specifically, landlords cannot use arrest records that didn't lead to convictions as a basis for turning down a renter. They may also not consider the following criminal information in their decision on whether or not to rent to a prospective tenant:
- Infractions or petty charges.
- Convictions that are sealed, dismissed, expunged, or not legally operative (unless the tenant willingly offers this information).
- Anything indicating that the renter was questioned, taken into custody, detained, or investigated by law enforcement.
- Information regarding a referral to or involvement in a “pre-trial or post-trial diversion program or a deferred entry of judgment program” (unless the tenant willingly provides it).
The only way to deny a prospective renter based on their previous criminal activities would be to sufficiently prove that the applicant's prior offenses threaten the health and safety of other tenants or affect their ability to uphold their responsibilities as outlined in the lease agreement.
Choosing a screening service
To ensure you're avoiding potentially discriminating screening practices, it's crucial to have a consistent tenant screening process. One of the best ways to do this is to use screening tools. Screening services can help you obtain a tenant's credit report, eviction history, criminal history, and more, ensuring you're following the same steps each time you look for a new tenant.
Here at Azibo, we offer a comprehensive screening service that simplifies this crucial step. With our intuitive platform, you can efficiently run background and credit checks, helping you find the best tenants while staying compliant with California tenant screening laws.
Once you've decided on a tenant, you'll need to create a rental agreement outlining both your and the renter's responsibilities — Azibo can help you with this, too!
Navigating California's tenant screening laws can be complex, but with the right approach and tools, it can become a seamless part of your rental process. With thorough screening, you can find the best tenant: one who will pay their rent and safeguard your investment.
And, who knows? It could even be the start of a long-lasting positive landlord-tenant relationship, the key to a lucrative rental business.
Disclaimer: The information provided in this post does not, and is not intended to, constitute legal advice; instead, all information, content, and materials are for general informational purposes only. This content may not constitute the most up-to-date legal information. No reader, user, or browser of this article should act or refrain from acting on the basis of information herein without first seeking the advice of a legal professional.