Meshing your tenant screening techniques with a new law

We were once asked what the most successful eviction is. Our response: One that never occurs at all.

Our law offices are accustomed to nightmare tenants who do not pay rent, wreak damage to the unit, and create unpleasant or even hostile living experiences for neighboring residents. Landlords do not call to tell us that their tenants make timely rent payments, take good care of the property, communicate well, and are enjoyable people to interact with.

Although we rarely encounter these harmonious rental relationships, we know ideal tenants can be found with diligent and consistent tenant screening. Yet, when vetting prospective renters, housing providers must comply with the law.

We are well into 2025 but our office is still fielding questions about laws surrounding tenant screening fees, so let’s review the revisions to Civil Code 1950.6, the result of legislation aimed to enhance transparency in the tenant application process. Landlords and their agents are encouraged to adjust their application procedures to ensure they are aligned with its provisions.

Before we set off to explore the key components of this law, we need to understand that housing providers can choose not to charge any fees. Many landlords prefer not to risk facing the consequences of violating the law, and/or do not want to take on the administrative burden of managing fees and refunds. That is perfectly fine, and the new provisions do not apply.

With that in mind, let’s summarize the rules for those housing providers who charge tenant application fees.

Application when there is no unit to rent

Landlords are prohibited from charging tenant screening fees if they know or should have known that no rental unit is available or will be available within a reasonable time. Makes sense, right? Landlords are in the business of providing housing and are not in the business of profiting from fees.

If an advertisement for a rental unit gets a brisk response, housing providers may consider charging fees until the application is actively reviewed.

Processing a conveyor belt of applications

Applications must be processed in the order received, and landlords are required to approve the first applicant who meets the established screening criteria. More on that later in this article.

Refunding screening fees when a potential tenancy is denied

If an applicant is not selected, landlords must refund the screening fee within specific timeframes:

• Within seven days after leasing to another tenant.

• Within 30 days of the application's submission if no decision has been made.

Credit Report Access

Applicants who pay a screening fee are entitled to receive a copy of their credit report within seven days.

Let’s talk about “first come, first serve"

The law prescribes that although California landlords are not required to automatically accept the first rental applicant, they must process applications in the order received and approve the first qualified applicant who meets their stated screening criteria.

We want to stress that landlords need not lose control over tenant selection decisions. The key is to set a high bar in terms of stated criteria before handing over the keys to the rental applicant, and there can be several boxes to check.

This screening may include an evaluation of income, employment verification, landlord references, and criminal background checks (within allowable legal limits). If one applicant does not meet all of the qualifications, housing providers can move on to the next applicant.

We want to stress this point because many housing providers are under the false impression that they must rent to the first candidate who has a high enough credit score to qualify when in fact, credit scores are not the only consideration in selecting a new tenant.

However, there has to be specificity, transparency, and consistency

One, the landlords must disclose their tenant screening criteria to all prospective rental applicants in writing before accepting application screening fees. Secondly, the criteria must be applied consistently to all applicants to ensure fair treatment; we have to have uniform standards for qualification and not single out any tenants by using a different set of criteria.

If the landlord is sued because they did not accept a rental application, the narrative we’d like to have is that all applicants were notified of what qualifications the successful candidate needs to have. If a disgruntled rental applicant gripes, housing providers can attest that after careful consideration, a more suitable candidate was found.

And that’s it. Landlords and their agents often get into trouble by explaining why a tenancy was denied, whether it is because the rental applicant has children, there is an objection to sexual orientation, or that Section 8 housing vouchers are not accepted, etc. These discriminatory statements fly in the face of fair housing laws. When it comes to explaining why an application was turned down, less communication is more.

Parting thoughts

Of course, landlords and their agents should embrace technology and avail a plethora of tenant screening tools that are available to identify red flags. Yet as we’ve said in many venues, the marvels of technology are no substitute for old-fashioned personal sleuthing like asking a previous landlord if they would rent to the tenant again.

Keep in mind that tenant screening services can overlook many blemishes on a prospective tenant’s records because of cloaked evictions and other concerning details about the applicant’s past that cannot be ferreted out by technology.

Many housing providers with a sense of urgency to fill a vacancy and get cash flow do not conduct their due diligence in vetting rental applicants, but this process should not be done hastily. In the search for an ideal tenant, better to get it right the first time, even if it takes a while.

We need to balance the impulse of landlords to get cash flow against the possibility that a nightmare tenant is ushered into the unit. It may be well worth the wait to find the most excellent tenant rather than settling for one who is questionable. Do the math. Unpaid rent, property damage, and attorneys’ fees can easily put a dent in the bottom lines of landlords who did not invest more time in the selection of a tenant.

At Bornstein Law, we’d like to work ourselves out of a job by once again saying the most successful outcome of an eviction action is for one that never started in the first place because a problematic tenant was never selected at the outset.