The maximum allowable tenant screening fee has gone up. Here’s what housing providers can and can’t do. 

We remind housing providers that we cannot make any profit off of tenant screening fees. Prospective tenants can only be charged for out-of-pocket expenses in ferreting out information on the rental applicant, as well as the reasonable time the landlord or their agents spent in the screening process.

Adjusted for inflation, the maximum tenant screening fee for 2024 is $62.02, but don’t bank on that just yet. We need to look at the actual cost of vetting the rental applicant. Let’s say that housing providers incur the tenant screening cost of $40. The landlord cannot pocket $22.02.

Moreover, the tenant cannot be charged when the landlord knows that a rental unit is not available or will not be available in a reasonable period.

One exception is when a tenant agrees in writing that he or she knows that there are no units available to rent. Perhaps it is a beautiful living arrangement, the applicant fell in love with the building, and they want to get in line to rent it. For the landlord to pass on the screening expenses to the aspiring tenant, it must be understood in writing that there are no vacancies.

New California laws normally do not favor housing providers but in a rarity, AB 1765 gives landlords the convenience of emailing the rental applicant an itemized receipt of expenses incurred. Before this new law, the landlord would have to hand deliver this ledger or put it in the mail.

Reusable credit reports

Apartment shoppers can shell out hundreds of dollars in credit screening reports to get approved for their new abode. So AB 2559 is a new law that allows renters to reuse a third-party company to acquire a tenant screening report and submit it to multiple landlords within 30 days.

In other words, tenants need not pay for ten screening reports and instead, have one for everyone to see.

This is optional for housing providers. There are concerns that rental applicants could doctor reports. We can attest that people seeking housing will go through elaborate means to conceal their checkered past.

Read our earlier article: Evictions, bad credit, broken leases, and any other blemishes are no barrier to renting as some shadowy merchants peddle a new identity that conceals rental risks of applicants seeking to wipe out their past »

Technology is not a panacea

There are dazzling tenant screening tools out there that give housing a snapshot of a tenant’s history, but we don’t want overreliance on them. Many blemishes can be concealed.

A landlord can be horribly disappointed to learn that even though a rental applicant checks all of the boxes and looks like an ideal candidate on paper, the tenant becomes problematic.

For this reason, we want to have a dialogue with those applying for a rental unit and get to know them. We want to call prior landlords and ask them point blank: “Would you rent to Sally again?”

Keep in mind that in some locales, inquiring about a rental applicant’s criminal history is prohibited and there is generally a culture of amnesty in California where people deserve second chances and should have mistakes, including eviction histories, crimes, and tarnished credit concealed.

Our motto is that the best way to resolve a landlord-tenant dispute is to avoid it to begin with, but landlording is inherently a people business. All of the bells and whistles of technology cannot be used as a crutch in tenant screening. There is no substitute for old-fashioned personal sleuthing.