Disclaimer: This article is for informational purposes only and should not be construed as legal advice. We recommend consulting with a legal professional for specific guidance on how to comply with California's rental laws and regulations. While we strive to provide accurate and up-to-date information, the laws and regulations surrounding rental applications in California are subject to change.

Imagine this scenario.

You’re a leasing agent in California, and you need to fill your open vacancies fast. After a thorough analysis, you compare and approve a qualified applicant. So, you reach out to get the lease signed and email the other applicants informing them that a different applicant has filled the vacancy. 

Minutes later, you receive an email that makes your stomach tighten. A prospective applicant says your rental application process was biased and threatens to sue. How do you know your rental application process follows all CA regulations?

California has strict laws and regulations around rental applications, and failure to comply can result in costly legal problems. Following regulations is a must, but managing the rental application process can take time with so many regulations. Thankfully, modern leasing tools and software can help you comply.

The best thing you can do to avoid these risks is to understand the laws, regulations, and best practices for rental applications in California. That’s why we’ve compiled this list of resources to inform you of some of the California-specific rental application regulations and help you stay compliant. (This is by no means an exhaustive list., We highly recommend speaking with your attorney to provide expert advice for your particular situation).

Let’s dive in.

3 Must-Haves for Every California Rental Application

California's property managers and leasing agents can face hefty fines and legal trouble for violating renter rights, discrimination laws, and privacy regulations. Even unintentional mistakes can lead to significant problems. Understanding application basics and how CA rental application fees work is a great starting point.

1. Compliance With California’s Renter Background Check Laws

Regulations regarding renter background checks or researching to learn more about a prospective tenant’s credit history, employment, or even criminal activity, vary depending on location.  Knowing your area's tenant background check regulations is vital to stay compliant.

For example, the recently passed Fair Chance Act forbids property owners and managers from telling prospective renters with criminal records not to apply for rentals. It also ensures that the same group can legally move in with approved family members.

2. An Available Vacancy (no backfilling)

Especially in a volatile market like the current real estate industry, owners and PMs might be tempted to backfill rental properties to minimize vacancies and ensure profitability. While keeping track of and accepting rental applications on a rolling basis is legal, it’s illegal to charge a fee for the rental application process without an available unit and the applicant’s explicit written permission. 

3. An Appropriate Application Fee

If you plan to have an available unit within a reasonable timeframe, you may charge an application fee so long as you are not profiting from the cost. In California, this amount is currently capped at $59.67 per application based on the Consumer Price Index.

3 California Rental Application Laws and How They Might Affect You

While many federal and state laws affect the rental application process in California, you’re likely to interact with these three regularly.

The Fair Housing Act 

The Fair Housing Act, passed in 1968, protects tenants Across the U.S. from discrimination during most aspects of the rental or home-buying process. It also applies to other housing-related activities like seeking housing assistance or getting a mortgage. 

While the act is extensive, it boils down to prohibiting someone’s access to or approval of a property based on demographic criteria, including:

• Race and color
• Nation of Origin
• Religion and spiritual beliefs
• Sex and sexuality or gender identity
• Marital and family status 
• Seen and unseen disabilities

Check out the U.S. Department of Housing and Urban Development for more information about specific aspects of the Fair Housing Act and how it applies to you. 

How the Fair Housing Act Protects Renters in CA

The Fair Housing Act’s national precedence also sets the tone for California’s discrimination laws, requiring all owners and property managers to comply with regulations. For example, if a renter or prospective renter feels they may be a victim of unfair discrimination. CA’s Department of Fair Employment and Housing also evaluations and investigates discrimination claims and complaints to ensure everyone receives fair consideration.

California Consumer Privacy Act (CCPA) 

The California Consumer Privacy Act (CCPA), passed in 2018, lets consumers control how their personal information is collected and used by businesses. These privacy rights also include how that information is used, shared, and deleted. It also mandates the right for consumers to opt out of data sharing and protects them from discrimination if they choose to exercise those rights.

Recent 2023 amendments to the CPPA include rights to correct inaccurate information and to limit how a person’s sensitive data is used and disclosed.

How CCPA Impacts Tenant Screening

Businesses subject to the CCPA–including companies in the real estate industry like brokers, property owners, and PMs–must tell consumers their rights and how to exercise them. For applicants or prospective renters providing their information to try and gain residency, CCPA helps them control the information they share and ensure that it is used safely and securely.  

California Civil Code §1950.6

California Civil Code §1950.6 controls the application screening fee that a property owner or manager can charge an applicant to cover costs associated with that process. It takes time and resources to pull information like credit reports and background checks and to check references, and it could be tempting to charge the applicant for your time on top of the resource costs. 

This code protects against that, explicitly stating that any screening fee “shall not be greater than the actual out-of-pocket costs of gathering information concerning the applicant, including, but not limited to, the cost of using a tenant screening service or a consumer credit reporting service, and the reasonable value of time spent by the landlord or his or her agent in obtaining information on the applicant.”

How Civil Code §1950.6 Caps Screening Fees

Currently, California’s maximum tenant screening fee is $59.67. This civil code legally protects a prospective renter’s best interest and prevents you from charging them more than that amount for the rental application screening process. However, exceeding that screening amount could have severe consequences, so knowing and staying within current rental application screening caps is vital. 

Navigate the California Rental Application Process like a Pro

Knowing the laws, regulations, and rental application best practices can help you better navigate California’s challenging rental marketing. Working with a legal professional to help you truly understand them is critical to protecting your business from costly litigation and fines and protecting the rights and privacy of prospective renters.

Depending on state regulations, most rental application screening platforms let you customize online rental applications. They can instantly flag non-compliance to keep you from making accidental mistakes like overcharging applicant screening fees. Software also saves time and resources, managing rental applications without introducing a greater risk of error or another manual process.

Intellirent streamlines your application process to help screen applicants quickly and, in conjunction with your legal counsel, can be configured to help identify potential non-compliance.

Intellirent is an end-to-end rental application screening tool that offers a suite of marketing, screening, and collaboration tools to automate and simplify your leasing process and can customize Intellirent with the rental application laws for whatever state you’re operating in. For more information on how Intellirent can help, set up a product tour.

Disclaimer: This article is for informational purposes only and should not be construed as legal advice. We recommend consulting with a legal professional for specific guidance on how to comply with California's rental laws and regulations. While we strive to provide accurate and up-to-date information, the laws and regulations surrounding rental applications in California are subject to change.