Come April 1, 2025 California landlords are required by law to implement rent reporting mechanisms that allow tenants to report their payment history. Assembly Bill 2747 (AB 2747) was created with the intent to help tenants build credit using timely rent payments as a tool.
This new law not only benefits tenants, but also adds compliance burdens to landlords and property managers, especially those in charge of multi-unit buildings or portfolio properties.
What Are the Details Surrounding AB 2747?
AB 2747 is a law signed in 2024, set to begin April 2025. It requires certain landlords to voluntarily offer tenants the option of having positive rental payment history reported to at least one of the three major credit bureaus.
The law aims to help tenants validate their rent payments as a recognized credit metric, something previously ignored unless a tenant took extra steps.
Why Was AB 2747 Introduced?
Many Californians spend more on rent than a mortgage, but timely rent payments often go unrecognized in their credit score. With affordability challenges across the state, lawmakers sought to ensure tenants gain financial benefits from their largest monthly expense.
AB 2747 enhances renter rights, improves financial standing, and promotes social inclusivity.
Who Must Comply With AB 2747?
- Landlords leasing 16 or more dwelling units.
- Landlords with 15 or fewer units if structured as an LLC, corporation, or REIT.
Exemptions: Assisted housing developments and non-corporate landlords with 16 units or fewer.
Key Provisions of AB 2747
- Rent Reporting Must Be Offered: Required for all tenants under new and existing leases beginning April 1, 2025.
- Tenant Participation Is Optional: Tenants must consent; landlords must provide clear notices.
- Fee Limitations: Service fees capped at $10/month, cannot be treated as unpaid rent or incur penalties.
- Opt-Out Rules: Tenants may withdraw, with a 6-month restriction before re-enrolling.
What This Means for Landlords & Managers
Administrative Impacts
San Diego Property Managers must create procedures to document rent reporting offers and tenant participation annually.
System & Software Considerations
A compliant platform or service is required to interface with credit bureaus while ensuring data privacy and accuracy.
Compliance Documentation
Landlords must retain tenant election forms, fee disclosures, and reporting records to avoid disputes.
Benefits for Tenants
- Builds credit history.
- Improves access to loans and housing.
- Encourages timely rent payments.
For landlords, these benefits often mean higher tenant retention, reduced turnover, and stronger reputation.
How to Prepare for AB 2747
- ✅ Review your property portfolio and ownership structure.
- ✅ Select a compliant rent reporting service.
- ✅ Create a tenant communication plan.
- ✅ Revise lease templates.
- ✅ Train staff on compliance procedures.
Frequently Asked Questions About AB 2747
1. What is AB 2747 in California?
AB 2747 is a California law effective April 1, 2025, that requires landlords with 16 or more rental units (or certain corporate landlords with fewer) to offer tenants the option to report their rent payments to credit bureaus.
2. Who does AB 2747 apply to?
The law applies to landlords with 16 or more units, or landlords with 15 or fewer units if they own through an LLC, corporation, or REIT. Smaller non-corporate landlords are exempt.
3. Do tenants have to participate in rent reporting?
No. Tenant participation is optional. Landlords must provide notice and obtain written consent before reporting rent payments to credit agencies.
4. How much can landlords charge for rent reporting services?
Landlords can charge a fee, but it is capped at $10 per month per tenant. These fees cannot be treated as unpaid rent or lead to eviction if unpaid.
5. What are the benefits of rent reporting for tenants?
Rent reporting helps tenants build credit history, improve access to loans and housing, and receive recognition for timely rent payments.
6. What steps should landlords take to comply with AB 2747?
Landlords should review their ownership structure, choose a compliant rent reporting provider, update leases, and create a tenant communication plan to stay compliant with the new law.
7. Are affordable housing developments affected by AB 2747?
No. Assisted housing developments and landlords with 16 or fewer units who are not incorporated are exempt from AB 2747.
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Final Thoughts: Turning Compliance Into Opportunity
AB 2747 increases landlord responsibilities, but it also strengthens tenant relationships and supports financial growth. By preparing early, property owners can turn compliance into a competitive advantage.
At Realty Management Group, we help landlords stay compliant while maintaining profitability. Contact us for a tailored property management solution to prepare for AB 2747.
Why Choose Realty Management Group?
At Realty Management Group, we combine local San Diego expertise with data-driven property management to maximize rent, reduce vacancy, and protect your investment.
- Data-backed pricing: market comps, demand trends, and seasonality built into every rent recommendation.
- Tenant screening: credit, background, income, and rental history checks to reduce risk and turnover.
- Leasing & marketing: professional photos, multi-channel listings, and responsive tenant communications.
- Maintenance coordination 24/7: reliable vendors, preventative schedules, and transparent updates.
- Compliance & paperwork: full adherence to California landlord-tenant law, leases, and city regulations.
- Owner reporting: clear statements, cash flow insights, and tax-ready documentation.
Contact Realty Management Group
📞 (619) 456-0000
📧 info@choosermg.com
🌐 www.choosermg.com
