California AB 2493 Explained: 2025 Rental Application Fee Rules Every Landlord Must Know
California is undergoing significant changes in rental property management as Assembly Bill 2493 (AB 2493) came into play and reservation of rental application costs will now have to abide the law effective January 1, 2025. Property owners and managers will need to pay attention as AB 2493 will have an important effect on how application fees are billed, collected and even returned.
The intention of this bill is to streamline the processes involved in renting a residence while attempting to safeguard tenants against unreasonable costs. Compliance with the terms of AB 2493 is crucial for landlords, professionals in the rental market and property management agencies in terms of their business reputation and avoiding potential lawsuits which could incur huge amounts of reparations.
In this post, we will hone into what is contained in the new law and its implications to landlords and property managers, and the ways to adapt to the changes while maintaining an edge in the competitive rental market of California.
What Is AB 2493?
AB 2493 is a legislation from California which is approved in the year 2024 and has an effect date starting January 1, 2025. This document alters the existing laws regarding charging application fees in the rental property sector with the major focus being when a fee becomes due, how an application is attended to, and at what point a charge should be reimbursed.
The law seeks to protect rental applicants from being charged screening fees for properties that are not available or being considered genuinely for tenancy.
Why AB 2493 Matters for Landlords and Property Managers
In San Diego, Los Angeles, or around the Bay Area, where rental properties are in high demand, it is quite common to find several dozen applicants vying for a single property. This results in situations where applicants pay screening fees, but never have their applications reviewed—or cases where the property was never available in the first place.
This law makes it easier for tenants by having a more structured and fair process when a landlord or property manager is collecting fees and reviewing applications. It makes the landlords and property managers more accountable and helps to build confidence with tenants, which is always more appealing nowadays.
These regulatory requirements are not easy to comply with, if a business fails these guidelines, they could suffer from civil exposure, damage to reputation, or loss of revenues through contentious or constructive eviction delays.
Important Features of AB 2493
Now, here are the important facets of AB 2493 made simple for everyone:
1.Two Screening Processes for Charging Application Fees Landlords are allowed to charge application fees only if they perform one of the two acceptable screening processes:
Option A: Written Criteria and Sequential Processing Applications must be reviewed based on the order in which they are received. Applicants also must be given written screening criteria when applying. The process ends as soon as a qualified applicant is found. That applicant is then offered the unit. From that point on, no other applicants are considered or charged.
Option B: Refunding Fees If Applicant is Not Selected In this case, landlords need to refund application fees to all unselected applicants if their applications were not processed in the order received. Refunds need to be done either within 7 days after a tenant is selected or within 30 days after an application is submitted, anything prior. This applies even if a background or credit check was done using the applicant's funds.
2. Screening Criteria Disclosure Requirement Landlords must state upfront the criteria that they use to approve or deny tenants. It usually consists of income, minimum credit score, rental history, and background check standards.
Applicants are informed of their evaluation criteria prior to incurring any fees, which allows such disclosure to be made at the time of application.
3.Copies of the Credit Report Must Be Provided
Any credit check completed by a landlord has to be accompanied by a copy of the report for the applicant within 7 calendar days of receipt of the report.
This requirement stands with or without the request of the tenant or even in the event of denied applications.
4.Receipts Must Be Itemized
Every application fee charged by landlords must now be backed up by an itemized receipt that lists:
The total amount of the fee.
A proportionate allocation of the charges (cost of credit report, work done, etc.),
The date the application was received.
The method of delivery (in person, email, or mail).
This has enhanced the degree of transparency in dealings, thus averting chances of undue exploitation.
5.Fees May Not Be Charged When No Units Are Available
Undoubtedly, a major aspect of AB 2493 relates to controlling the payment of fees by landlords who know or, in the presence of reasonable facts, ought to know that no rental units are available or will be available within a reasonable period of time.
This provision aims at safeguarding potential applicants from being fraudulently charged application fees based on speculation.
What Property Owners and Managers Need to Address
If you own or manage residential rental properties in California, its time to get prepared, especially before AB 2493 comes into play.
Here is a checklist to guide you step by step:
✅ 1. Go Over Your Screening Policies and Make Needed Adjustments
Decide if you’ll adopt sequential processing or refundable fees. Each of these approaches comes with advantages and disadvantages that may vary with the volume of applications.
✅ 2. Develop New or Edit Your Existing Screening Criteria
Prepare a separate criterion document for the screening that clearly states:
Ratio of Income to Rent
Minimum Credit Score
Rental History
Disqualifying Factors: Background Check
Ensure that it is in handy and attached to every application for your convenience.
✅ 3. Build a System That can Track Refunds
If you go for the refundable fee option, devise a system to track:
Date for Application
Date tenant is opted
Due date for refunds
Date refund is proof
Tools that automate processes or property management systems can expedite this process significantly.
✅ 4. Ensure Your Leasing Staff is Properly Trained
Ensure that all participants in tenant screening understand the new rules and how to enforce them. Legal exposure can come from even legitimate mistakes if they step out of bounds from the bill’s provisions.
✅ 5. Send Credit Reports Within The Primary Deadline
Establish an appropriate system that enables you to provide credit reports of candidates within the mandated period of 7 days.
How AB 2493 Affects Tenants
AB 2493 is favorable for renters. It:
Stops exploitation and unjust processing
Supports fairness in the decision-making process
Improves access to screening data
Fosters good leasing practices
If landlords adhere to these principles, they will enhance their image and reputation while attracting better-suited tenants and minimizing conflicts during the application process.
Final Thoughts: Plan Ahead, Don’t Wait
The state of affairs concerning renting in California is always changing, and so will 2025. Assembly Bill 2493 has been introduced to deal with issues of the lack of openness, injustice, and high prices in the housing market.
This does, however, give a genuine chance for sensible landlords and property managers to distinguish themselves by treating their properties well.
Nailing your processes today will not just get you out of legal trouble; you’ll also foster positive relationships with tenants, lease out properties faster, and strengthen your position for years to come.
Realty Management Group keeps track of shifts in housing laws in California so that our clients do not miss a thing. If you’re a landlord looking for professional assistance with AB 2493 and other recent changes, we specialize in making property management legal, effortless, and profitable.
Reach out today, and let us help you maximize the potential your property has to offer – consultations are free!
