Rental Application Fees in California: What Civil Code 1950.6 Lets LA Owners Charge
A unit goes up on Monday. By Wednesday you have five completed applications, a cosigner for one of them, and an applicant who would rather send you the screening report she bought last week. Each of those people may have paid you a fee, and each fee now comes with obligations: a receipt, a copy of the credit report, and in some cases a refund on a deadline.
The rules are in California Civil Code section 1950.6. AB 2493 (Chapter 966, Statutes of 2024) rewrote the part of it that says when you may collect a fee at all, and that change has applied since January 1, 2025. It covers every residential rental in the state, so it applies the same way in Inglewood, Culver City, Beverly Hills and the City of Los Angeles. This guide walks through what the statute says, in the order you run into it while leasing a unit.
The short version. You may charge each applicant, including a guarantor or cosigner, a fee no higher than your actual screening cost plus the reasonable value of your time, and never more than $30 adjusted for inflation since 1998. You may collect it only if a unit is or soon will be available, and only if you use one of two processes: consider applications in order and approve the first qualified one, or refund every applicant you do not choose. Give an itemized receipt, return any part you did not spend, and send the applicant a copy of the credit report within seven days of receiving it.
What counts as an application screening fee
Section 1950.6(i) defines the fee as any nonrefundable payment a landlord or agent charges an applicant to buy a consumer credit report and to validate, review or otherwise process a rental application. If money changes hands so that you can screen someone, this section governs it, whatever your listing calls it.
Two definitions widen the reach. “Landlord” means an owner of residential rental property, and every duty in the section runs to “the landlord or their agent,” so a property manager collecting fees on your behalf is held to the same rules. “Applicant” includes any person or entity asking to rent, and also anyone who agrees to act as a guarantor or cosigner on the rental agreement. The fee limit is per applicant.
Subdivision (k) adds that the screening fee is not an advance fee under Business and Professions Code section 10026 and is not “security” under Civil Code 1950.5. It is a separate charge with its own rules. Security deposits are covered in our California security deposit guide.
How much you can charge
Subdivision (b) sets two ceilings, and the lower one controls.
The first is your actual cost: the out-of-pocket cost of gathering information on the applicant, including a tenant screening service or credit reporting service, plus the reasonable value of the time you or your agent spend obtaining that information. If your screening service charges you a set amount per report and you spend a few minutes reviewing it, that cost and the value of those minutes are the limit, even if the statutory maximum is higher.
The second is the dollar cap. The statute says the fee may not exceed $30 per applicant and that the $30 “may be adjusted annually by the landlord or their agent commensurate with an increase in the Consumer Price Index, beginning on January 1, 1998.”
Read that sentence closely. The adjustment is made by the landlord, not announced by an agency, and the statute does not name a CPI series (national or Los Angeles area) or the months to compare. That is why the 2026 figures you will see quoted by screening companies, law firms and listing sites do not match one another. A defensible approach is to pick a published CPI series, write down the index values and dates you used, and keep that calculation with your leasing file. If your number is higher than other published figures, be ready to explain it.
In practice, the cost ceiling is the one to watch. A fee set at the inflation-adjusted maximum is still too high if your screening only cost a fraction of it, and the itemized receipt you must hand over will show the gap.
When you cannot charge a fee at all
Subdivision (c)(1) prohibits a screening fee when you know or should have known that no rental unit is available at that time or will be available within a reasonable period. Collecting fees to build a waiting list for a building with no upcoming vacancy is the plain case. Once you have approved a tenant for the unit, taking more paid applications for it raises the same question, because the unit is no longer available unless that deal falls through.
If a unit is coming available, for example because a tenant has given notice, you can take applications. Be ready to show why you expected the unit to be ready within a reasonable time.
The two lawful ways to collect: in order, or refund the rest
Since January 1, 2025, subdivision (c)(2) allows a fee only if, at the time you collect it, you offer one of two screening processes. You choose which one. Say in writing which one you use.
Option A: consider applications in the order received
Under (c)(2)(A), all of the following must be true:
- Completed applications are considered, under your established screening criteria, in the order in which the completed applications were received.
- Your screening criteria are given to the applicant in writing, together with the application form.
- The first applicant who meets your criteria is approved for tenancy.
- Applicants are not charged a screening fee unless or until their application is actually considered.
The statute allows for the reality of online listings. If you inadvertently collect fees from several people because applications came in at the same time, you are not in violation as long as you refund the fee within seven days to anyone whose application is not considered. Instead of a refund, you may offer to apply that fee to an application for another of your rental units, but it is the applicant’s choice, not yours.
You do not have to refund an applicant whose application was considered and denied because they did not meet your established criteria. That is the trade Option A makes: you keep fees from people you actually screened and turned down, but you give up the right to pick among several qualified applicants. The first one who qualifies gets the unit.
Option B: refund everyone you do not select
Under (c)(2)(B), you may screen applicants in any order and choose among them, but you must return the entire screening fee to every applicant who is not selected, regardless of the reason. The deadline is seven days after you select an applicant for tenancy or 30 days after the application was submitted, whichever comes first.
The 30-day clock matters on slow listings. If an application has been sitting for 30 days and you have not chosen anyone, the refund to that applicant is due even though the unit is still open.
Choosing between them
Option A suits an owner who has written, objective criteria and is comfortable approving whoever meets them first. Option B suits an owner who wants to compare qualified applicants, at the cost of returning every fee except the one paid by the person who gets the unit. Either way, the written criteria are worth having. California and federal fair housing law expect the same standards to be applied to every applicant, and a written list is how you show that you did.
The receipt, the leftover money and the credit report
Three duties apply no matter which option you use.
An itemized receipt
Subdivision (d) requires you to give the applicant a receipt for the fee, delivered personally or by mail. It must itemize the out-of-pocket expenses and the time spent by you or your agent obtaining and processing the information. You and the applicant may agree to have the receipt sent to an email address the applicant provides. A receipt that says only “application fee” does not meet the statute.
Return what you did not use
Under subdivision (e), if you do not perform a personal reference check or do not obtain a consumer credit report, you must return any part of the fee you did not use for the purposes the section allows. If the applicant withdraws before you order the report, or you stop because the unit has been rented, the unspent portion goes back.
A copy of the credit report within seven days
Under subdivision (f), if the applicant paid a screening fee, you must give that applicant a copy of the consumer credit report within seven days of receiving it, by personal delivery, mail or email. This applies to every applicant who paid, approved or not. Check whether your screening service sends the copy to the applicant automatically, and keep proof that it went out.
Reports the applicant brings to you
Subdivision (a) says a landlord may, but is not required to, accept and rely on a consumer credit report the applicant presents. Section 1950.1 adds a more specific category: the reusable tenant screening report.
A reusable tenant screening report is a consumer report prepared within the previous 30 days by a consumer reporting agency at the applicant’s request and expense, made available to the landlord directly or through a third-party website, at no cost to the landlord. It must include the applicant’s name, contact information, verification of employment, last known address and the results of an eviction history check, and it must prominently state the date through which its information is current.
You decide whether to accept these reports at all; section 1950.1(h) says you are not required to. But if you do accept them and an applicant provides one, you may not charge that applicant a fee to access it or an application screening fee. You may require the applicant to state that there has been no material change to the information in the report. Section 1950.1(g) also provides that where a city or county policy conflicts with the section, the one more protective of applicants applies, so check local rules before you write a policy.
If you accept reusable reports, put that in your written criteria, and apply it the same way to everyone.
Applicants with a government rent subsidy
Government Code section 12955(o) adds two rules where an applicant has a government rent subsidy, such as a Housing Choice Voucher:
- Any financial or income standard must be based on the portion of the rent the tenant will pay, not the full contract rent.
- If you use credit history in the application process, you must offer the applicant the option, at the applicant’s discretion, of providing lawful, verifiable alternative evidence of a reasonable ability to pay the tenant’s portion, such as government benefit payments, pay records and bank statements. If the applicant chooses that route, you must give a reasonable time to respond and reasonably consider the alternative evidence in place of credit history.
The same subdivision confirms you may still verify employment, ask for landlord references and verify identity. Building this option into your written criteria from the start is simpler than adding it applicant by applicant. Our Section 8 voucher guide covers the rest of the voucher process.
If you turn someone down because of the credit report
The fee rules sit next to a separate notice duty. Under Civil Code 1785.20(a), anyone who takes adverse action based in whole or in part on information in a consumer credit report must give the consumer written notice that includes the name, address and telephone number of the credit reporting agency that furnished the report; a statement that the decision was based in whole or in part on information in a credit report; and notice of the consumer’s right to a free copy of the report from that agency within 60 days and the right to dispute its accuracy or completeness. Federal law imposes a parallel adverse action requirement. Our tenant screening guide covers screening criteria and fair housing more broadly.
A checklist before you collect the first fee
- Confirm a unit is available now or will be within a reasonable time.
- Write your screening criteria and attach them to the application form.
- Choose Option A (in order, first qualified approved) or Option B (refund everyone not selected) and state it in writing.
- Set the fee at or below your actual screening cost plus the reasonable value of your time, and at or below the CPI-adjusted cap. Keep the calculation.
- Decide whether you accept reusable tenant screening reports, and say so in the criteria.
- Prepare an itemized receipt template showing out-of-pocket costs and time.
- Track two dates for each applicant: when the credit report arrived (copy due within seven days) and, under Option B, the refund deadline.
- Offer the alternative-evidence route to any applicant with a government rent subsidy.
- Have an adverse action notice ready for any denial based on a credit report.
On the properties we manage, screening is part of leasing, which we quote separately from our flat fee management. For Culver City rentals, see our Culver City page for the city’s own tenant protections, which apply once the lease is signed.
Want your leasing paperwork checked?
Call (310) 272-9847, email info@bessaproperties.com, or book a 30-minute call. Our flat fee management is one predictable monthly amount, not a percentage of rent, covering rent collection and maintenance coordination, with leasing quoted separately. See how we work in Beverly Hills, Culver City and Inglewood.
Book a 30-minute call →Questions owners ask
Can I charge the cosigner a screening fee too?
Yes. Section 1950.6(j) includes a guarantor or cosigner in the definition of “applicant,” so the same limits, receipt, refund and credit report rules apply to that person’s fee.
What is the exact maximum fee for 2026?
The statute sets $30 and lets the landlord adjust it each year for increases in the Consumer Price Index since January 1, 1998, without naming the index. No single official 2026 figure is set by the statute, which is why published numbers differ. Use a documented calculation, and remember your actual cost may be the lower limit.
An applicant withdrew after paying. Do I keep the fee?
Under subdivision (e), if you had not yet run the reference check or credit report, return the unused portion. Under Option B, an applicant who is not selected gets the entire fee back whatever the reason. Under Option A, fees are not charged until an application is actually considered.
Do I have to accept a screening report the applicant already bought?
No. A landlord may accept an applicant’s own credit report but is not required to, and section 1950.1 does not require you to accept reusable tenant screening reports. If you do accept a reusable report, you may not charge that applicant a screening fee or an access fee.
Do these rules apply to my property manager?
Yes. Each duty in section 1950.6 is written for “the landlord or their agent.” If a manager collects fees for your property, the manager must follow the same limits, and it is worth confirming which option they use and how they track refunds.
Does section 1950.6 apply to commercial space?
No. It covers requests to rent residential property. A mixed-use building’s apartments are covered; its storefronts are not.
Sources and disclaimer. California Civil Code sections 1950.6, 1950.1 and 1785.20, and Government Code section 12955(o), read from the text published by the California Legislature as reproduced at California.Public.Law; AB 2493 (Pellerin), Chapter 966, Statutes of 2024. Current as of October 2026. This article is general information for property owners from a California DRE-licensed property management company, not legal advice. Fee amounts, CPI calculations and screening policies should be confirmed with a real estate attorney before you rely on them.
