Each year, state law allows for a calculated increase in the amount collected from a rental property owner or their agent from a tenant-applicant to cover the cost of credit reports. Notwithstanding the allowed increase, the law makes clear that the fee can be no more than the actual charge of the screening service and the reasonable value of time spent by the landlord or their agent in obtaining information about the applicant. This year, the fee cannot exceed $62.02. In other words, if the owner’s actual cost is only $55 for the reports and their time spent, they can only charge the $55 per applicant.

This maximum amount of $62.02, effective as of December 2023, is based on the annual increase in the Consumer Price Index, as regulated by the state of California. 

An important update for 2024 also includes changes related to tenant credit reports. Effective Jan. 1, 2023, applicants have been able to purchase their own reusable credit reports. These reports can be submitted to multiple landlords within a 30-day period. 

Landlords are not required to accept these reusable credit reports provided by tenants. However, if a landlord chooses to accept a reusable report, they are not allowed to charge the applicant any application screening fee or a fee for accessing the report from a third-party provider. In essence, by accepting a reusable credit report, landlords waive the right to be compensated for the reasonable value of time spent on obtaining and verifying all applicant screening information. 

Members can follow this link for CAA’s Industry Insights background paper on screening fees.