Gov. Gavin Newsom signed a bill into law late Tuesday, Sept. 13, standardizing reusable tenant screening reports and creating a path to lowering rental application costs.
Assembly Bill 2559, which takes effect in January, will allow renters to buy their own reusable credit reports and submit them to multiple landlords rather than paying over and over for a background check when leasing a home. Landlords can’t charge application fees if they accept a tenant-provided report.
However, the measure’s effectiveness may be in doubt since the new law makes acceptance voluntary. Landlords are free to continue requiring tenants to pay fees ranging from $25-$55 for a separate background check with each lease application.
Tenants complain of spending hundreds of dollars while searching for a new rental. A separate fee is charged for background checks for each adult in the household and for lease co-signers.
Looking for an apartment? That will be $400 in application fees, please
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“Renters are facing one of the most competitive markets in decades with limited availability and yearly rent increases,” the bill’s author, Assemblymember Christopher Ward, D-San Diego, said in a statement. The new law gives “renters and landlords the option to use secure reusable screening reports for multiple properties within a 30-day window.”
Daniel Yukelson, CEO of the Apartment Association of Greater Los Angeles, said concerns about fake or doctored reports may cause some property managers to refuse a tenant’s reusable report. Landlords may be more willing to accept them if the reports come from a third-party, are tamper-proof and are insured against fraud.
In a state “well known for unemployment and rental assistance fraud, most owners would still be reluctant to place faith in something concocted by the legislature,” he said.
Zillow already provides reusable background checks for rentals listed on its website. Transunion has a system where tenants can buy their credit report, then give the landlord a passcode to access it, said Debra Carlton, the California Apartment Association’s executive vice president of state public affairs.
“On the up side, this is a good deal for small landlords who may not have an account with a credit company,” Carlton added. Going directly to a tenant’s credit report eliminates the need for small property owners to go through the cumbersome process of setting up an account, she said.