Legislators are always coming up with new landlord-tenant laws that would protect tenants and property owners in the rental housing industry, and it is a landlord's responsibility to stay up-to-date to safeguard their real estate investments. 2025 has brought on new laws and regulations that you might not know about yet, and this list can help you ensure legal compliance in California.
AB 2747
Assembly Bill 2747 requires landlords to inform tenants of their option to have their rent payments reported to at least one nationwide consumer reporting agency. When a tenant opts for it, you must regularly report rent payments made to credit bureaus, whether it's on time or missed payments.
The law dictates that landlords can charge a $10 fee in exchange for the tenant's positive rental payment reporting and prescribes requirements for how the offer of rent reporting is made. Remember that eligible tenants are only those who entered a lease no later than April 1, 2025.
Furthermore, you must keep accurate records of all positive rental payment information and ensure that any reporting done to a credit bureau is correct, as this can negatively affect a tenant's financial prospects outside of their lease agreement.
Landlords are required to offer tenants the option of positive credit reporting. However, they are exempt if they are small, non-corporate landlords (landlords own 15 or fewer dwelling units and are not part of a corporation, real estate investment trust, or limited liability company with corporate members).
AB 2801
AB 2801 is among the new tenant protection laws regarding security deposits. For one, certain limitations are set on what a landlord can deduct from the security deposit. As the property owner, you can only use the amount necessary "to restore the premises to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear."
You are also prohibited from issuing security deposit deductions or charging tenants for professional carpet cleaning or other professional cleaning services unless reasonably necessary to return the rental property to its original condition.
The law requires landlords to notify tenants within a reasonable time before the end of the lease term or termination of tenancy. Once deductions have been made, you must provide an itemized statement specifying the charges and inspection photos to back it.
If the tenant requests it when the tenant's rental agreement ends, it is within their right to be within the rental unit while inspections are conducted.
AB 2493
Assembly Bill 2493 states that a landlord can only charge a tenant screening fee if there is an available rental unit within a reasonable period, which includes the costs of tenant screening services or a consumer reporting agency, along with the reasonable value of time spent by the landlord in acquiring information.
You must provide an itemized receipt of the out-of-pocket expenses and time spent, and you cannot charge more than $30. If the tenant is not selected, you must refund the application screening fee incurred within 7 days after the selected tenant has been notified or within 30 days after the application was submitted.
For transparency, tenants must be given a copy of the landlord's established screening criteria, application form, and a copy of their consumer credit report by personal delivery, mail, or email within 7 days of receiving the report.
Prospective tenants can provide you with a reusable tenant screening report regarding their credit history and other essential information. As per California law, you are prohibited from charging any fees to access the report.
SB 611
SB 611, approved in September 2024 after being opposed by the California Apartment Association in 2023, requires landlords to include mandatory fees, security deposits, and charges in the actual cost of the rent for rental real estate.
Additionally, landlords must inform the tenant about the maximum monthly cost paid by previous tenants for utilities and provide potential tenants with copies of the two most recent utility bills. Property owners may not impose fees for termination notices, or for tenants paying rent and security deposits through checks.
The lease agreement should include a written explanation if the landlord charges a military service member a higher-than-standard or advertised security deposit.
Tenants will be allowed to use violations of the provisions as a defense in unlawful detainer complaints. If a landlord doesn't comply with the Senate Bill, severe financial penalties may also be incurred.
SB 1051
The existing real estate law, approved in 2024, requires the landlord to change the locks of a protected tenant's unit. Protected tenants are victims of domestic violence or abuse who are within their rights to issue a written request for lock change protections.
If the landlord fails to change the lock within 24 hours, the tenant may change the lock themselves, and you will be required to reimburse them within 21 days. The law also extends to the tenant's household members, ensuring broader protection for those affected by domestic violence or abuse.
For the request, a tenant must also provide the landlord with a copy of a temporary restraining order, emergency protective order, or lawfully issued protective order.
SB 1103
The new law, SB 1103, has seen changes that now affect commercial real property as much as residential rental buildings, wherein restrictions are applied for qualified commercial tenants (microenterprises, restaurants with fewer than 10 employees, and nonprofits with fewer than 20 employees).
Applied to new tenants and existing leases commencing after January 1, 2025, the share of building operating costs must be allocated proportionately based on square footage or another method created by the landlord through supporting documentation.
The landlord-tenant law also applies to landlords who plan to raise rent. Rent increases of 10% or less require a 30-day notice, whereas more than 10% hikes need a 90-day notice. The notice must be delivered personally or by mail.
How It Affects Landlords
Many landlords are familiar with several crucial landlord-tenant laws, such as the Tenant Protection Act, Fair Housing Laws, Rent Control, affordable housing limitations, and other real estate regulations. However, the rental industry constantly changes, and the rules shift.
Failure to comply can lead to:
- Legal Risks
- Damage to Reputation
- Legal Costs
- Loss of Income
The best way to stay ahead is to consult professionals like real estate brokers or property managers, who always keep their ears to the ground.
How Professional Property Management Ensures Compliance
Whether you own commercial or residential properties, Income Property Advisors has extensive knowledge in the rental industry to assist you in property ownership. Our understanding of the necessary laws and efficient property management will help maximize the potential of your investment property.
Our company aims to keep you stress-free while ensuring legal compliance and smooth operations. You can earn passive income and find other lucrative investments while we worry about the rest.
Contact us today, and we can show you all the ways we can make your property as profitable as possible.
