Understanding California’s Latest Tenant Screening Laws for 2025

January 1, 2025 isn’t just the start of a new year for landlords in California, it’s the day AB 2493 becomes law. And with it, the way landlords handle rental applications will change in significant ways.

Gone are the days of “I’ll just pick the tenant I like most.” Now, the process will be more structured, transparent, and if not followed carefully, its risky for those who don’t comply.

So what does this mean in practice? How do landlords stay within the law while still protecting their investments? This guide breaks down the new California tenant screening rules, what’s changing in 2025, and how you can adapt without creating unnecessary headaches.

Why the State Made Changes?

California has some of the highest rents in the country, median rent hovers around $1,870, while in San Francisco it can soar past $3,500. Add to that the fact that about 28% of the entire nation’s unhoused population lives here, roughly 186,000 people and it’s easy to see why lawmakers have been pushing for fairer rental processes (Findigs).

AB 2493 is the latest in a series of housing-related laws aimed at making the rental market more accessible. The logic is straightforward: reduce bias, promote fairness, and make sure renters know exactly where they stand when applying.

The Core Changes in AB 2493

AB 2493 is more than just a tweak, it’s a shift in process.

1. First-Come, First-Served Applications

The biggest change is that landlords will now need to process applications in the order they are received. No more cherry-picking. If the first person meets your published criteria, they get the offer.

According to Compliance Prime, this means you must track the exact date and time each application arrives. It’s not enough to say, “I think they applied first.”

Practical tip: Keep a digital log with timestamps. If challenged, you’ll need proof.

2. Application Fee Restrictions

Under the new law, you can only collect application fees if:

• You’ve disclosed your screening criteria in writing upfront.
• You’re processing applications for units that are actually available.

There’s also a new refund requirement. Landlords must pick one of two refund models:

Option A

Refund fees to every applicant except the one selected for the unit.

Option B

Refund all fees to everyone if no one is selected.

As explained by Property Management Pleasanton, most landlords will lean toward Option A to avoid extended vacancies.

Practical tip: Decide on your refund model now and document it. Don’t wait until the applications start rolling in.

3. Documentation & Receipts

Per KTS Law, landlords:

• Can’t profit from screening fees.
• Must provide itemized receipts showing how the fee was used.
• Need to keep records proving compliance with their chosen refund process.

That means receipts aren’t just “nice to have” anymore, they’re a legal requirement.

4. Limits on Background Checks

California law already limits how far back landlords can look for certain offenses. AB 2493 reinforces this:

• Convictions more than 7 years old generally can’t be reported.
• Arrest-only records, sealed records, and expunged convictions are off-limits (Findigs).

This means landlords must use tenant screening services that comply with state reporting laws or risk facing complaints.

How Landlords Can Stay Compliant in 2025?

Following the new rules isn’t just about avoiding lawsuits, it’s also about creating a process that works efficiently. Here’s how:

Step 1: Publish Your Screening Criteria Clearly

Put it in writing. Post it on your listing, email it to interested applicants, and keep a dated copy for your records.

At minimum, include:

• Minimum credit score
• Income requirements (e.g., 2.5x monthly rent)
• Pet policies
• Smoking policy

Step 2: Log Applications in Order

You’ll need a reliable system to track when applications are received. Options include:

• A dedicated email inbox for applications
• An online property management portal with automatic timestamps
• A spreadsheet you update in real time

Step 3: Choose Your Refund Model in Advance

AB 2493 requires you to document your choice between Option A and Option B. Keep this on file in case of disputes.

Step 4: Update Your Screening Service

Work only with screening services that follow California’s reporting restrictions. Ask them directly how they handle sealed records and the 7-year limit.

Step 5: Keep Itemized Receipts

An example might look like this:

Expense Type	Amount
Credit Report	$14.50
Background Check	$12.00
Admin Processing	$3.50

Common Legal Pitfalls to Avoid

Even with the new rules clearly written, landlords can trip up. Here are the big ones to watch for:

• Processing Out of Order: Even if an applicant seems like a better fit, skipping someone in the queue can bring trouble.
• Charging Fees for Unavailable Units: This is now prohibited and can lead to refund disputes.
• Failing to Document Refunds: If you can’t prove you refunded fees according to your policy, you could face penalties.
• Using Non-Compliant Screening Reports: Reports showing old or restricted information can be challenged legally.

The Bigger Picture for California Landlords

AB 2493 is part of a broader push to make renting in California fairer. While it may feel like one more rule in an already regulated market, landlords who adapt quickly will likely find the process becomes second nature.

It’s about predictability. Consistency. And yes its compliance.

And given the stakes both financial and legal, it’s worth setting aside a day or two before January 1 to update your processes, notify your team or property manager, and make sure your application workflow is airtight.

Conclusion

California’s 2025 tenant screening laws are a clear signal: the state wants transparency and fairness in rental applications.

By processing applications in the order they arrive, sticking to your published criteria, choosing and documenting a refund policy, keeping itemized receipts, and using compliant screening services, you’ll be on solid legal ground.

Do it right, and you protect both your property and your peace of mind.

If you’re still unsure how these rules apply to your situation, consult an attorney familiar with California rental law or work with a professional property management company that already operates within these guidelines.