Legal Guide to Application Fees and Refund Policies in California (2025 Update)
If you're a property owner or manager in the East Bay, navigating California's rental application fee laws is essential for compliance and maintaining positive tenant relationships. California has specific regulations designed to protect both landlords and renters during the application process, with clear guidelines on what you can charge, how you must disclose information, and when refunds are required.
As a landlord in San Ramon, Pleasanton, Dublin, or other East Bay communities, understanding these updated regulations helps you run a professional, compliant rental business while efficiently securing qualified tenants.
California’s Maximum Allowable Application Fee in 2025
California Civil Code § 1950.6 sets a maximum screening fee, adjusted annually for inflation.
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As of 2025, the maximum application fee is $64.50 per applicant.
This fee is intended to cover actual screening costs, such as credit reports, background checks, reference verification, and the administrative time needed to process applications.
Most experienced East Bay property managers set fees between $30–$45 per applicant to remain competitive while covering expenses.
Key Legal Requirements for California Rental Application Fees
California has strict rules regarding how application fees can be charged, refunded, and disclosed to applicants. These requirements are updated regularly and can be complex to interpret.
The safest approach is to consult with a qualified property manager who stays current on California landlord-tenant law and can ensure you remain compliant.
2024 vs 2025: What Changed?
Here’s a side-by-side comparison showing how the laws evolved:
| Rule / Requirement | 2024 | 2025 (Current Law) |
|---|---|---|
| Maximum Application Fee | $62.02 per applicant (CPI-adjusted) | $64.50 per applicant (CPI-adjusted Jan 2025) |
| When Fee Can Be Charged | Only if a unit is available or will be available soon. | Same rule still applies. |
| Equal Treatment | Must charge the same fee to all adult applicants; no discounts for couples. | Same rule still applies. |
| Receipts | Itemized receipts required, showing credit check, background check, admin costs, etc. | Same requirement continues. |
| Credit Report Sharing | Applicants could request a copy of their report (landlord must provide within 60 days). | Landlords must now automatically provide a copy of any credit report within 7 days, even without a request. |
| Refund of Unused Portion | Refund required if part of fee not spent (e.g., credit check never run). | Same rule continues. |
| Refunds for Non-Selected Applicants | Not mandatory under 2024 law (was only “expected soon”). | Mandatory under AB 2493: refund screening fees to non-selected applicants within 7 days of tenant selection or 30 days if no tenant selected. |
| Disclosure of Criteria | Not explicitly required. | Must provide written screening criteria to applicants when they apply. |
| Acceptable Screening Methods | No special methods outlined. | Landlords must use one of the allowed processes: ① First-qualified applicant, ② Reusable screening reports, or ③ Refund process for all non-selected applicants. |
Best Practices for East Bay Landlords
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Set Reasonable Fees: Stay competitive by charging only what covers actual costs.
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Rely on Experts: Partner with a property manager who tracks annual CPI adjustments and legislative changes.
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Document Everything: Keep receipts, reports, and communication for legal protection.
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Use Online Screening Tools: Modern platforms automate receipts, compliance, and refunds.
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Review Annually: The maximum fee changes each year—revisit your policies each January.
The Risks of Non-Compliance
Failing to follow application fee laws can lead to:
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Legal penalties and fines
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Tenant complaints or lawsuits
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Damage to your professional reputation
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Loss of qualified tenants
FAQs for 2025
Q: Can I charge different fees for different properties?
Yes, if screening costs vary by property. But all applicants for the same property must be charged the same fee.
Q: Do all adults need to apply separately?
Yes. Each adult occupant should complete a separate application and pay the fee for their individual screening.
Q: What if I overcharge by mistake?
Immediately refund the difference and document the correction to avoid complaints.
Q: Can I waive fees in hardship cases?
Yes, but document the reason clearly to avoid claims of preferential treatment.
At Stowers Real Estate, we help property owners navigate California’s complex rental laws while finding qualified tenants. Our full-service property management ensures your rental business remains compliant and profitable.
📞 Contact us today to learn more about our property management services in the East Bay.
