Olga Wright Real Estate

Key Changes to California Tenant Laws in 2025

The housing scene in California is constantly evolving. As we approach 2025, significant changes are on the horizon for both tenants and homeowners.
The housing scene in California is constantly evolving. As we approach 2025, significant changes are on the horizon for both tenants and homeowners. The South Bay Association of Realtors has outlined new laws that will impact tenant screening, payment reporting, and the rights of small commercial tenants. Here’s a breakdown of the key regulations that will come into effect, ensuring that both tenants and housing providers are well-informed.

Your Guide to the New Tenant Regulations for 2025

Whether you are a tenant or a homeowner, it’s essential to understand your rights and responsibilities. This guide outlines key changes, including screening fees, payment reporting, and protections for small commercial tenants.

Tenant Applicant Screening Fees

One of the most notable changes involves tenant applicant screening fees. Under the new regulations:
  • Transparency in Fees: If a tenant pays a screening fee, they are entitled to receive a copy of their credit report. This ensures that tenants have access to the information that may influence their rental application.
  • Refund Policy: Housing providers must return the screening fee if the tenant is not selected, regardless of the reason. However, there is an exception: if the housing provider has written criteria provided to the tenant at the time of application, they can retain the fee if the first qualified applicant is accepted.
  • Application to Other Properties: Housing providers can apply the screening fee to other properties they manage, but they must return the fee if another tenant is selected first.
  • Availability of Units: Housing providers cannot accept a screening fee if there are no units available for rent, ensuring that tenants are not charged for services that cannot be fulfilled.

Tenant Right to Payment Reporting

Another significant change is the tenant’s right to request that their on-time rental payments be reported to national credit bureaus. This provision applies under specific conditions:
  • Eligibility: This right applies to properties with 16 or more units. However, it also extends to properties with 15 or fewer units if the housing provider owns two or more properties and is corporate or entity-owned.
  • Fee for Reporting: Housing providers can charge a fee, not exceeding $10, for this service. Tenants can opt into the program and later opt out, with the option to rejoin after six months.
  • Positive Reporting Only: The reporting will only include positive rental payment history, which can help tenants build their credit scores.

Move-In/Out Photos Requirement

Starting April 1, 2025, housing providers will be required to take move-out photos at the time of termination and after repairs. Additionally, for new tenancies commencing on or after July 1, 2025, photos of the unit must be taken at the start of the tenancy. This requirement aims to provide clear documentation of the unit’s condition, protecting both tenants and landlords.

Rights for Small Commercial Tenants

Small commercial tenants will also see enhanced rights under the new regulations:
  • Rent Increase Notice: Small commercial tenants will receive a 90-day notice for rent increases exceeding 10%.
  • Termination Notice: A 60-day notice will be required for lease terminations.
  • Language Rights: Tenants who negotiate leases in a foreign language have the right to receive a copy of the lease in that language.
  • Documentation for Expenses: Small tenants will have the right to request supporting documentation for prorated operating expenses, such as common area maintenance.

Who Qualifies as a Small Tenant?

The definition of a “small” commercial tenant includes:
  • Restaurants with fewer than 10 employees.
  • Non-profits with fewer than 20 employees.
  • Individuals with 5 or fewer employees and no access to capital.

Conclusion

These new laws set to take effect in 2025 represent a significant shift in the landscape of tenant rights and responsibilities in California. By ensuring transparency in screening processes, enhancing credit reporting opportunities, and providing additional protections for small commercial tenants, these regulations aim to create a fairer rental market. Both tenants and housing providers should familiarize themselves with these changes to navigate the evolving rental landscape effectively.

Stay informed and prepared as we move into this new era of tenant rights and responsibilities. You can always check with the local authorities or professionals like Olga Wright when you

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