California Rental Application Fee Refunds: A Landlord’s Practical Guide

You list a rental property, receive six applications, and eventually approve one tenant. But what happens to the application fees collected from the other five applicants? Can you keep them to cover screening costs, or does California law require you to issue refunds?

For California landlords, the answer depends on how applications are processed, whether screening actually takes place, and which screening procedure the landlord follows. Under California Civil Code 1950.6, landlords must follow specific rules when collecting application fees, documenting screening expenses, and returning money to applicants who are not selected. Changes that took effect in January 2025 made it especially important to establish a consistent screening process before collecting fees.

Understanding California rental application fee refund requirements can help landlords avoid unnecessary disputes, maintain accurate records, and make the rental application process more efficient. Here’s what property owners and managers should know.

Key Takeaways

• Not every rejected applicant is automatically entitled to a refund. California recognizes two screening procedures, and the refund requirements depend on which one the landlord uses.
• Landlords cannot automatically charge everyone who applies. Under the first-qualified-applicant procedure, fees generally cannot be collected until an application is actually considered.
• Some refunds have strict deadlines. Under the refund-based procedure, unsuccessful applicants must receive their entire screening fee within seven days of another applicant being selected or 30 days after submitting their application, whichever occurs first.
• Unused screening fees must be returned. Landlords cannot retain amounts collected for screening expenses that were not incurred when the statutory unused-fee provision applies.
• Itemized receipts are required. California landlords must document the screening-related expenses and time associated with application fees.
• Written procedures make a difference. Consistent screening criteria, accurate application records, and a refund tracking system can help landlords manage multiple applicants.

Table of Contents

• Do California Landlords Have to Refund Rental Application Fees?
• Understanding California Civil Code 1950.6
• Two Screening Methods California Landlords Can Use
• A Step-by-Step Rental Application Fee Workflow
• What Happens to Screening Fees When You Reject an Applicant?
• Application Fee Receipts and Records Landlords Should Keep
• Common Rental Application Fee Mistakes to Avoid
• Frequently Asked Questions
• Final Thoughts

Do California Landlords Have to Refund Rental Application Fees?

California landlords do not necessarily have to refund every rental application fee simply because an applicant was rejected. However, they cannot assume that every screening fee is nonrefundable, either.

Under California Civil Code Section 1950.6, landlords may use one of two screening procedures. One prioritizes completed applications in the order received and approves the first qualified applicant. The other requires landlords to refund the entire screening fee to applicants who are not selected.

The distinction matters because two landlords processing applications for similar properties could have different refund obligations depending on the procedure they use.

When Can a Landlord Keep an Application Screening Fee?

Consider a landlord who receives three completed applications for a rental home.

The landlord uses the first-qualified-applicant procedure and reviews the applications in the order received. The first applicant does not meet the property’s established income requirements. The landlord completes the screening process, documents the results, and moves to the second applicant, who qualifies.

In this situation, the landlord generally does not have to refund the first applicant’s screening fee solely because that applicant was denied for failing to meet the established criteria.

However, the amount retained must still comply with California’s limits on authorized screening expenses.

The landlord cannot simply keep an excessive fee or an amount that must be returned under the unused-fee provisions.

When Must a Landlord Refund the Entire Application Fee?

A full refund may be required in several situations.

For example, under the first-qualified-applicant procedure, a landlord generally cannot charge someone whose application is never considered. If fees were inadvertently collected because multiple applications were submitted at the same time, the landlord must refund the unconsidered applicant within seven days.

Alternatively, a landlord using the refund-based procedure must return the entire screening fee to applicants who are not selected, regardless of why they were rejected.

This includes applicants who fail screening criteria, applicants who are otherwise qualified but not chosen, and applicants who lose the opportunity to another prospective tenant.

When Is a Partial Refund Required?

Not every screening fee refund involves returning the entire amount.

California Civil Code 1950.6(e) addresses situations where a landlord does not perform a personal reference check or does not obtain a consumer credit report. In those circumstances, any amount of the fee not used for authorized screening purposes must be returned.

For example, suppose a landlord collects $55 to cover a combination of screening services and reasonable processing time.

After reviewing the application, the landlord determines that a planned credit report is unnecessary. If only $25 in authorized screening costs and time were incurred, the remaining $30 cannot simply be retained.

The important principle is that screening fees are intended to cover permitted screening expenses, not to generate additional income.

Understanding California Civil Code 1950.6 and Screening Fee Rules

California Civil Code 1950.6 establishes the rules governing residential rental application screening fees.

The law addresses how much landlords can charge, when fees may be collected, what documentation applicants must receive, and when refunds are required.

For landlords managing several properties or processing numerous applications, understanding these requirements is particularly important.

What Changed Under AB 2493 in 2025?

Assembly Bill 2493 introduced significant changes to California’s rental application screening process beginning January 1, 2025.

Before these changes, landlords generally had more flexibility in collecting application fees from prospective tenants, provided they complied with the existing cost and disclosure requirements.

The updated law established two specific screening approaches. Landlords must either follow a process that reviews completed applications in order and approves the first qualified applicant, or use a process that refunds the entire screening fee to applicants who are not selected.

The legislation also strengthened requirements concerning the delivery of consumer credit reports.

For landlords, the practical consequence is that application fee collection should no longer be treated as an automatic step whenever someone submits an application.

Instead, landlords should determine which screening procedure they will use and organize their application process accordingly.

How Much Can California Landlords Charge for Screening Fees in 2026?

California does not allow landlords to charge an arbitrary amount simply because an applicant wants to rent a property.

Under Civil Code 1950.6(b), the application screening fee cannot exceed the actual out-of-pocket costs of obtaining information about an applicant, plus the reasonable value of the time spent obtaining that information.

These expenses may include third-party tenant screening services, consumer credit reports, reference checks, and reasonable screening-related processing time.

The statute establishes a $30 base maximum that may be adjusted annually based on increases in the Consumer Price Index, beginning January 1, 1998.

As a result, the applicable maximum in 2026 is higher than the original statutory amount. Landlords should verify the current CPI-adjusted ceiling rather than relying on outdated application forms or screening fee schedules.

Importantly, the maximum permitted fee is not automatically the amount a landlord may charge. The actual-cost limitation still applies.

Can Landlords Charge Application Fees When No Rental Is Available?

No. California Civil Code 1950.6(c)(1) prohibits landlords from charging an application screening fee when they know or should know that no rental unit is currently available or will become available within a reasonable period.

Imagine that a landlord has already approved a tenant and completed the leasing process but continues accepting paid applications for the same property.

Collecting additional screening fees under those circumstances could create compliance problems.

Landlords who advertise multiple properties should also be careful about charging fees for units that are no longer available.

A good administrative practice is to update rental listings promptly and stop collecting application fees when the relevant property is no longer available.

Two Screening Methods California Landlords Can Use

One of the most important decisions in managing California rental applications is determining how prospective tenants will be screened.

Civil Code 1950.6(c)(2) recognizes two approaches.

California Rental Application Screening Methods

Option A

First Qualified Applicant

Applications are considered in order, and the first applicant meeting the written criteria is approved.

Option B

Refund-Based Screening

The landlord refunds the entire screening fee to every applicant not selected for tenancy.

Both procedures remain subject to the statute’s other requirements, including fee limits, receipts, and applicable unused-fee refunds.

Option 1: Review Applications in Order and Approve the First Qualified Applicant

Under the first-qualified-applicant approach, landlords establish written screening criteria and provide them to prospective tenants with the rental application.

Completed applications are then considered in the order they are received, using those established criteria.

The first applicant who satisfies the requirements is approved for tenancy.

One important feature of this process is that landlords cannot charge an application screening fee unless or until the application is actually considered.

Suppose a landlord receives eight applications for a rental property.

The first applicant qualifies and is approved. Because the remaining seven applications do not need to be considered, those applicants generally should not be charged screening fees under this procedure.

If the landlord inadvertently collected fees from the remaining applicants because of simultaneous submissions, the law requires refunds within seven days.

The landlord may also offer to apply the fee toward an application for another available rental property, but that alternative is available only at the applicant’s discretion.

This procedure makes accurate application timestamps and clear screening criteria especially important.

Option 2: Collect Screening Fees and Refund Applicants Who Are Not Selected

The second procedure allows landlords to use a different application review process, provided they refund the entire screening fee to every applicant who is not selected.

Under this approach, the refund is required regardless of the reason the applicant was not chosen.

The deadline is the earlier of:

• Seven days after the landlord selects an applicant for tenancy.
• Thirty days after the unsuccessful applicant submitted the application.

For example, imagine that a landlord receives an application on March 1 and selects another tenant on March 10.

The unsuccessful applicant’s screening fee must be refunded within seven days of the selection, rather than waiting until the end of the 30-day period.

Now imagine the landlord has not selected anyone by March 31. The 30-day deadline still matters, and the landlord cannot indefinitely retain the fee while continuing to evaluate applicants.

For landlords using this procedure, refund tracking should be part of the application management process from the beginning.

Which Screening Method Is More Practical?

Both procedures are permitted under California law, but they create different administrative responsibilities.

Consideration	First Qualified Applicant	Refund-Based Screening
Application order	Completed applications considered in order	Different selection processes may be used
Approval	First applicant meeting criteria is approved	Applicant selected under the landlord’s lawful process
Fee collection	Only when an application is considered	Subject to statutory fee requirements
Rejected applicants	Fee may be retained when an applicant was considered and failed criteria, subject to other refund rules	Entire fee returned to unsuccessful applicants
Recordkeeping priority	Application timestamps and screening decisions	Refund amounts and deadlines

Landlords who receive large numbers of applications may find that reviewing applications in order reduces the number of unnecessary screening reports.

Other landlords may prefer a different selection process, provided they can manage the associated refund requirements.

Whichever procedure is used, consistency and accurate documentation are essential.

A Step-by-Step Rental Application Fee Workflow for California Landlords

Understanding the law is important, but applying it consistently is what makes the process manageable.

A written workflow can help landlords avoid collecting fees unnecessarily, overlooking refunds, or losing track of screening expenses.

Step 1: Confirm That the Rental Property Is Available

Before accepting paid applications, confirm that the property is available or expected to become available within a reasonable period.

If the property has already been rented, remove or update the listing and stop collecting screening fees.

For landlords managing multiple properties, keeping availability information current can prevent confusion between leasing staff, property managers, and applicants.

Step 2: Establish Written Screening Criteria

Prepare objective, lawful screening criteria before beginning the application process.

These may address income verification, rental history, credit-related qualifications, and other permissible screening factors.

Criteria should be consistent with applicable fair housing requirements and any relevant state or local restrictions.

Under the first-qualified-applicant procedure, the written screening criteria must be provided with the application form.

Clear criteria also make it easier to explain and document why an applicant did or did not qualify.

Step 3: Track Completed Applications

A simple spreadsheet or property management system can make a significant difference.

Record when each application is received, whether it is complete, and when it is actually considered.

This information is particularly important when using the first-qualified-applicant procedure because the order of completed applications determines the screening sequence.

For example, an applicant who begins an application on Monday but does not complete it until Wednesday should not automatically be treated as having submitted a completed application before someone who finished on Tuesday.

A consistent system helps landlords avoid disputes over application order.

Step 4: Collect Fees According to the Selected Procedure

Do not automatically collect screening fees from everyone who expresses interest in the property.

Instead, make fee collection part of the screening procedure already established.

Under the first-qualified-applicant process, the landlord generally collects the fee when the application is actually considered.

Under the refund-based process, landlords should have a method for identifying unsuccessful applicants and returning their fees within the required deadlines.

In either case, the amount collected must comply with the actual-cost and statutory maximum limitations.

Step 5: Document Screening Expenses

Keep records of screening services purchased and reasonable time spent obtaining applicant information.

For example, if a landlord purchases a credit report, verifies employment, and contacts rental references, the associated records should show which screening activities occurred.

This becomes especially useful when an applicant is rejected, withdraws, or is not fully screened.

Documenting expenses also makes it easier to determine whether a partial refund is required.

Step 6: Provide the Required Receipt and Credit Report

California landlords must provide an itemized receipt for application screening fees.

The receipt should identify the out-of-pocket expenses and time spent obtaining and processing information about the applicant.

The receipt may be delivered personally or by mail. The landlord and applicant may also agree to delivery by email.

When a consumer credit report is obtained for an applicant who paid a screening fee, the landlord must provide a copy of that report within seven days after receiving it.

This requirement applies without the applicant first having to request the report.

Step 7: Review Refund Obligations

Once an application decision is made, determine whether the applicant is entitled to a full refund, a partial refund, or no refund.

The answer depends on the screening procedure, whether the application was considered, and the screening costs incurred.

For landlords using the refund-based procedure, calculating deadlines promptly is especially important.

A calendar reminder or automated refund status field can help prevent overlooked payments.

Step 8: Close the Application File

After the application process is complete, organize the supporting documentation.

Keep the application status, screening records, receipts, refund calculations, and payment confirmations together in a secure file.

Because screening records can contain sensitive personal information, landlords should limit access and use appropriate data retention and disposal procedures.

The objective is to maintain enough documentation to explain the process without retaining unnecessary sensitive information.

What Happens to Screening Fees When You Reject an Applicant?

Rejecting an applicant does not automatically determine whether the screening fee must be refunded.

The circumstances surrounding the application are just as important as the final decision.

Scenario 1: The Applicant Does Not Meet Screening Criteria

A landlord screens an applicant and determines that the applicant does not meet the property’s established criteria.

Under the first-qualified-applicant procedure, the landlord generally is not required to refund the fee solely because the applicant failed the criteria after the application was considered.

Under the refund-based procedure, the landlord must return the entire fee because the applicant was not selected.

This is one of the clearest examples of why landlords need to understand the difference between the two approaches.

Scenario 2: Another Applicant Qualifies Before Screening Begins

Suppose five completed applications arrive, but the first applicant meets the established requirements and is approved.

Under the first-qualified-applicant procedure, the remaining applications do not need to be considered, and fees generally should not be collected from those applicants.

If fees were inadvertently collected because applications were submitted concurrently, they must be refunded within seven days.

The landlord should document which applications were considered and which were not.

Scenario 3: An Applicant Withdraws Before Screening

An applicant may decide not to proceed after submitting an application.

For example, the applicant might find another property or change their moving plans.

Whether a refund is required depends on the procedure used and the circumstances, including whether screening occurred and whether authorized expenses were incurred.

Under the first-qualified-applicant procedure, landlords should examine whether the application was actually considered and whether the unused-fee provision applies.

Under the refund-based procedure, an applicant who is not selected remains subject to the full-refund requirement.

Withdrawal should not automatically be treated as permission to retain the entire fee.

Scenario 4: The Rental Property Becomes Unavailable

Sometimes a property becomes unavailable while applications are being processed.

Perhaps the owner decides not to rent it, or a previously approved tenant completes the leasing process.

Landlords should stop collecting fees once they know no unit is available or expected within a reasonable period.

For fees already collected, the landlord should review the applicable screening procedure and determine what refunds are required.

Scenario 5: The Landlord Never Orders a Credit Report

Imagine that a landlord collects a screening fee expecting to order a credit report and verify rental references.

However, after reviewing the application, the landlord decides not to order the report.

Under Civil Code 1950.6(e), any amount not used for authorized screening purposes must be returned when the landlord does not perform a personal reference check or obtain a consumer credit report.

A landlord may have incurred some legitimate screening expenses, but that does not mean every dollar collected can automatically be retained.

Keeping an itemized record of actual costs helps make these situations easier to resolve.

Application Fee Receipts and Records California Landlords Should Keep

Good documentation is one of the most useful administrative practices a California landlord can adopt.

A well-organized rental application file helps establish when an application was received, what screening occurred, how much was charged, and whether any refund was issued.

What Must an Application Fee Receipt Include?

California Civil Code 1950.6(d) requires landlords to provide a receipt that itemizes the out-of-pocket expenses and time spent obtaining and processing information about the applicant.

A practical receipt might include the cost of a tenant screening service, a credit report, and the reasonable value of screening-related processing time.

For example:

Screening expense	Example amount
Credit and background screening service	$25.00
Rental reference verification	$10.00
Reasonable application processing time	$15.00
Total screening fee	$50.00

Illustrative example only. Charges must reflect actual authorized expenses and reasonable time, and remain within the applicable statutory limit.

Providing an itemized receipt gives applicants a clearer understanding of the fee and helps landlords maintain accurate financial records.

Providing Copies of Consumer Credit Reports

If a landlord obtains a consumer credit report for an applicant who paid a screening fee, California law requires the landlord to provide the applicant with a copy within seven days after receiving the report.

The report may be delivered personally, by mail, or by email.

Landlords using third-party screening platforms should confirm that their procedures allow them to meet this requirement.

A screening service generating a report does not, by itself, establish that the applicant received the required copy.

Creating an Application Fee Tracking Log

Landlords do not necessarily need complicated software to manage screening fee records.

A well-organized spreadsheet can provide a useful starting point.

Sample Application Fee Tracking Log

Field	Example
Applicant reference	APP-001
Completed application	March 3
Screening procedure	Refund-based
Fee collected	$50
Applicant selected	March 8
Refund required	$50
Refund deadline	March 15
Refund status	Completed

Fictional example illustrating the seven-day deadline after another applicant is selected.

For landlords managing several vacancies simultaneously, a shared tracking system can help staff members understand which applications are pending and which refunds still require attention.

It can also reduce the risk of accidentally charging the same applicant twice or losing track of a refund.

Common Rental Application Fee Mistakes California Landlords Should Avoid

Even experienced property owners can run into problems when their screening procedures are outdated or inconsistently applied.

Here are some common mistakes worth reviewing.

1. Charging Every Applicant Automatically

Collecting a fee as soon as someone submits an application may conflict with the first-qualified-applicant procedure if the application is never considered.

Landlords should align payment collection with the screening process they use.

2. Failing to Establish Written Screening Criteria

Under the first-qualified-applicant process, landlords must provide their established screening criteria in writing with the application form.

Without clear criteria, it becomes more difficult to demonstrate that applicants were considered consistently.

3. Keeping Fees for Screening Services Never Performed

A screening fee is not an opportunity to collect extra revenue.

When the statutory unused-fee provision applies, amounts not used for authorized screening purposes must be returned.

4. Missing Refund Deadlines

Landlords using the refund-based procedure must pay close attention to the seven-day and 30-day deadlines.

Waiting until the entire leasing process is finished can create problems when the 30-day deadline arrives first.

5. Treating Screening Fees Like Security Deposits

Rental application screening fees and security deposits serve different purposes.

Screening fees are governed by Civil Code 1950.6, while residential security deposits are generally governed by Civil Code 1950.5.

A landlord should not apply security deposit accounting rules to application fees or assume that the same refund timelines apply.

Frequently Asked Questions About California Rental Application Fee Refunds

Are Rental Application Fees Refundable in California?

Yes, in certain circumstances. California rental application fee refunds depend on the screening procedure used, whether the application was considered, and whether authorized screening costs were incurred. Under the refund-based procedure, applicants who are not selected must receive their entire screening fee back within the statutory deadline.

Can a California Landlord Keep an Application Fee if the Applicant Is Rejected?

Sometimes. Under the first-qualified-applicant procedure, a landlord generally does not have to refund a fee solely because an applicant was considered and rejected for failing the established screening criteria. Other fee limitations and unused-fee requirements still apply. Under the refund-based procedure, unsuccessful applicants must receive a full refund.

How Long Does a Landlord Have to Refund a Screening Fee?

Under the refund-based procedure, the deadline is seven days after another applicant is selected or 30 days after the application was submitted, whichever occurs first. Under the first-qualified-applicant procedure, an inadvertently collected fee for an unconsidered application resulting from concurrent submissions must be refunded within seven days.

Do Landlords Have to Refund Application Fees if They Never Run a Background Check?

A refund may be required. California Civil Code 1950.6(e) requires the return of amounts not used for authorized screening purposes when a personal reference check is not performed or a consumer credit report is not obtained. The amount depends on the screening activities actually performed and the applicable screening procedure.

Can California Landlords Charge Multiple Applicants for the Same Property?

Yes, but fee collection must follow one of the permitted screening procedures. Under the first-qualified-applicant process, landlords generally cannot charge applicants whose applications are never considered. Under the refund-based process, applicants who are not selected must receive their entire screening fee back.

Do California Landlords Have to Provide Application Fee Receipts?

Yes. Landlords must provide an itemized receipt identifying screening-related out-of-pocket expenses and time spent obtaining and processing applicant information. The receipt may be delivered personally or by mail, or by email if the landlord and applicant agree.

What if an Applicant Provides a Reusable Tenant Screening Report?

California Civil Code 1950.1 allows landlords to accept qualifying reusable tenant screening reports. If a landlord accepts such reports and an applicant provides one, the landlord cannot charge that applicant a fee to access the report or an application screening fee. Landlords are not generally required to accept reusable reports.

Is a Rental Application Screening Fee the Same as a Security Deposit?

No. An application screening fee covers permitted costs associated with evaluating a prospective tenant. A security deposit is generally collected in connection with a tenancy and is subject to different rules governing its amount, use, and return. The two should be accounted for separately.

Final Thoughts: Make Application Fee Refunds Part of Your Rental Process

California rental application fee refund requirements are easier to manage when landlords establish a consistent screening procedure before accepting applications.

The most important step is understanding the difference between the first-qualified-applicant procedure and the refund-based procedure. Each approach has its own requirements, and landlords should not assume that a rejected application automatically means a fee can be retained.

Accurate records, written screening criteria, itemized receipts, and a reliable refund tracking system can help property owners handle applications more efficiently.

Whether you manage a single rental home or multiple properties throughout California, reviewing your screening procedures regularly can help prevent avoidable mistakes and keep your rental operations aligned with current requirements.