September 16, 2022

California’s Assembly has passed a bill to standardize tenant background and credit checks. This bill will reduce the growing cost of applying for housing, allowing renters to reuse their background checks. It will soon reach the Governor’s desk.

Assembly Bill 2559, if signed into law, will allow renters to acquire reusable credit reports, submittable to more than one potential landlord. This flexibility would enable renters to avoid paying redundant background checks while searching for an apartment or home.

On August 23rd, the Assembly voted in favor of a Senate amendment, which passed the day before in a 31-7 vote. This amendment would make it voluntary for landlords to accept tenant background checks.

Generally, renters pay between $25 and $55 on background checks for every application they make. These checks typically cover investigations of credit and criminal records, eviction history, and verification of employment. Landlords will generally perform these checks every time a tenant applies. Currently, the rental market is the tightest it has been in 22 years. As a result, renters often have to send in a more significant number of applications to acquire a lease.

Due to the level of competition, renters have also faced increasingly large rents, with hikes of up to 18% for southern California apartments during the spring quarter. With renters typically responsible for the first month’s rent, security deposit, and application fees, renters often face steep financial burdens in acquiring housing. According to Assembly Member Christopher Ward, this disproportionately affects people of color.

Under AB 2559, screening reports would follow a standard, reusable format as often as needed within thirty days. The newly passed amendment to this bill will allow landlords to continue requiring screening reports from their chosen providers. However, landlords may receive reports directly from a third-party screening provider, ensuring the information is not tampered with by the applicant.

The bill does not significantly alter the existing parameters for tenant screening reports. Under the bill, third-party screening providers can provide the same account as needed for thirty days. This bill resembles current statutes already passed in Maryland and Washington.

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