California Rental Application Fees: When to Refund

A California landlord cannot resolve an application fee refund request simply by pointing to a non-refundable label. Whether a fee can be retained depends on the screening process used, whether the application was considered and what the money paid for. An application that was never reviewed is not the same as one reviewed and rejected against established criteria.

This guide explains the California application screening framework introduced by AB 2493 from January 1, 2025. It concerns screening fees, not tenancy security deposits or a holding-deposit agreement. Check applicable local rules and any housing-program requirements as well.

Identify which screening process you use

The California Department of Real Estate's Spring 2025 Real Estate Bulletin explains that AB 2493 provides two routes for charging application screening fees. One considers applications in order and approves the first qualifying applicant. The other refunds everyone not selected. Do not combine the freedom of the second route with the narrower refund obligations of the first.

Decide the process before opening applications. Staff need to know whether they are managing an ordered queue or a selection process with full refunds to unsuccessful applicants. A label in your software such as pending, rejected or archived does not establish which legal process you followed.

Route one: consider completed applications in order

Under Civil Code § 1950.6(c)(2)(A), applicants receive the established screening criteria in writing with the application. Completed applications are considered in their order of receipt, and the first applicant meeting those criteria is approved. Fees are not charged unless or until the application is actually considered.

Use the screening criteria builder to organize your requirements into wording you can share. It does not check California or local legal compliance, so verify the criteria and required disclosures before using them with an application.

The law accommodates an inadvertently collected fee caused by concurrent submissions, provided an applicant whose application is not considered receives a refund within seven days. Applying the payment to another unit is an alternative at the applicant's discretion. It is not a reason to deny a refund when the applicant does not want another property.

This route does not require a full refund solely because an application, after consideration, failed the established screening criteria. Other obligations still apply, including returning unused amounts. Keep the criteria used and the work performed in the file so a decision can be explained without reconstructing it from memory.

Route two: refund applicants you do not select

Under § 1950.6(c)(2)(B), the entire screening fee is returned to every applicant not selected, regardless of the reason. The deadline is seven days after selecting an applicant or 30 days after the application was submitted, whichever happens first. Do not treat 30 days as an automatic extension after someone else has been selected.

If you choose this route, budget for the screening costs that remain yours after refunds. Track both dates for each application. An unresolved selection cannot justify retaining every payment indefinitely, and a busy office does not change the statutory clock.

The two routes are set out in California Civil Code § 1950.6. Use the current section for the complete requirements. This fee framework does not remove fair housing duties or authorize screening criteria prohibited by other laws.

When another applicant gets the home first

Consider a simple example: an office receives several applications overnight, approves an earlier applicant in the morning and never considers the later submissions. The office should identify the unconsidered applications and resolve their payments under its screening process. Marking those applicants rejected would conceal the important fact that no review occurred.

A payment provider may have charged automatically, but that does not make a blanket non-refundable policy the answer. Check the payment records, confirm what was actually ordered and arrange the required refunds. Offering another property can be useful; forcing someone to transfer their application is a different matter.

Review availability across your listing and application systems at the same time. California prohibits charging a screening fee when the landlord knows or should know there is no unit available now or within a reasonable time. Do not leave a payment link running merely because taking the advert down is someone else's job.

Document the cost, report and refund separately

California's Department of Real Estate tenant guide explains that screening charges are limited by actual permitted costs and an annually adjusted ceiling. Landlords must provide an itemized receipt and return unused amounts. If an applicant paid a screening fee and the landlord obtained their consumer credit report, a copy must be supplied within seven days of the landlord receiving it.

Do not copy a maximum fee from an old forum discussion or an outdated form. Verify the current ceiling and calculate your actual permitted costs. A maximum is not permission to charge that amount for work you never performed. Also distinguish a refund transaction from the itemized cost receipt; one does not explain the other.

• Record when the completed application arrived and whether it was considered.
• Keep the criteria provided with that application and the reason for the outcome.
• Retain the check invoice, itemized receipt and date the report was delivered.
• Record the applicable refund deadline, amount returned and payment confirmation.
• Document the applicant's choice if a permitted transfer to another unit is agreed.

Use pre-screening to clarify, not bypass, the process

A short initial form can clarify move-in timing and interest in the property before a viewing. Explain whether it is an enquiry or the formal application, what follows and when any payment would arise. Do not rename completed applications enquiries in order to reorder applicants while claiming to follow the first qualifying applicant route.

RentForms can collect initial answers and keep responses together. It does not enforce California's application order, run credit checks or manage statutory refunds. Assign those responsibilities explicitly in your leasing process so a helpful intake form does not become a substitute for the records the fee rules require.