LEGISLATIVE ATTACK ON FEES CHARGED BY RESIDENTIAL LANDLORDS (May 2025)

The California Legislature continues its efforts to alter the residential landlord-tenant landscape, this time via Senate Bill No. 681 (SB681), which is currently working its way through the legislative process.  If passed in its current form, SB681 would prohibit all of the following:

• Any fee that is not specified in the rental agreement;
• A late fee equal to more than 2 percent of the monthly rent;
• A late fee when the rent is overdue by less than seven days;
• A processing fee, including a convenience fee or a check cashing fee, for the payment of rent or any other fees or deposits;
• A processing or administrative fee that “a reasonable person would deem as being ‘the cost of doing business’ ” [as amorphous as that seems];
• A fee for a tenant to own a household pet, except a pet security deposit would be allowed in an amount that is not more than 5 percent of the total amount of all other security deposits;
• A fee for a parking space; and
• A charge, as part of an application screening fee, for the reasonable value of time spent in obtaining information on the applicant, although the actual out-of-pocket screening costs could still be charged.

SB681 would also limit any fees permissibly charged to a tenant to a maximum of 5 percent of the monthly rent.

Under SB681, landlords would be liable for charging and collecting a fee from a tenant that is not authorized by law.  That liability would amount to the cost of the fee, plus 5 percent interest compounded daily from the date the fee was collected.