California Says You Can't Just Pick the "Best" Applicant Anymore
A property manager collects five applications for one unit over a weekend, runs credit and background checks on all of them, and picks whichever applicant looks strongest. That's how most offices have always done it. In California, it's also a way to end up on the wrong side of Civil Code Section 1950.6.
The statute, amended by AB 2493 and in effect since January 1, 2025, didn't just cap the screening fee. It changed what a landlord or property manager is allowed to do with the applications once the fees come in, and most back offices still haven't adjusted the workflow to match.
What the law actually requires
Under the current text of Section 1950.6, a landlord who charges a screening fee has to pick one of two paths. Either refund the fee to every applicant who isn't selected, no matter the reason, or commit to reviewing applications strictly in the order they're received against a written screening criteria, with the first applicant who meets that criteria getting the unit. Cherry-picking the "best" file out of a batch you collected fees on isn't one of the two options the law gives you (California Civil Code 1950.6).
The statute also closes a gap that used to be common: charging a screening fee when there's no actual unit available, or none that will be available within a reasonable time for that applicant. If you don't have something to rent them, you can't charge them to find out if they'd qualify.
Two clocks most offices aren't tracking
Two deadlines sit inside the statute, and neither one shows up on a typical leasing calendar. If you take the refund path, an unselected applicant's fee has to go back within seven days of selecting someone else, or 30 days from when they applied, whichever comes first. And if an applicant paid a fee and you pulled a credit report on them, you owe that applicant a copy of the report within seven days of receiving it, whether they ask for it or not (City of Berkeley Rent Board summary).
Neither clock starts when the lease is signed. Both start on an event buried in a leasing agent's inbox, usually days before anyone decides who gets the unit. A property manager running six listings at once has no practical way to track two rolling deadlines per applicant by memory or a sticky note.
Where the gap actually bites
This isn't a rule that only matters in a dispute. It's a rule that assumes your office has a process. If you're taking the order-received path, you need a record of when each application was completed, not just when it was submitted, since a partial application doesn't start the clock. If you're taking the refund path, you need something that flags the seven-day and 30-day windows the moment a unit is filled, not when someone eventually notices an old application still sitting open. Offices that mix the two approaches, reviewing out of order on some units and promising refunds on others without a system to issue them, are the ones most likely to have a gap between what they say they do and what the file shows they did.
Closing the gap without adding headcount
This is a workflow problem before it's a legal one. An agent that reads the leasing inbox can log the completed-application timestamp the moment a file is ready for review, hold a queue in received order, and flag the refund or credit-report deadline the day a unit is filled, so a person just has to approve the notice and send it instead of remembering it exists. The agent reads and proposes; a person still signs off on anything that goes out to an applicant. For a property management office juggling several listings at once, that's the difference between a rule you comply with on paper and one your files can actually back up.
If your office handles leasing, maintenance, or vendor paperwork across more than a couple of properties, see how CapeFear.ai works for property managers or read more about how the agents operate day to day.
Sources: California Civil Code Section 1950.6 (current text); City of Berkeley Rent Stabilization Board, "New Laws Affecting Rental Properties."