Did you know that as of April 1, 2025, California requires many landlords to offer tenants the option to have on-time rent payments reported to a credit bureau. The goal? Help tenants build credit while encouraging timely rent payments.
So, who must comply?
This applies if you own 16 or more units on one parcel, or own multiple rental properties (regardless of unit count) held in a corporation, REIT, or LLC with corporate members. I share this with you because if you are thinking of making a strategic move and putting your rentals into a corporation or an LLC, remember to think of both the good and bad consequences of such a move.
Key Landlord Requirements:
- Offer credit reporting at lease signing and annually.
- Existing tenants must receive an offer by April 1, 2025.
- The offer explains the service, credit bureau used, cost (if any), and how to opt in/out.
- You can charge up to $10 each month, or the actual cost, whichever is less.
Important Rules:
- Tenants can opt in or out anytime (re-enrollment requires a 6-month wait after opting out).
- Nonpayment of the fee can’t result in eviction or security deposit deductions.
This law benefits responsible tenants while giving landlords another tool to improve collections. But noncompliance carries risk, so make sure your lease process is updated.
If you are thinking you are tired of being a landlord, managing property managers, and want to get rid of the 3 T’s of rentals: Tenants, Toilets, and Trash! Call me as I have some great options for you.
|