Understanding California’s New Positive Rent Reporting Law: AB 2747
Starting April 1, 2025, California landlords of residential properties will be required to offer tenants the option to report their positive rental payment history to at least one nationwide consumer reporting agency. Assembly Bill (AB) 2747, now codified as California Civil Code § 1954.07, aims to help renters build their credit by ensuring on-time rental payments contribute positively to their credit history.
What Landlords Need to Know About AB 2747
AB 2747 applies to all landlords of residential rental units in California, with an exemption for individual (non-corporate) landlords who own a single rental building with fewer than 15 dwelling units. Otherwise, a landlord is required to offer tenants the option to have their positive rental payments reported.
For leases entered into on or after April 1, 2025, landlords must offer positive rent reporting at the time of lease signing and at least once annually. For leases signed between January 1, 2025, and March 31, 2025, landlords must extend the offer by April 1, 2025, and at least once per year thereafter.
Under Civil Code § 1954.07(d), landlords must provide tenants with a written notice that includes: (1) a statement that participation is optional; (2) a list of consumer reporting agencies where rental payment data will be reported; (3) clear instructions on how to opt in via first-class mail or email; and (4) a statement that tenants may choose to also opt out at any time. The offer can be delivered via first-class mail or email, as specified under Civil Code § 1954.07(c).
If a landlord charges a fee for positive rental payment reporting, it cannot exceed the lesser of the actual cost or $10 per month. Any applicable fees must be disclosed upfront when the offer is made to tenants.
Tenants have the right to decline participation. If a tenant opts out, they will not be eligible to re-enroll in the program for at least six months. The opt-out process must be clearly outlined in the initial offer, along with a section where tenants can sign and date their agreement if they choose to participate.
Why Compliance with AB 2747 Matters
For tenants, this law provides an opportunity to improve their credit scores by ensuring that their rent payments contribute to their credit history, just like mortgage payments do for homeowners. For landlords, this can serve as an incentive for timely payments and attract responsible renters looking to build their credit. With the implementation of AB 2747, landlords must take proactive steps to comply with notification and reporting requirements. For more information or legal guidance on AB 2747, please contact the Blake Law Firm our firm to ensure you are fully prepared for the upcoming changes and to better understand if any exemptions to the law apply.