Tenant Rent Payment Credit Reporting (Civil Code §1954.7) - California State Law
Key Changes:
Under Civil Code §1954.7, landlords must offer tenants the option to report on-time rent payments to credit bureaus. For leases signed between January 1, 2025, and March 31, 2025, the offer must be made by April 1, 2025. For leases signed after April 1, 2025, the offer must be made at the start of the tenancy. Tenants can be charged up to $10 per month if reporting incurs costs, but no charges are allowed if it’s free for the landlord. Tenants can opt in or out, with a six-month waiting period to rejoin after opting out. Landlords should prepare written offers, track costs, and ensure compliance with fair credit reporting laws when reporting late payments.
- Mandatory Offer to Report Credit:
For leases signed between January 1, 2025, and March 31, 2025, landlords must, by April 1, 2025, offer in writing to report tenants’ on-time rent payments to a credit bureau.
- For Leases After April 1, 2025:
Make this offer at the start of the tenancy.
- Cost Implications:
If reporting costs money, the tenant can be charged up to $10 per month. If reporting is free for the landlord, no charge may be passed on to the tenant.
- Tenant’s Choice:
Tenants can opt in or out. If they opt in and then out, they must wait six months before opting in again.
Practical Tips:
- Prepare Written Offers:
Draft a standardized letter or lease addendum offering credit reporting services.
- Track Costs:
If charging up to $10 monthly, maintain clear records of actual reporting fees.
- Consider Negative Reporting:
While the law focuses on positive credit reporting, landlords can also report late or missed payments. This practice must comply with fair credit reporting laws.
Disclaimer: The following information is provided for general guidance only and may not reflect the most recent legal changes. Laws can vary by jurisdiction, and regulations may be updated. For specific legal advice, consult with a qualified attorney familiar with Los Angeles rental laws.
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