Residential rental properties: fees.
This legislation aims to enhance tenant protections by making the rental costs more transparent and predictable. By eliminating unexpected fees and capping late fees, the bill addresses frequent pain points for renters regarding financial strain and potential financial exploitation by landlords. It will particularly affect tenants in large residential properties, as the bill outlines specific parameters for rental agreements and the types of fees that owners of qualifying residential properties can charge. Additionally, the bill repeals previous regulations concerning unbundled parking fees, prohibiting landlords from charging additional fees for parking spaces, which could affect the cost structure of rental housing.
Senate Bill 381, known as the Fair Rental Act of 2025, proposes significant changes to the regulation of residential rental properties in California. The bill seeks to prohibit landlords from charging various fees that are not specifically listed in the rental agreement, including processing, convenience, or check-cashing fees for rent payments. Furthermore, it establishes a cap on late fees at 2% of the monthly rental rate, with restrictions on when these fees can be applied. Specifically, late fees can only be charged if rent is overdue by more than seven days, thereby providing additional protection for tenants against excessive late payment penalties.
While the bill has the potential to improve the rental experience for tenants, it may also face pushback from landlords and property management companies who could argue that the new restrictions limit their ability to cover operational costs. The repeal of parking fees, along with the prohibition of certain charges, may complicate financial models for property owners. Critics of the bill might argue that such regulations could disincentivize investment in rental properties or lead to increased rents as landlords seek to balance their income against the imposed restrictions. Therefore, the bill's implementation could lead to a substantive dialogue on the balance between tenant protections and the rights of property owners.