New law allows tenants to report on-time rent payments to help credit score

Photo byThe HD Post

CALIFORNIA – Governor Gavin Newsom signed Assembly Bill 2747, September 19, that requires landlords to give tenants the option to report their on-time rent payments to a credit bureau agency.

“Many renters spend a majority of their income on rent and prioritize their rent payments over all other expenses each month – but their on-time rent payments are never reflected on their credit scores, even when their missed rent payments are,” said bill author Assemblymember Matt Haney’s (D-San Francisco) in a statement.

Haney goes on to say this is an unfair practice that is further pushing millions of renters into cycles of debt and poor financial health.

Tenants to pay $10 per month for credit reporting

According to the text, AB 2747 would require that for leases starting on or after April 1, 2025, landlords must offer tenants the option to report on-time rent payments when they sign the lease and at least once a year after that.

For leases active as of January 1, 2025, landlords must also offer tenants the option to report their on-time rent payments by April 1, 2025.

Landlords with 15 or fewer dwelling units and assisted housing developments are exempt from the law.

In addition, the bill would allow a landlord to charge a tenant who chooses to report on-time payments either $10 per month or the cost of providing the service, whichever is lower, unless the landlord doesn't have any costs for offering this service.

An administrative and financial burden

The California Rental Housing Association says they oppose the additional burden they believe this will impose on landlords.

“... most rental housing providers in California cannot just provide rental payment data to one of the credit bureaus. To do so would require completion of a complicated application and approval process, which most rental property owners in California would not be able to undertake particularly when more than 80% of rental property owners in California are independent, "mom and pop" owners,” said the association.

They go on to say AB 2747 would be both an administrative and financial burden for rental housing providers.

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