For a Sacramento or California rental owner, legal tenant screening means written criteria applied the same way to every applicant, a screening fee within the Civil Code 1950.6 limit, and fair housing rules that protect source of income, including housing vouchers. Legal rent collection means a clear lease, a non-cash payment option and documented, consistent follow-up.
By Gary Burmaster, California real estate salesperson and CEO of All Inclusive Realty Group, Inc. Updated October 25, 2026. General information only, not legal advice.
Screening and collections are where most small-landlord legal trouble starts, and they are connected. A careful screening process produces tenants who pay. A consistent collection process keeps small problems small. This guide is written for owners, not applicants, and covers the California rules that apply in Sacramento, Elk Grove, Roseville and everywhere else in the state.
What does California law require when screening tenants?
- Fair housing. The Fair Employment and Housing Act (Government Code 12955) prohibits discrimination based on race, color, religion, sex, gender identity, sexual orientation, marital status, national origin, ancestry, familial status, disability, source of income and other protected characteristics. Federal fair housing law applies too.
- Source of income. Since 2020, source of income includes housing vouchers and other rental assistance. Owners cannot refuse an applicant because part of the rent is paid by a housing assistance program, and income minimums apply only to the portion of rent the tenant pays.
- Alternatives to credit history for assisted applicants. For applicants with government rental assistance, California law requires owners to offer the option of other evidence of ability to pay, such as bank statements or proof of benefits, instead of relying only on credit history.
- Criminal history. California's fair housing regulations (California Code of Regulations, Title 2, section 12264 and following) limit how criminal history can be used. Blanket bans are a fair housing risk; any criminal history policy should be narrow, written and individualized.
- Screening fees. Civil Code 1950.6 caps the application screening fee, adjusted yearly for inflation, requires an itemized receipt, and requires return of any portion not spent on screening. The statute was amended for 2025 with added rules on when a fee may be charged.
What should a written tenant screening policy include?
- Income standard. State the multiple of rent you require and how income is verified, applied only to the tenant's share for assisted applicants.
- Rental history. How many years of history you check and what you verify with prior landlords.
- Credit standard. What you look at, and the alternative evidence you accept.
- Eviction history. What you consider and over what time period.
- Occupancy standard. A reasonable, consistent standard; California generally uses two persons per bedroom plus one as a guideline.
- Order of review. Process complete applications in the order received.
- Documentation. Keep the application, the screening results and the reason for the decision for every applicant.
The point of the written policy is consistency. The same file, reviewed on the same criteria, should get the same answer no matter who applies.
What must I do if I turn down an applicant based on a screening result?
If information in a consumer report played any part in turning down an applicant, or in requiring a larger deposit or a co-signer, the federal Fair Credit Reporting Act (15 U.S.C. 1681m) requires an adverse action notice. It must give the name, address and phone number of the consumer reporting agency, state that the agency did not make the decision, and explain the applicant's right to a free copy of the report within 60 days and to dispute its accuracy. California's consumer credit reporting law (Civil Code 1785.20) has similar requirements. Send it in writing and keep a copy.
What does California require for rent collection?
- Payment method. Under Civil Code 1947.3, an owner generally must allow at least one way to pay rent that is not cash and not an electronic funds transfer, such as a check or money order. Cash-only demands are generally not allowed.
- Payment instructions. Civil Code 1962 requires the lease or a written notice to state who to pay, the address for payment and the accepted forms of payment.
- Receipts. When rent is paid in cash, provide a receipt.
- Late fees. California courts generally require a late fee to be a reasonable estimate of the owner's actual cost of late payment, set in the lease. Apply it consistently.
- Nonpayment. The formal path starts with a 3-day notice to pay rent or quit under Code of Civil Procedure 1161, stating only rent actually owed, served correctly.
How do I set up rent collection that actually works?
- Offer online payment with automatic reminders, plus the non-electronic option the law requires.
- Put the due date, grace period and late-fee amount in the lease, in plain language.
- Check payments on the same day every month and reach out the first business day rent is late.
- Document every conversation and any payment arrangement in writing.
- Know in advance when a matter goes to an attorney, so nothing sits.
- Reconcile each tenant ledger monthly so the amount on any notice is exactly right.
Are there extra rules inside the City of Sacramento?
Yes. Covered units in the City of Sacramento fall under the Tenant Protection Program (City Code Chapter 5.156), which has its own rent increase and just cause rules, and the Rental Housing Inspection Program (Chapter 8.120). Statewide AB 1482 rules (Civil Code 1947.12 and 1946.2) and the one-month deposit limit in Civil Code 1950.5 apply across Sacramento County. Statewide source-of-income protection applies in every Sacramento-area city.
What are the most common screening and collection mistakes?
- Making exceptions for one applicant and not another.
- Advertising or saying anything that discourages voucher holders, families with children or people with disabilities.
- Skipping the adverse action notice.
- Charging a screening fee above the 1950.6 limit or not returning the unused portion.
- Accepting partial payments without a written understanding of what they apply to.
- Including late fees or other charges in the amount on a 3-day notice for rent.
How does AIRG screen tenants and collect rent?
AIRG screens every applicant with credit, income, eviction and reference checks under written criteria, uses California-compliant leases, and collects rent online through the tenant portal. Owners receive deposits by the 10th of each month with detailed statements, and see everything in the owner portal with statements four times a month. Notices are coordinated with counsel. If you would rather not carry screening and collections yourself, talk to us.
Book a free 30-minute call about screening and collections for your rental
Frequently asked questions
Can a California landlord refuse Section 8 or other housing vouchers?
No. Under Government Code 12955, source of income, including housing vouchers, is a protected category in California. Income requirements must be applied only to the portion of rent the tenant pays.
How much can a California landlord charge for an application fee?
Civil Code 1950.6 caps the screening fee at an amount adjusted yearly for inflation. The owner must give an itemized receipt and return any part of the fee not spent on screening.
What notice is required if I turn down an applicant because of a credit report?
The Fair Credit Reporting Act requires an adverse action notice naming the consumer reporting agency, stating it did not make the decision, and explaining the right to a free copy of the report within 60 days and to dispute it.
Can a landlord in California require rent to be paid only online?
Generally no. Civil Code 1947.3 requires owners to allow at least one form of payment that is neither cash nor electronic funds transfer, such as a check or money order.
Can I use criminal history to screen tenants in California?
Only in limited, individualized ways. California's fair housing regulations restrict how criminal history may be used, and blanket bans create fair housing risk. Get legal advice before adopting a criminal history policy.
What is the first legal step when a tenant does not pay rent?
A properly served 3-day notice to pay rent or quit under Code of Civil Procedure 1161, stating only the rent actually owed.
This article is for informational and educational purposes only and is not legal advice. We are an equal opportunity housing provider. Consult a California attorney about your screening policy.