Key Legislative Updates for California Property Owners in 2025

As 2025 approaches, California is rolling out new real estate laws that could significantly impact property owners managing multifamily housing and commercial properties. These updates focus on tenant rights, fair practices, and transparency. Staying ahead of these changes isn’t just about avoiding fines—it’s about building trust with tenants and running your properties smoothly.

Here’s a straightforward breakdown of the most important 2025 real estate law changes in California and what steps you should take to prepare.

AB 2801: New Security Deposit Rules

Starting April 1, 2025, security deposit rules are getting stricter. You’ll now need to take photos of rental units at three key times:

1. Before the tenant moves in (for leases starting after July 1, 2025).
2. After the tenant moves out but before repairs or cleaning begin.
3. After any repairs or cleaning have been completed.

These photos, along with an itemized list of any deductions, must be shared with the tenant when returning their security deposit. Only costs that are “reasonably necessary” can be deducted, and normal wear and tear cannot be charged.

How to Prepare:

• Get Organized: Set up a system for taking and storing photos of your units.
• Review Your Policies: Reassess what counts as a valid deduction to avoid tenant disputes.
• Train Your Team: Make sure property managers know how to follow these rules during inspections.
• Update Your Leases: Add details about the new photo documentation process so tenants know what to expect.

This change not only helps you comply with the law but also protects you in case of disputes with tenants over deductions.

AB 2747: Offering Rent Payment Reporting to Tenants

Starting January 1, 2025, landlords with 15 or more units will need to offer tenants the option to report their rent payments to credit bureaus. This gives tenants the chance to build or improve their credit scores by making on-time payments.

Key Details:

• You can charge a small fee for this service, but it’s capped at $10 per month or your actual costs.
• Tenants can opt in or out of the program at any time.
• You must inform new tenants about this option when they sign their lease and remind existing tenants about it at least once a year.

How to Prepare:

• Find a Reporting Service: Partner with a credit bureau or a third-party vendor to handle payment reporting.
• Update Your Lease Agreements: Include information about this new option so tenants are aware of it upfront.
• Train Your Team: Make sure staff can explain the program and its benefits to tenants.
• Communicate Effectively: Promote the benefits of rent payment reporting, such as helping tenants build their credit.

Offering rent payment reporting is not just about compliance—it’s also a way to show tenants you care about their financial well-being.

SB 611: Fee Limits and Protections for Service Members

Starting July 1, 2025, SB 611 places limits on fees landlords can charge tenants and introduces protections for service members.

Key Changes:

• No More Extra Fees for Paying Rent by Check: You can’t charge tenants extra if they choose to pay their rent with a check.
• No Fees for Notices: You can’t charge tenants for serving termination notices, like a “pay or quit” notice.
• Refunding Extra Security Deposits for Service Members: If you collect an additional security deposit from a service member due to credit concerns, you must refund that extra amount after six months as long as the tenant has no payment issues.

How to Prepare:

1. Review Your Fee Policies: Eliminate any charges that will no longer be allowed.
2. Adjust Security Deposit Procedures: Make sure your system accounts for refunding extra deposits for service members after six months.
3. Communicate Clearly: Update your lease agreements and make sure your staff knows about these changes to avoid confusion.

By following these rules, you’ll stay compliant and create a fairer process for all tenants, especially those in the military.

AB 2493: Transparent Application Fee Practices

Starting January 1, 2025, application fees will come under stricter rules to ensure fairness and transparency for prospective tenants.

Key Details:

• You can only charge an application fee if you know a unit is available or will be available soon.
• If a fee is charged, you must provide the applicant with a copy of their credit report within 7 days.
• Fees must be refunded if the application is not considered or if the unit is no longer available.

How to Prepare:

• Simplify Your Process: Use software or tools to track fees, refunds, and credit report distribution.
• Be Transparent: Clearly outline your screening process and refund policies for applicants.
• Set Up a Refund System: Make sure refunds are processed quickly to avoid legal issues.
• Train Your Staff: Ensure everyone understands how to follow these rules to create a smooth experience for applicants.

This law helps level the playing field for renters and ensures your application process is fair and compliant.

Why These Changes Matter

These 2025 real estate law changes in California emphasize transparency, fairness, and tenant protection. For property owners managing multifamily housing and commercial properties, these updates mean more responsibility—but also more opportunity to build trust and run your business more efficiently.

Staying compliant isn’t just about avoiding penalties. It’s about creating a better experience for tenants and protecting your reputation as a property owner.

How Property Owners Can Prepare

Here are some steps you can take now to get ahead of the 2025 changes:

1. Audit Your Policies and Procedures: Review your lease agreements, fee policies, and tenant communication processes to ensure they comply with the new laws.
2. Invest in Technology: Use tools to streamline documentation, rent payment tracking, and application management.
3. Train Your Team: Educate property managers and staff on the upcoming changes so they can answer tenant questions and enforce new policies effectively.
4. Communicate with Tenants: Be upfront about how these changes will benefit them, from credit-building opportunities to clearer application processes.
5. Consult Legal Experts: Work with a real estate attorney to double-check that all your policies and procedures are up to date.

The 2025 real estate law changes in California, including AB 2801, AB 2747, SB 611, and AB 2493, bring new challenges and opportunities for property owners. By preparing now, you can ensure your properties comply with the law, protect your investments, and build stronger relationships with your tenants.

At Coastline Equity, we’re here to help you navigate these changes with confidence. From updating policies to training your team, we can provide the support you need to stay ahead.

Have questions about these updates? Contact us today to learn how we can help you prepare for 2025 and beyond.