Disclaimer: This document and any information contained herein are provided for informational purposes only and do not constitute legal advice. The author of this document is not an attorney, and the information presented should not be considered as a substitute for professional legal advice.
California landlord-tenant law continues to shift for rental property owners. With the rise of new regulations like AB2347 and a slew of others in 2025, property owners are continuing to see their business become more complex every year.
One of those laws that we'll be talking about today is AB2747. This law's major protocol is to start requiring landlords and property managers in the state to report rent payments to major credit bureaus if their tenants elect to have these payments reported.
The principal goal of this law is to help tenants improve their credit history by having timely payments of their rent included in their credit report. But what does this mean for you as a landlord and how must your practices adapt?
Requirements Under AB2747
There are 4 major requirements for AB2747, and they all revolve around providing tenants with the option of having their on-time rent payments included in their credit report. This includes:
When tenants elect for you to do so, you must regularly report rental payments they make to you to credit bureaus. This includes on-time and late or missed payments.
You must notify all of your tenants of their option to enroll in the rent reporting service, as well as how the process works and how it can affect their credit score.
Landlords must keep accurate records of all payments to ensure any rent reporting done to a credit bureau is accurate. This is crucial as it can affect a tenant's financial opportunities beyond the scope of their lease agreement.
Finally, you must adhere to any regulations put in place by the state of California dictating the frequency and format of tenant credit reports.
Under this law, landlords have a legal and financial responsibility to treat records of their tenants' payment history and rent reporting with care. Failure to do so can lead to significant legal repercussions.
When the Law Takes Effect
AB2747 will take effect on April 1, 2025, with some guidelines on how to handle new leases as well as any outstanding lease agreements.
For a lease agreement that begins on or after April 1, 2025, landlords must offer tenants rent payment credit report services when the lease begins and at least once a year after.
For any lease agreements already in place before this law takes effect, you must notify these existing tenants by April 1, 2025. The same rule of annual reminders applies here as well.
Exemptions
As with many other landlord-tenant laws in California, you could be exempt from this law.
If you are a landlord of a residential rental property with 15 or fewer rental units, you are exempt from AB2747.
However, if the landlord of one of these buildings fits one of the following categories they do have to follow the new law around tenant credit reports:
The landlord is the owner of more than one residential rental property. In these circumstances, the number of rental units in each building does not matter towards an exemption either.
The owner of the rental is a corporation, real estate investment trust, or a limited liability company where one of the members is a corporation.
AB2747 also does not apply to owners of an assisted housing development, as these types of properties have their own separate laws regarding credit reports.
Notification Guidelines for AB2747
Your baseline requirement, and potentially the only new thing you could have to do, is notify your tenants of their option to receive credit reporting. From there, their choice to opt in or not will determine further responsibilities.
For these notifications, you do have requirements for how to deliver the information and what you have to include:
As mentioned, a notification of a tenant's option of credit reports for their rent payments must be sent at the start of their lease and once a year after. These notifications may be sent via first-class mail or email.
If sent via mail, you must include a self-addressed, pre-stamped envelope for the tenant to return their response should they decide to opt in to credit reporting.
The tenant can decide to opt in at any time after receiving this information. They can also request a copy of their written election of rent payment reporting. If you receive one of these requests, you must comply.
Required Information
The tenant notification itself must include the following information:
A declaration stating that positive rental payment information reporting is optional.
A list of the consumer reporting agencies to which the positive rental payment data will be sent.
The disclosure of any applicable fee, with a maximum of $10 per month.
Clear instructions on how tenants can submit their written decision to participate in positive rental payment reporting to the landlord via first-class mail or email.
A statement explaining that tenants can choose to begin reporting of positive rental payment information at any time after the landlord's initial offer.
A statement indicating that tenants have the right to opt out of positive rental payment reporting at any time, but they will be unable to re-enroll in the program for at least six months after opting out.
Instructions on how tenants can opt out of having their positive rental payment information reported.
A signature section where tenants can sign and date their agreement to participate in positive rental payment reporting.
Benefits for Landlords
For landlords, this new law can be seen as a positive in the big picture of things. Though it creates more work, it also can improve tenant relations through your assistance in helping them build a positive credit history. This can be especially good for low-income tenants and younger tenants who are looking for ways to add to their credit reports positively.
In the big picture, it's also beneficial for landlords across the state during tenant screening. A tenant's ability to pay rent is a huge factor in their rental history, and that factoring into a credit report can help you determine a tenant's reliability more easily.
Benefits for Tenants
The major benefit for tenants, and the core purpose of this bill, is to help working-class people raise their credit score. This can be tricky for people with lower income or young people. Rent is a large part of a tenant's expenses, and having the option to report responsible rent payment history to credit bureaus is a major benefit to them.
Potential Challenges
The challenges for landlords here boil down to more work for these reports, potential fractional costs involved with the reporting, having to adopt new software or practices to properly make the reports, and an increased need for accurate accounting and financial records.
Figuring out how to get rent payment information to credit bureaus could be the biggest hurdle for you if you're not tech-savvy. A lot of this work can be done easier digitally, but that takes an ability to navigate those tools. If you're feeling unsure about how to adopt this new law, a property manager can help.
Make Credit Reporting for Rental Payments Easier
AB2747 is one of many new laws for California landlords to adapt to in 2025 and beyond; however, this one does have the potential to change your day-to-day operations the most.
However, this practice can be adapted to with the right tools and help on your side.
If you're looking for a property manager with a higher standard in operations, transparency, and responsiveness, Advantage Property Management Services is here to help.
We are a completely full-service property management firm in a business where true "full-service" can be hard to find. From tenant screening to rent collection, let us take the brunt of the work off your plate.
Contact us today for a free consultation on our packages and services.
Additional Resources:
SB 267: How California Landlords Must Adapt to Credit Report Restrictions
