AB 1248: Hiring of real property: fees and charges.
- Session Year: 2025-2026
- House: Assembly
- Latest Version Date: 2025-06-02
Current Status:
Failed
(2026-02-02: Died on inactive file.)
Introduced
In Committee
Awaiting First Chamber Vote
Passed First Chamber
In Committee
Awaiting Second Chamber Vote
Passed Second Chamber
Enacted
Existing law regulates the hiring of real property and imposes various requirements on landlords relating to the application for, and leasing of, residential rental property. Existing law prohibits a landlord or its agent from charging a tenant a fee for serving, posting, or otherwise delivering a notice of termination of a hiring of residential property, as specified. Existing law also prohibits a landlord or its agent from charging a tenant any fee for payment by check for rent or security deposit, as provided.
This bill would require, for new residential tenancies beginning on or after January 1, 2026, that a tenant only be obligated to pay rent and prescribed fees or charges, including, among other things, a security deposit and rent stabilization fees charged to a landlord and passed on to the tenant, as specified.The bill would require, for residential tenancies that began before January 1, 2026, that a tenant only be obligated to pay rent, the fees and charges described above, any fees or charges that were charged at the start of the tenancy, except as specified, and fees or charges for specified utilities, including the use of a ratio utility billing system, as defined, that meets specified criteria.The bill would require, for residential tenancies that began before, or beginning on or after, January 1, 2026, if a tenant is given a discount on rent or fees or charges in exchange for signing a rental agreement, that the rental agreement clearly state specified information about the amount and timing of the discount. The bill would provide that its provisions do not prevent a tenant from being charged for individually metered utilities if the rental agreement meets prescribed requirements. TheThis bill would require on or after April 1, 2026, a landlord or landlords agent who advertises, displays, or offers residential property for rent to include in any advertisement, display, or offer the price, including all required fees or charges, and a description of all available optional housing services, as defined, including the associated fees for each optional housing service.
This bill would prohibit a landlord or landlords agent from using a ratio utility billing system to allocate, demand, or collect fees or charges from a tenant, except for fees or charges for water or sewer service, as provided. The bill would prohibit the landlord from charging any fee or charge other than required fees and charges, as defined, and fees or charges for optional housing services.
This bill would also require that any payment received from, or on behalf of, a tenant be applied to rent, rental debt, and any outstanding fees in a specified order, and would prohibit late fees from being charged to a tenant whose only delinquency is attributable to nonpayment or late payment of a late fee. The bill would specify that a decrease in housing services, as defined, is an increase in rent.
The bill would provide that a landlord or landlords agent who violates these provisions is liable to a tenant in a civil action for damages, including treble damages. The bill would provide that its provisions do not prevent a landlord from recovering damages otherwise permitted by law. The bill would establish a 4-year 3-year statute of limitations to bring an action under these provisions.
The bill would provide that a waiver of its provisions is contrary to public policy and void, that the bills provisions do not preempt a local government from imposing additional requirements upon a landlord or providing greater protection to tenants, and that its void and unenforceable, and the bills provisions are severable.
Existing law regulates the hiring of real property and imposes various requirements on landlords relating to the application for, and leasing of, residential rental property. Existing law prohibits a landlord or its agent from charging a tenant a fee for serving, posting, or otherwise delivering a notice of termination of a hiring of residential property, as specified. Existing law also prohibits a landlord or its agent from charging a tenant any fee for payment by check for rent or security deposit, as provided.
This bill would require, for new residential tenancies beginning on or after January 1, 2026, that a tenant only be obligated to pay rent and prescribed fees or charges, including, among other things, a security deposit and rent stabilization fees charged to a landlord and passed on to the tenant, as specified.
The bill would require, for residential tenancies that began before January 1, 2026, that a tenant only be obligated to pay rent, the fees and charges described above, any fees or charges that were charged at the start of the tenancy, except as specified, and fees or charges for specified utilities, including the use of a ratio utility billing system, as defined, that meets specified criteria.
The bill would require, for residential tenancies that began before, or beginning on or after, January 1, 2026, if a tenant is given a discount on rent or fees or charges in exchange for signing a rental agreement, that the rental agreement clearly state specified information about the amount and timing of the discount. The bill would provide that its provisions do not prevent a tenant from being charged for individually metered utilities if the rental agreement meets prescribed requirements. The bill would also require that any payment received from, or on behalf of, a tenant be applied to rent, rental debt, and any outstanding fees in a specified order, and would prohibit late fees from being charged to a tenant whose only delinquency is attributable to nonpayment or late payment of a late fee. The bill would specify that a decrease in housing services, as defined, is an increase in rent.
The bill would provide that a landlord or landlords agent who violates these provisions is liable to a tenant in a civil action for damages, including treble damages. The bill would provide that its provisions do not prevent a landlord from recovering damages otherwise permitted by law. The bill would establish a 4-year statute of limitations to bring an action under these provisions.
The bill would provide that a waiver of its provisions is contrary to public policy and void, that the bills provisions do not preempt a local government from imposing additional requirements upon a landlord or providing greater protection to tenants, and that its provisions are severable.
Existing law provides that the hiring of residential real property or commercial real property by a qualified commercial tenant for a term not specified by the parties, is deemed to be renewed at the end of the term implied by law unless one of the parties gives written notice to the other of the partys intention to terminate the tenancy, as specified.Existing law defines a qualified commercial tenant for these purposes to mean a tenant of commercial real property that is a microenterprise restaurant with fewer than 10 employees, or a nonprofit organization with fewer than 20 employees, that has provided the landlord a specified written notice that the tenant is a qualified commercial tenant and a self-attestation as to the number of individuals it employs. This bill would increase the maximum number of individuals employed by a nonprofit organization for these purposes to fewer than 25.By expanding the scope of the crime of perjury, this bill would impose a state-mandated local program.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that no reimbursement is required by this act for a specified reason.Existing law provides that the hiring of residential real property or commercial real property by a qualified commercial tenant for a term not specified by the parties, is deemed to be renewed at the end of the term implied by law unless one of the parties gives written notice to the other of the partys intention to terminate the tenancy, as specified.
Existing law defines a qualified commercial tenant for these purposes to mean a tenant of commercial real property that is a microenterprise restaurant with fewer than 10 employees, or a nonprofit organization with fewer than 20 employees, that has provided the landlord a specified written notice that the tenant is a qualified commercial tenant and a self-attestation as to the number of individuals it employs.
This bill would increase the maximum number of individuals employed by a nonprofit organization for these purposes to fewer than 25.
By expanding the scope of the crime of perjury, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
The Legislature finds and declares all of the following:
(a)It is essential that prospective and current tenants have a clear and complete understanding of the total monthly cost of renting a home. Traditionally, this has been accomplished by landlords advertising and charging a single amount for rent that covers all housing services provided to the tenant.
(b)Instead of advertising and charging tenants a single amount for rent, some landlords break down the amount that tenants pay into smaller amounts, such as by charging an amount labeled rent plus various fees. Tenants may be surprised to be charged required fees on top of their rent, including convenience fees to pay rent online, broker fees, utility connectivity fees, and even so-called January fees charged for no clear reason at the beginning of a new calendar year. Sometimes these fees purport to cover services that the law requires landlords to provide, such as pest control fees despite the landlords obligation to maintain the rental unit pest-free.
(c)By enhancing transparency and predictability in rental housing costs, this act seeks to promote housing stability, foster trust between tenants and landlords, and create a level playing field among landlords.
SEC. 2.Section 1950.2 is added to the Civil Code, to read:1950.2.(a)For the purposes of this section, the following definitions apply:
(1)Housing services means all services provided by or on behalf of a landlord related or connected to the use, occupancy, or enjoyment of residential real property, or that are required to be provided by law or are a condition of tenancy in the residential real property, including, but not limited to, trash collection, electrical service, water service, sewer service, gas service, other utilities, elevator service, storage, parking, facilities, access to common areas, repairs, maintenance, heat, hot water, pest control, security, or any other benefits, privileges, or services, whether express or implied.
(2)Optional housing service means a service including, but not limited to, a parking space, event space, storage space, use of a laundry machine, or similar, that is all of the following:
(A)Not required to be provided by a residential landlord to a tenant by local, state, or other applicable law.
(B)Not a condition of the tenancy, required by the landlord or landlords agent as subject to a required fee or charge, or offered as one of two or more options when selecting at least one of the options is required.
(C)Freely selectable or rejectable by the tenant on an opt-in basis, with no adverse action or impact to the tenant.
(D)Cancelable by the tenant with no more than 30 days notice to the landlord, with no adverse action or impact to the tenant.
(E)Reasonably available to the tenant from a source other than the landlord or landlords agent.
(F)Not within or physically connected to the tenants dwelling unit.
(G)Not unilaterally cancelable by the landlord, unless the tenant has failed to pay the fee for 30 days past the due date or the landlord is no longer offering the service to all tenants.
(3)Ratio utility billing system means the allocation of utilities including, but not limited to, trash, water, water heating, sewer, natural gas, liquid propane gas, electricity, or other utility costs to tenants through any billing method other than individual meters, submeters, or a flat fee.
(4)Required fee or charge means a fee or charge that is required by the landlord or landlords agent to be paid to, or for the benefit of, the landlord or landlords agent for use or occupancy of the residential real property, for housing services, or as a condition of the tenancy.
(b)On or after April 1, 2026, a landlord or landlords agent who advertises, displays, or offers residential property for rent shall include in any advertisement, display, or offer both of the following:
(1)The price required to be paid to or for the benefit of the landlord or landlords agent for use or occupancy of the residential real property and housing services, or as a condition of the tenancy, including all required fees or charges, except as provided in subdivision (c).
(A)The price shall be clear and conspicuous, and significantly more prominent in type size, color, and placement than the amount of any fee or charge included in the price.
(B)For any dwelling unit where submeters are used to charge a tenant separately for water service pursuant to Chapter 2.5 (commencing with Section 1954.201), the price shall include the fee or charge for water service by providing the estimate of the monthly bill for water service described in subdivision (b) of Section 1954.204.
(2)(A)A description of all available optional housing services and associated fees for each optional housing service.
(B)The landlord or landlords agent shall not condition an offer to rent, a tenancy, or the terms of a tenancy on whether a tenant chooses any optional housing services or on whether the tenant later cancels any optional housing services.
(c)A landlord or landlords agent may exclude both of the following fees or charges from the advertised, displayed, or offered price:
(1)The amount of any refundable security or application screening fee, as provided in Sections 1950.5 and 1950.6, if it is clearly and conspicuously disclosed in all advertisements, displays, and offers and in the rental agreement.
(2)Fees or charges for individually metered utilities that a tenant pays directly to a third-party utility provider pursuant to a contractual agreement between the tenant and the utility provider.
(d)This section does not prevent a landlord from recovering a charge for lost key replacement or damages to the property caused by the tenant or the tenants guests or as otherwise permitted by law.
(e)A landlord or landlords agent shall not use a ratio utility billing system to allocate, demand, or collect fees or charges, except for fees or charges for water or sewer service, as provided in subdivision (f).
(f)A landlord or landlords agent shall not allocate, demand, or collect from a tenant fees or charges for water or sewer service through the use of a ratio utility billing system, unless all of the following requirements are met:
(1)The fee or charge for water or sewer usage consists only of fees or charges assessed for the property by the water or sewer provider.
(2)If common areas, landscape irrigation systems, or other areas under the control of the landlord are served by a master water meter that also provides water to dwelling units covered by this subdivision, the landlord or landlords agent shall deduct the greater of the following amounts before water or sewer costs are divided among the dwelling units:
(A)Twenty percent of the total water or sewer bills.
(B)The actual cost of water or sewer usage for all common areas, landscaping, and all other areas under the control of the landlord, if all common areas, landscaping, and all other areas under the control of the landlord are separately metered or submetered for water.
(C)The actual cost of water or sewer usage for all landscaping plus 10 percent of the total water or sewer bills, if all water used for landscaping is separately metered or submetered and water used for other common areas or areas under the control of the landlord are not separately metered or submetered.
(3)For new tenancies beginning on or after April 1, 2026:
(A)The advertised, displayed, or offered price for a dwelling unit described in subdivision (b) includes the highest monthly cost of water or sewer charges over the prior 12 months or prior calendar year for the unit or for a unit of similar size on the property.
(B)Before accepting any application fee, security deposit, or other payment from a prospective tenant, the landlord or landlords agent does both of the following:
(i)Provides the prospective tenant a paper or electronic copy of the two most recent water or sewer bills for the property and identifies the amounts the prospective tenant would have paid for the dwelling units share of those bills, except in the case of new construction if prior bills do not exist.
(ii)Provides the prospective tenant a paper or electronic statement that describes all of the following:
(I)The percentages of the water or sewer costs that are allocated to tenants and to the landlord, as described in paragraph (2) of subdivision (f).
(II)The method or formula used to allocate water or sewer costs among tenants.
(III)A statement that tenants may inspect any documents or information as provided in paragraphs (4) and (5).
(C)The rental agreement clearly and conspicuously discloses the information described in subparagraphs (A) and (B).
(4)Upon written request by a tenant or a tenants representative, the landlord permits a tenant or a tenants representative to inspect all water or sewer bills, the method or formula used to allocate water or sewer costs to dwelling units, and the percentages of the water or sewer costs that are allocated to dwelling units and to the landlord. The landlord is only required to comply with four requests per dwelling unit per 12-month period.
(5)Upon written request by a tenant or a tenants representative, the landlord provides the total number of dwelling units billed each month and the number of bedrooms in each unit.
(6)During the course of a tenancy, the landlord or landlords agent does not alter the percentage of water or sewer costs that are allocated between the landlord and the tenants or the method or formula used to allocate water or sewer costs to the tenant in a way that increases the tenants share of those costs. A change in the number of occupants of a tenants unit may result in a different cost to the tenant using a consistent formula.
(7)The fee or charge to any tenant is not greater as a result of vacancy in a dwelling unit on the property or the presence of other tenants at the property who do not pay for water or sewer pursuant to this subdivision.
(8)The use of a ratio utility billing system is not prohibited by local law.
(9)The dwelling unit does not use submeters to charge a tenant separately for water service pursuant to Chapter 2.5 (commencing with Section 1954.201).
(g)For dwelling units and tenancies subject to the gross rental rate increase limits of Section 1947.12, any new required fee or charge, new fee or charge for optional housing services that were previously provided in exchange for the tenants payment of rent, and any increases to a required or optional fee or charge shall, when combined with any other increases in the gross rental rate, comply with subdivision (a) of Section 1947.12. This subdivision is declarative of existing law.
(1)A landlord or landlords agent may charge a new required fee or charge for water if they are converting from a ratio utility billing system to the use of water submeters.
(2)A decrease in housing services is an increase in the gross rental rate. This paragraph is declarative of existing law.
(h)A landlord or landlords agent who operates a ratio utility billing system in compliance with this section does not violate subdivision (a) of Section 1947.12, if water or sewer fees or charges increase based on actual water or sewer usage or rates, so long as the landlord or landlords agent has complied with Section 1101.5.
(i)A landlord or landlords agent shall not charge any fee or charge, except for required fees and charges and fees and charges for optional housing services.
(j)A landlord or landlords agent shall not use a tenants failure to pay for an optional housing service as a basis for termination of tenancy.
(k)(1)Notwithstanding Section 1479, a payment received from, or on behalf of, a tenant shall be applied first to the current months rent, then to any outstanding rental debt that is less than 12 months past due, then to any other obligation due under the rental agreement other than rent, then to any other obligation between the two parties.
(2)A late fee shall not be charged or collected for nonpayment or late payment of a previously charged late fee. This paragraph does not authorize the collection of late fees where they are not otherwise permitted by law.
(3)(A)For the purposes of this subdivision, rent means periodic payment and all nonmonetary consideration to or for the benefit of the landlord in exchange for the use or occupancy of a dwelling unit and premises and the provision of housing services under a rental contract or agreement, oral, written, or implied.
(B)For the purposes of this subdivision, rent does not include optional housing services.
(l)This section does not enlarge or diminish any ability of local government to impose or enforce any local laws or requirements upon a landlord or a landlords agent, that provide greater protection to tenants.
(m)A landlord or landlords agent who violates this section shall be liable to a tenant in a civil action for all of the following:
(1)Actual damages, but in no case shall the total award of actual damages be less than one thousand dollars ($1,000).
(2)Injunctive and declaratory relief.
(3)Reasonable attorneys fees and costs.
(4)Upon a showing that the landlord or landlords agent has acted willfully or with oppression, fraud, or malice, or with reckless or grossly negligent disregard of this section, three times the actual damages. An award may also be entered for punitive damages for the benefit of the tenant.
(n)An action to enforce any cause of action pursuant to this section shall be commenced within three years after the cause of action accrued.
(o)The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
(p)Any waiver of the rights under this section shall be deemed contrary to public policy and void and unenforceable. This section shall be construed liberally to effect its purpose of protecting the public.
SECTION 1.Section 1950.2 is added to the Civil Code, to read:1950.2.(a)For the purposes of this section, the following definitions apply:(1)Housing services means all services provided by the landlord related or connected to the use or occupancy of residential real property, including, but not limited to, trash collection, electrical service, water service, sewer service, gas service, other utilities, elevator service, storage, facilities, laundry, repairs, maintenance, heat, hot water, pest control, or any other benefits, privileges, or services, whether express or implied.(2)Ratio utility billing system means the allocation of trash, water, sewer, natural gas, liquid propane gas, electricity, or other utility costs to tenants through any billing method other than individual meters as described in subdivision (d).(3)Rent means a single periodic payment and all nonmonetary consideration to or for the benefit of the landlord in exchange for the use or occupancy of a rental unit and premises and the provision of housing services under a rental contract or agreement, oral, written, or implied. Rent as defined in this section means gross rental rate as that term is used in Section 1947.12.(b)For any new residential tenancies that begin on or after January 1, 2026, a tenant shall only be obligated to pay rent and the following fees or charges:(1)The amount of any security deposit as provided in Section 1950.5, if clearly and conspicuously disclosed in all advertisements.(2)Rent stabilization fees or other similar fees or charges, other than taxes, imposed by a government, that are directly related to the tenants dwelling unit, to the extent a passthrough of those fees or charges is otherwise expressly authorized by statute or ordinance.(A)Rent stabilization fees or other similar fees or charges shall not exceed the actual, documented fees or charges imposed on the landlord. A landlord shall provide documentation of these fees or charges to the tenant on an annual basis.(B)Rent stabilization fees or other similar fees or charges shall not include a fee or charge for a service that is charged by a third party.(3)Fees or charges that the tenant pays directly to the landlord or landlords agent for submetered water in compliance with Chapter 2.5 (commencing with Section 1954.201).(4)Fees or charges for a tenants late payments to the extent otherwise permitted by law.(c)For any residential tenancies that began before January 1, 2026, a tenant shall only be obligated to pay rent and the following fees or charges:(1)Fees or charges that were charged at the start of the tenancy, pursuant to the rental agreement, so long as those fees or charges do not increase over the course of the tenancy.(2)Rent stabilization fees or other similar fees or charges, other than taxes, imposed by a government that are directly related to the tenants dwelling unit, to the extent a passthrough of those fees is otherwise expressly authorized by statute or ordinance.(A)Rent stabilization fees or other similar fees or charges shall not exceed the actual, documented fees or charges imposed on the landlord. The landlord shall provide documentation of these fees or charges to the tenant for inspection upon request.(B)Rent stabilization fees or other similar fees or charges shall not include a fee or charge for a service that is charged by a third party.(3)Fees or charges that the tenant pays directly to the landlord or landlords agent for submetered water in compliance with Chapter 2.5 (commencing with Section 1954.201).(4)Fees or charges for a tenants late payments to the extent otherwise permitted by law.(5)Fees or charges paid to the landlord or the landlords agent or billing company for the actual cost of utilities, limited to trash, water, sewer, natural gas, liquid propane gas, and electricity, including the use of any ratio utility billing system, if all of the following apply:(A)At the start of the tenancy, pursuant to the rental agreement, the landlord or their agent charged or collected such fees or charges from that tenant.(B)Neither the percentage of the utility costs that are allocated between the landlord and the tenants, nor the method or formula used to allocate utility costs among tenants, are altered in a way that increases the tenants share of those costs.(C)The tenants utility cost is not increased as a result of vacancy in the property or the presence of other tenants at the property who do not pay for utilities pursuant to this paragraph.(D)On a monthly basis, the landlord or landlords agent provides notice to all tenants of the applicable utility rates, actual usage, and amounts billed to the property for actual usage, as well as a clear description of the method and unit-level data used to calculate fees or charges, sufficient for each tenant to determine the accuracy of that tenants utility cost.(E)The actual amount of fees or charges collected for utilities over the course of one year does not exceed the actual cost of utility usage for that year.(F)Such fees or charges do not include a fee or charge for a service that is charged by a third party.(d)For residential tenancies that began before, or beginning on or after, January 1, 2026, if a tenant is given a discount on rent or fees or charges in exchange for signing a rental agreement, the rental agreement shall clearly state on the first page when the discount will end, the total amount of rent and fees or charges that the tenant will be obligated to pay when the discount ends, and the date on which the tenant will first be obligated to pay that amount. The landlord or landlords agent shall also provide 60 days notice before the date that the discount will end.(e)This section does not prevent a tenant from being required to pay individually metered utilities if the rental agreement clearly and conspicuously states that the tenant is responsible for paying utility charges, the tenant pays directly to a third-party utility provider pursuant to a contractual agreement between the household and the utility provider, or to the landlord in accordance with paragraph (3) of subdivision (b), and the tenant is required to pay for utilities only for tenants unit and not for common areas or other units.(f)Notwithstanding Section 1479, a payment received from, or on behalf of, a tenant shall be applied first to the current months rent, then to any outstanding rental debt that is less than 12 months past due, then to other fees or charges due under the rental agreement other than rent, then to any other obligation between the two parties. No late fee shall be charged or collected if the only delinquency is attributable to nonpayment or late payment of a previously charged late fee. This section does not authorize the collection of late fees where they are not otherwise permitted by law.(g)A decrease in housing services is an increase in the rent.(h)(1)A landlord or their agent who violates this section shall be liable to a tenant in a civil action for all of the following:(A)Actual damages, but in no case shall the total award of actual damages be less than one thousand dollars ($1,000).(B)Injunctive and declaratory relief.(C)Reasonable attorneys fees and costs.(2)Upon a showing that the landlord or their agent has acted willfully or with oppression, fraud, or malice, or with reckless or grossly negligent disregard of this section, three times the actual damages. An award may also be entered for punitive damages for the benefit of the tenant.(i)An action to enforce any cause of action pursuant to this section shall be commenced within four years after the cause of action accrued.(j)(1)This section does not prevent a landlord from recovering damages to the extent otherwise permitted by law.(2)This section does not preempt a local government from imposing or enforcing any additional requirements upon a landlord or a landlords agent that provide greater protection to tenants.(k)The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.(l)Any waiver of the rights under this section shall be deemed contrary to public policy and void.(a)For the purposes of this section, the following definitions apply:
(1)Housing services means all services provided by the landlord related or connected to the use or occupancy of residential real property, including, but not limited to, trash collection, electrical service, water service, sewer service, gas service, other utilities, elevator service, storage, facilities, laundry, repairs, maintenance, heat, hot water, pest control, or any other benefits, privileges, or services, whether express or implied.
(2)Ratio utility billing system means the allocation of trash, water, sewer, natural gas, liquid propane gas, electricity, or other utility costs to tenants through any billing method other than individual meters as described in subdivision (d).
(3)Rent means a single periodic payment and all nonmonetary consideration to or for the benefit of the landlord in exchange for the use or occupancy of a rental unit and premises and the provision of housing services under a rental contract or agreement, oral, written, or implied. Rent as defined in this section means gross rental rate as that term is used in Section 1947.12.
(b)For any new residential tenancies that begin on or after January 1, 2026, a tenant shall only be obligated to pay rent and the following fees or charges:
(1)The amount of any security deposit as provided in Section 1950.5, if clearly and conspicuously disclosed in all advertisements.
(2)Rent stabilization fees or other similar fees or charges, other than taxes, imposed by a government, that are directly related to the tenants dwelling unit, to the extent a passthrough of those fees or charges is otherwise expressly authorized by statute or ordinance.
(A)Rent stabilization fees or other similar fees or charges shall not exceed the actual, documented fees or charges imposed on the landlord. A landlord shall provide documentation of these fees or charges to the tenant on an annual basis.
(B)Rent stabilization fees or other similar fees or charges shall not include a fee or charge for a service that is charged by a third party.
(3)Fees or charges that the tenant pays directly to the landlord or landlords agent for submetered water in compliance with Chapter 2.5 (commencing with Section 1954.201).
(4)Fees or charges for a tenants late payments to the extent otherwise permitted by law.
(c)For any residential tenancies that began before January 1, 2026, a tenant shall only be obligated to pay rent and the following fees or charges:
(1)Fees or charges that were charged at the start of the tenancy, pursuant to the rental agreement, so long as those fees or charges do not increase over the course of the tenancy.
(2)Rent stabilization fees or other similar fees or charges, other than taxes, imposed by a government that are directly related to the tenants dwelling unit, to the extent a passthrough of those fees is otherwise expressly authorized by statute or ordinance.
(A)Rent stabilization fees or other similar fees or charges shall not exceed the actual, documented fees or charges imposed on the landlord. The landlord shall provide documentation of these fees or charges to the tenant for inspection upon request.
(B)Rent stabilization fees or other similar fees or charges shall not include a fee or charge for a service that is charged by a third party.
(3)Fees or charges that the tenant pays directly to the landlord or landlords agent for submetered water in compliance with Chapter 2.5 (commencing with Section 1954.201).
(4)Fees or charges for a tenants late payments to the extent otherwise permitted by law.
(5)Fees or charges paid to the landlord or the landlords agent or billing company for the actual cost of utilities, limited to trash, water, sewer, natural gas, liquid propane gas, and electricity, including the use of any ratio utility billing system, if all of the following apply:
(A)At the start of the tenancy, pursuant to the rental agreement, the landlord or their agent charged or collected such fees or charges from that tenant.
(B)Neither the percentage of the utility costs that are allocated between the landlord and the tenants, nor the method or formula used to allocate utility costs among tenants, are altered in a way that increases the tenants share of those costs.
(C)The tenants utility cost is not increased as a result of vacancy in the property or the presence of other tenants at the property who do not pay for utilities pursuant to this paragraph.
(D)On a monthly basis, the landlord or landlords agent provides notice to all tenants of the applicable utility rates, actual usage, and amounts billed to the property for actual usage, as well as a clear description of the method and unit-level data used to calculate fees or charges, sufficient for each tenant to determine the accuracy of that tenants utility cost.
(E)The actual amount of fees or charges collected for utilities over the course of one year does not exceed the actual cost of utility usage for that year.
(F)Such fees or charges do not include a fee or charge for a service that is charged by a third party.
(d)For residential tenancies that began before, or beginning on or after, January 1, 2026, if a tenant is given a discount on rent or fees or charges in exchange for signing a rental agreement, the rental agreement shall clearly state on the first page when the discount will end, the total amount of rent and fees or charges that the tenant will be obligated to pay when the discount ends, and the date on which the tenant will first be obligated to pay that amount. The landlord or landlords agent shall also provide 60 days notice before the date that the discount will end.
(e)This section does not prevent a tenant from being required to pay individually metered utilities if the rental agreement clearly and conspicuously states that the tenant is responsible for paying utility charges, the tenant pays directly to a third-party utility provider pursuant to a contractual agreement between the household and the utility provider, or to the landlord in accordance with paragraph (3) of subdivision (b), and the tenant is required to pay for utilities only for tenants unit and not for common areas or other units.
(f)Notwithstanding Section 1479, a payment received from, or on behalf of, a tenant shall be applied first to the current months rent, then to any outstanding rental debt that is less than 12 months past due, then to other fees or charges due under the rental agreement other than rent, then to any other obligation between the two parties. No late fee shall be charged or collected if the only delinquency is attributable to nonpayment or late payment of a previously charged late fee. This section does not authorize the collection of late fees where they are not otherwise permitted by law.
(g)A decrease in housing services is an increase in the rent.
(h)(1)A landlord or their agent who violates this section shall be liable to a tenant in a civil action for all of the following:
(A)Actual damages, but in no case shall the total award of actual damages be less than one thousand dollars ($1,000).
(B)Injunctive and declaratory relief.
(C)Reasonable attorneys fees and costs.
(2)Upon a showing that the landlord or their agent has acted willfully or with oppression, fraud, or malice, or with reckless or grossly negligent disregard of this section, three times the actual damages. An award may also be entered for punitive damages for the benefit of the tenant.
(i)An action to enforce any cause of action pursuant to this section shall be commenced within four years after the cause of action accrued.
(j)(1)This section does not prevent a landlord from recovering damages to the extent otherwise permitted by law.
(2)This section does not preempt a local government from imposing or enforcing any additional requirements upon a landlord or a landlords agent that provide greater protection to tenants.
(k)The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
(l)Any waiver of the rights under this section shall be deemed contrary to public policy and void.
SECTION 1.Section 1946.1 of the Civil Code is amended to read:1946.1.(a)Notwithstanding Section 1946, a hiring of residential real property or commercial real property by a qualified commercial tenant for a term not specified by the parties, is deemed to be renewed as stated in Section 1945, at the end of the term implied by law unless one of the parties gives written notice to the other of the partys intention to terminate the tenancy, as provided in this section.(b)An owner of a residential dwelling or commercial real property hired by a qualified commercial tenant giving notice pursuant to this section shall give notice at least 60 days prior to the proposed date of termination. A tenant giving notice pursuant to this section shall give notice for a period at least as long as the term of the periodic tenancy prior to the proposed date of termination.(c)Notwithstanding subdivision (b), an owner of a residential dwelling or commercial real property hired by a qualified commercial tenant giving notice pursuant to this section shall give notice at least 30 days prior to the proposed date of termination if a tenant or resident has resided in the dwelling or occupied the property for less than one year.(d)Notwithstanding subdivision (b), an owner of a residential dwelling giving notice pursuant to this section shall give notice at least 30 days prior to the proposed date of termination if all of the following apply:(1)The dwelling or unit is alienable separate from the title to any other dwelling unit.(2)The owner has contracted to sell the dwelling or unit to a bona fide purchaser for value, and has established an escrow with a title insurer or an underwritten title company, as defined in Sections 12340.4 and 12340.5 of the Insurance Code, respectively, a licensed escrow agent, as defined in Sections 17004 and 17200 of the Financial Code, or a licensed real estate broker, as defined in Section 10131 of the Business and Professions Code.(3)The purchaser is a natural person or persons.(4)The notice is given no more than 120 days after the escrow has been established.(5)Notice was not previously given to the tenant pursuant to this section.(6)The purchaser in good faith intends to reside in the property for at least one full year after the termination of the tenancy.(e)After an owner has given notice of the owners intention to terminate the tenancy pursuant to this section, a tenant may also give notice of the tenants intention to terminate the tenancy pursuant to this section, provided that the tenants notice is for a period at least as long as the term of the periodic tenancy and the proposed date of termination occurs before the owners proposed date of termination.(f)The notices required by this section shall be given in the manner prescribed in Section 1162 of the Code of Civil Procedure or by sending a copy by certified or registered mail.(g)This section may not be construed to affect the authority of a public entity that otherwise exists to regulate or monitor the basis for eviction.(h)A notice given by an owner pursuant to this section shall contain, in substantially the same form, the following:State law permits former tenants to reclaim abandoned personal property left at the former address of the tenant, subject to certain conditions. You may or may not be able to reclaim property without incurring additional costs, depending on the cost of storing the property and the length of time before it is reclaimed. In general, these costs will be lower the sooner you contact your former landlord after being notified that property belonging to you was left behind after you moved out.(i)A landlord or its agent shall not charge a tenant a fee for serving, posting, or otherwise delivering any notice, as described in this section.(j)A landlord of a commercial real property shall include in the notice required by this section information on the provisions of this section.(k)For the purposes of this section, the following definitions apply:(1)Commercial real property means all real property in this state, except dwelling units subject to this chapter, mobilehomes as defined in Section 798.3, and recreational vehicles as defined in Section 799.29.(2)Microenterprise has the same meaning as that term is defined in subdivision (a) of Section 18000 of the Business and Professions Code.(3)Nonprofit organization means any private, nonprofit organization that qualifies under Section 501(c)(3) of the United States Internal Revenue Code of 1986.(4)Qualified commercial tenant means a tenant of commercial real property that meets both of the following requirements:(A)The tenant is a microenterprise, a restaurant with fewer than 10 employees, or a nonprofit organization with fewer than 25 employees.(B)(i)Subject to clause (ii), the tenant has provided the landlord, within the previous 12 months, a written notice that the tenant is a qualified commercial tenant and a self-attestation regarding the number of employees, at such time the protections under this section come into place.(ii)Unless the tenancy is from week to week, month to month, or other period less than a month, the tenant provided the notice and self-attestation described in clause (i) before or upon execution of the lease, and annually thereafter, at such time the protections under this section come into place.SEC. 2.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.(a)Notwithstanding Section 1946, a hiring of residential real property or commercial real property by a qualified commercial tenant for a term not specified by the parties, is deemed to be renewed as stated in Section 1945, at the end of the term implied by law unless one of the parties gives written notice to the other of the partys intention to terminate the tenancy, as provided in this section.
(b)An owner of a residential dwelling or commercial real property hired by a qualified commercial tenant giving notice pursuant to this section shall give notice at least 60 days prior to the proposed date of termination. A tenant giving notice pursuant to this section shall give notice for a period at least as long as the term of the periodic tenancy prior to the proposed date of termination.
(c)Notwithstanding subdivision (b), an owner of a residential dwelling or commercial real property hired by a qualified commercial tenant giving notice pursuant to this section shall give notice at least 30 days prior to the proposed date of termination if a tenant or resident has resided in the dwelling or occupied the property for less than one year.
(d)Notwithstanding subdivision (b), an owner of a residential dwelling giving notice pursuant to this section shall give notice at least 30 days prior to the proposed date of termination if all of the following apply:
(1)The dwelling or unit is alienable separate from the title to any other dwelling unit.
(2)The owner has contracted to sell the dwelling or unit to a bona fide purchaser for value, and has established an escrow with a title insurer or an underwritten title company, as defined in Sections 12340.4 and 12340.5 of the Insurance Code, respectively, a licensed escrow agent, as defined in Sections 17004 and 17200 of the Financial Code, or a licensed real estate broker, as defined in Section 10131 of the Business and Professions Code.
(3)The purchaser is a natural person or persons.
(4)The notice is given no more than 120 days after the escrow has been established.
(5)Notice was not previously given to the tenant pursuant to this section.
(6)The purchaser in good faith intends to reside in the property for at least one full year after the termination of the tenancy.
(e)After an owner has given notice of the owners intention to terminate the tenancy pursuant to this section, a tenant may also give notice of the tenants intention to terminate the tenancy pursuant to this section, provided that the tenants notice is for a period at least as long as the term of the periodic tenancy and the proposed date of termination occurs before the owners proposed date of termination.
(f)The notices required by this section shall be given in the manner prescribed in Section 1162 of the Code of Civil Procedure or by sending a copy by certified or registered mail.
(g)This section may not be construed to affect the authority of a public entity that otherwise exists to regulate or monitor the basis for eviction.
(h)A notice given by an owner pursuant to this section shall contain, in substantially the same form, the following:
State law permits former tenants to reclaim abandoned personal property left at the former address of the tenant, subject to certain conditions. You may or may not be able to reclaim property without incurring additional costs, depending on the cost of storing the property and the length of time before it is reclaimed. In general, these costs will be lower the sooner you contact your former landlord after being notified that property belonging to you was left behind after you moved out.
(i)A landlord or its agent shall not charge a tenant a fee for serving, posting, or otherwise delivering any notice, as described in this section.
(j)A landlord of a commercial real property shall include in the notice required by this section information on the provisions of this section.
(k)For the purposes of this section, the following definitions apply:
(1)Commercial real property means all real property in this state, except dwelling units subject to this chapter, mobilehomes as defined in Section 798.3, and recreational vehicles as defined in Section 799.29.
(2)Microenterprise has the same meaning as that term is defined in subdivision (a) of Section 18000 of the Business and Professions Code.
(3)Nonprofit organization means any private, nonprofit organization that qualifies under Section 501(c)(3) of the United States Internal Revenue Code of 1986.
(4)Qualified commercial tenant means a tenant of commercial real property that meets both of the following requirements:
(A)The tenant is a microenterprise, a restaurant with fewer than 10 employees, or a nonprofit organization with fewer than 20 25 employees.
(B)(i)Subject to clause (ii), the tenant has provided the landlord, within the previous 12 months, a written notice that the tenant is a qualified commercial tenant and a self-attestation regarding the number of employees, at such time the protections under this section come into place.
(ii)Unless the tenancy is from week to week, month to month, or other period less than a month, the tenant provided the notice and self-attestation described in clause (i) before or upon execution of the lease, and annually thereafter, at such time the protections under this section come into place.
SEC. 2.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
|
Date
|
Status
|
|---|---|
| Feb 2, 2026 | Died on inactive file. |
| Jun 3, 2025 | Ordered to inactive file at the request of Assembly Member Haney. |
| Jun 2, 2025 | Read third time and amended. Ordered to third reading. (Page 1953.) |
| Apr 23, 2025 | Read second time. Ordered to third reading. |
| Apr 22, 2025 | From committee: Do pass. (Ayes 8. Noes 3.) (April 22). |
| Mar 27, 2025 | In committee: Hearing postponed by committee. |
| Mar 25, 2025 | Re-referred to Com. on JUD. |
| Mar 24, 2025 | From committee chair, with author's amendments: Amend, and re-refer to Com. on JUD. Read second time and amended. |
| Mar 13, 2025 | Referred to Com. on JUD. |
| Feb 24, 2025 | Read first time. |
| Feb 22, 2025 | From printer. May be heard in committee March 24. |
| Feb 21, 2025 | Introduced. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Apr 22, 2025 | Do pass. | Assembly Standing Committee on Judiciary |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| ACCE Action | ** Support | |
| Apartment Association of Greater Los Angeles | ** Against | |
| Apartment Association Of Orange County | ** Against | |
| Bay Area Legal Aid | ** Support | |
| Berkeley Property Owners Association | ** Against | |
| California Apartment Association | ** Against | |
| California Association Of Realtors | ** Against | |
| California Attorney General Rob Bonta | ** Support | |
| California Building Industry Association | ** Against | |
| California Business Properties Association | ** Against | |
| California Center for Movement Legal Services | ** Support | |
| California Low-Income Consumer Coalition | ** Support | |
| California Nurses Association | ** Support | |
| California Rental Housing Association | ** Against | |
| California Rural Legal Assistance Foundation | ** Support | |
| Community Legal Aid SoCal | ** Support | |
| Conservice Utility Billing & Management | ** Against | |
| Consumer Federation Of California | ** Support | |
| East Bay Rental Housing Association | ** Against | |
| Elder Law & Advocacy | ** Support | |
| Housing and Economic Rights Advocates | ** Support | |
| Housing California | ** Support | |
| Leadership Counsel for Justice and Accountability | ** Support | |
| Legal Aid of Marin | ** Support | |
| Legal Aid Society of San Diego | ** Support | |
| Legal Services of Northern California | ** Support | |
| National Consumer Law Center | ** Support | |
| National Housing Law Project | ** Support | |
| Nor Cal Rental Property Association | ** Against | |
| North Valley Property Owners Association | ** Against | |
| PICO California | ** Support | |
| Public Counsel | ** Support | |
| Rise Economy | ** Support | |
| Santa Barbara Rental Property Association | ** Against | |
| Small Property Owners of San Francisco Institute | ** Against | |
| Southern California Rental Property Association | ** Against | |
| Techequity Action | ** Support | |
| Tenants Together | ** Support | |
| western center on law & poverty | ** Support |
ASSEMBLY THIRD READING
ATR Bill Id:AB 1248
Author:(Haney)
As Amended Ver:June 2, 2025
Majority vote
SUMMARY
Limits the fees that a landlord may charge in addition to rent and requires that any housing services provided by the landlord must be included in the rent and not charged as a separate fee.
Major Provisions
- Requires on or after April 1, 2026, a landlord or landlord's agent who advertises, displays, or offers residential property for rent to include in any advertisement, display, or offer the price, including all required fees or charges, and a description of all available optional housing services, as defined, including the associated fees for each optional housing service.
- Prohibits a landlord or landlord's agent from using a ratio utility billing system to allocate, demand, or collect fees or charges from a tenant, except for fees or charges for water or sewer service, as provided.
- Prohibit the landlord from charging any fee or charge other than required fees and charges, as defined, and fees or charges for optional housing services.
- Provides that a waiver of its provisions is contrary to public policy and
void and unenforceable, and the bill's provisions are severable. - Makes a landlord or landlord's agent who violates the provisions of this bill liable to a tenant in a civil action for damages, including treble damages, and establishes a three year statute of limitations to bring such an action. Specifies that nothing in this bill would prevent a landlord from recovering damages otherwise permitted by law.
COMMENTS
Existing laws, some only recently enacted, place limits on the ability of landlords to charge additional fees or payments that go beyond rent. For example, a landlord is authorized to demand a security deposit, but the deposit cannot be more than one month's rent. Landlords may charge late fees and applicant screening fees, but existing law sets limits on the amounts and manner in which they can be charged. Existing law prohibits a landlord from charging a fee for a tenant to pay by check, and prohibits the landlord from charging a fee for posting, serving, or otherwise delivering any notice of termination of the tenancy. However, existing law imposes few, if any, limits on a landlord's ability to charge additional fees for housing services or amenities that the landlord provides to tenants. According to many media reports, these additional fees and charges are not always presented to the prospective tenant as clearly as they should or could be; or if they are, the prospective tenant would have no means of knowing, at the time of signing the lease, whether the services or amenities are worth the price. As a result, many tenants who assume that they are renting a dwelling for certain price subsequently discover that the true cost of their "rent" is much higher than advertised or reasonably expected.
This bill addresses the problem by providing that, for tenancies created on or after January 1, 2026, tenants will only be liable for "rent," as defined, and a few other expressly authorized fees or charges. Specifically, the bill requires a landlord or landlord's agent who advertises, displays, or offers residential property for rent to include in any advertisement, display, or offer the price, including all required fees or charges, and a description of all available optional housing services, as defined, including the associated fees for each optional housing service.
The bill also prohibits a landlord's agent from using a ratio utility billing system to allocate, demand, or collect fees or charges from a tenant, except for fees or charges for water or sewer service, as provided. Finally, the bill makes a person who violates the provisions of this bill liable to the tenant for damages, as specified.
According to the Author
According to the author, "while the Tenant Protection Act (TPA) of 2019 placed necessary limits on rent increases, certain landlords have found ways to exploit perceived loopholes by imposing excessive fees that circumvent these protections. These hidden or misleading charges—including Ratio Utility Billing System (RUBS) fees, trash concierge fees, pest control fees, and other unbundled costs—unfairly drive up the true price of housing, making it harder for tenants to budget, compare rental costs, and maintain stable housing." The author contends that by "prohibiting landlords from imposing new or increased fees outside of rent, the bill prevents workarounds that artificially inflate housing costs beyond the [TPA] rent cap."
Arguments in Support
According to California Attorney General (AG) Rob Bonta, who is one of the co-sponsors of this legislation, AB 1248 will "protect tenants from unfair rental housing fees and other increases to their monthly rent [and provide] necessary clarity about what fees may be charged to tenants in addition to the advertised rent." The AG hopes that this measure will "end practices designed to circumvent state law rent cap protections and misleading advertisements that use an artificially low stated rent and add additional fees, which tenants often cannot control or predict."
Arguments in Opposition
The California Apartment Association (CAA) opposes this bill. They contend that restricting fees – including voluntary fees for optional services – will simply mean that landlords either will not provide the services or they will fold them into the price of the rent, thereby doing nothing to affect the affordability of rents. Specifically, CAA makes the following arguments against this bill:
For decades, separate fees and charges—imposed by both small and large housing providers—have been a standard part of the rental housing industry. These fees often help illustrate the costs associated with operating rental housing and can give tenants the ability to manage and reduce certain expenses, such as utilities and water. Mandating that all fees be folded into rent will not reduce the overall cost of housing. Instead, it will reduce transparency and limit tenants' ability to understand or control specific costs. AB 1248 so severely restricts the types of fees and charges that can be passed on separately to tenants that it is likely to increase overall rent prices, particularly for new tenants. The bill also fails to account for voluntary fees—charges for optional services that tenants may choose to utilize. As a result, tenants may ultimately lose access to convenient services that enhance their rental experience. That said, CAA strongly supports transparency in how fees and charges are advertised and communicated. We believe tenants should have a clear understanding of their total housing costs, including any fees, both when reviewing listings and at the time of signing a rental agreement. This is the approach we encourage you to pursue with AB 1248, rather than one that gives the impression, inaccurately, that housing costs will decrease as a result of AB 1248.
FISCAL COMMENTS
None
VOTES
ASM JUDICIARY: 8-3-1
YES: Kalra, Bauer-Kahan, Bryan, Connolly, Harabedian, Lee, Stefani, Zbur
NO: Dixon, Macedo, Sanchez
ABS, ABST OR NV: Pacheco
UPDATED
VERSION: June 2, 2025
CONSULTANT: Tom Clark / JUD. / (916) 319-2334 FN: 0000954
ASSEMBLY THIRD READING
ATR Bill Id:AB 1248
Author:(Haney)
As Amended Ver:March 24, 2025
Majority vote
SUMMARY
Limits the fees that a landlord may charge in addition to rent and requires that any housing services provided by the landlord must be included in the rent and not charged as a separate fee.
Major Provisions
- Requires, for new residential tenancies beginning on or after January 1, 2026, that a tenant only be obligated to pay rent and the following fees or charges to a landlord:
- A security deposit in the amount permitted by law.
- Rent stabilization fees or other similar fees or charges, other than taxes, imposed by a government.
- Fees or charges that the tenant pays directly to the landlord or landlord's agent for submetered water.
- Fees or charges for a tenant's late payments to the extent permitted by law.
- Requires, for residential tenancies that began before January 1, 2026, that a tenant only be obligated to pay rent, the fees and charges described in 1) above, any fees or charges that were charged at the start of the tenancy, and fees or charges for specified utilities, including the use of a ratio utility billing system, as defined, if it meets specified criteria.
- Defines "rent" to mean a single periodic payment and nonmonetary consideration to the landlord in exchange for the use or occupancy of a rental unit and premises and the provision of housing services under a rental contract or agreement, oral, written, or implied.
- Defines "housing services" to mean all services provided by the landlord related or connected to the use or occupancy of residential real property, including, but not limited to, trash collection, electrical service, water service, sewer service, gas service, other utilities, elevator service, storage, facilities, laundry, repairs, maintenance, heat, hot water, pest control, or any other benefits, privileges, or services, whether express or implied.
- Provides, for residential tenancies beginning before or after January 1, 2026, that if a tenant is given a discount on rent or fees or charges in exchange for signing a rental agreement, then the rental agreement must clearly state specified information about the amount and timing of the discount.
- Specifies that nothing in the bill prevents a tenant from being charged for individually metered utilities if the rental agreement meets prescribed requirements.
- Requires that any payment received from a tenant be applied to rent, rental debt, and any outstanding fees in a specified order, and would prohibit late fees from being charged to a tenant whose only delinquency is attributable to nonpayment or late payment of a late fee.
- Provides that a decrease in housing services, as defined, is an increase in rent.
- Makes a landlord or landlord's agent who violates the provisions of this bill liable to a tenant in a civil action for damages, including treble damages, and establishes a four year statute of limitations to bring such an action. Specifies that nothing in this bill would prevent a landlord from recovering damages otherwise permitted by law.
COMMENTS
Existing laws, some only recently enacted, place limits on the ability of landlords to charge additional fees or payments that go beyond rent. For example, a landlord is authorized to demand a security deposit, but the deposit cannot be more than one month's rent. Landlords may charge late fees and applicant screening fees, but existing law sets limits on the amounts and manner in which they can be charged. Existing law prohibits a landlord from charging a fee for a tenant to pay by check, and prohibits the landlord from charging a fee for posting, serving, or otherwise delivering any notice of termination of the tenancy. However, existing law imposes few, if any, limits on a landlord's ability to charge additional fees for housing services or amenities that the landlord provides to tenants. According to many media reports, these additional fees and charges are not always presented to the prospective tenant as clearly as they should or could be; or if they are, the prospective tenant would have no means of knowing, at the time of signing the lease, whether the services or amenities are worth the price. As a result, many tenants who assume that they are renting a dwelling for certain price subsequently discover that the true cost of their "rent" is much higher than advertised or reasonably expected.
This bill addresses the problem by providing that, for tenancies created on or after January 1, 2026, tenants will only be liable for "rent," as defined, and a few other expressly authorized fees or charges: a security deposit in the amount permitted by law; any rent stabilization or similar fees imposed by government; charges paid to the landlord for submetered water; or charges for late payments as permitted by law. For tenancies created before January 1, 2026, the tenant could be charged all of these same fees, as well as any fees or charges that were charged at the start of the tenancy, and fees or charges for utilities that rely on a "ratio utility billing system," which is essentially any proportional billing system that does not rely on individually metered units. The bill specifies that nothing in its provisions would prevent a tenant from being charged for individually metered utilities, so long as this is clearly provided for in the rental agreement.
To fully understand the scope of the bill, one must look closely at its definitions. The bill defines "rent" to include any periodic payment made to the landlord for the use and occupancy of the dwelling and for any "housing services" that are "provided by the landlord." "Housing services" is defined, in turn, to mean any services "related or connected to the use or occupancy of residential real property." These services could include "trash collection, electrical service, water service, sewer service, gas service, other utilities, elevator service, storage, facilities, laundry, repairs, maintenance, heat, hot water, pest control, or any other benefits, privileges, or services, whether express or implied." Of course, many of these services – like electrical and gas services or "other utilities" – are typically not part of the rent and are not paid to the landlord. However, in cases where the landlord provides or pays for these services, the landlord could not charge the tenant a separate fee for those services. The landlord would, at least for tenancies created on or after January 1, 2026, pass the cost of the services onto the tenant in the form of increased rent. For tenancies created before January 1, 2026, a landlord could continue to charge for such services, but only subject to certain conditions, and only if they had already charged for those services and charge the tenant no more than the actual cost of those utilities.
Transparency vs prohibition. While the author and co-sponsors claim that the fees and charges that prompted this bill are often "hidden" or deceptively presented, it is important to stress that this bill is not just a disclosure or transparency bill. It would not merely require the landlord to be transparent about additional fees beyond rent in advertising, rental agreements, or other communications with a tenant or prospective tenant; rather, it would prohibit the landlord from charging such fees in addition to the rent. The "rent," that is, must include those services and the landlord is barred from charging for those services through extra fees, regardless of whether the fees are disclosed in an advertisement or rental agreement.
Definition of "housing services" and parking. The bill defines "rent" as a payment made for the right to use and occupy the property, the usual definition of rent. Yet "rent" under the bill also includes any "housing services" that the landlord provides. The examples provided in the definition is not an exhaustive list, and some of things expressly included (like electricity, gas, and "other utilities") are things that are not typically included in rent. Given recently enacted legislation that expressly requires landlords to "unbundle" parking from the price of rent, the lack of any reference to parking is striking. Since the list of examples in the definition of "housing services" includes the oft used phrase "included, but not limited to," this means that parking might be considered a "housing service," since it is arguably "related or connected to the use or occupancy of residential real property." If it is considered a housing service, then a landlord could not charge a separate parking fee even though an existing law requires the landlord to unbundle it from the rent and charge it separately.
A "decrease in housing services." The bill declares that "a decrease in housing services is an increase in rent." Apparently, this provision relates to the presumption that landlords are redefining what is considered "rent" in order to circumvent the Tenant Protection Act (TPA). If the landlord that previously provided laundry, storage facilities, or water services to tenants, and then decided to stop providing those services without lowering the rent, then that would effectively be an increase in the rent. (It might also be a breach of the rental contract under existing law.) However, it is not entirely clear how one would calculate this to determine whether or not the reduction of services constituted a rent increase in violation of TPA.
The utility of ratio utility billing systems. This bill would prohibit the use of "ratio utility billing systems" (RUBS) for any tenancy created on or after January 1, 2026, and would only permit it for tenancies created before that date under specified conditions. RUBS, a system that has been used for many years, refers to the allocation of utility costs to tenants through any billing system other than individual meters. Since January 1, 2018, California law has required all new multifamily construction to include an individual meter (or submeter) for each individual rental unit. If a landlord wants to charge a tenant separately for water, they must use a submeter and disclose this charge to the tenant. However, many older multi-unit rental buildings do not have individual meters and, the cost of providing them may be prohibitive. RUBS relies on a formula, based on square footage and the number of occupants in each unit, with deductions for common areas, to allocate the total cost of the utility among the various tenants. This is not a perfect match, since a frugal large household might use less water than a profligate small household. But in the absence of RUBS, the landlord would either charge each unit an equal share of the cost (regardless of unit size or number of occupants) or do what amounts to the same thing: not charge the tenants but increase the rent across the board to cover the cost of the utility.
According to the Author
According to the author, "while the Tenant Protection Act (TPA) of 2019 placed necessary limits on rent increases, certain landlords have found ways to exploit perceived loopholes by imposing excessive fees that circumvent these protections. These hidden or misleading charges—including Ratio Utility Billing System (RUBS) fees, trash concierge fees, pest control fees, and other unbundled costs—unfairly drive up the true price of housing, making it harder for tenants to budget, compare rental costs, and maintain stable housing." The author contends that by "prohibiting landlords from imposing new or increased fees outside of rent, the bill prevents workarounds that artificially inflate housing costs beyond the [TPA] rent cap."
Arguments in Support
According to California Attorney General (AG) Rob Bonta, who is one of the co-sponsors of this legislation, AB 1248 will "protect tenants from unfair rental housing fees and other increases to their monthly rent [and provide] necessary clarity about what fees may be charged to tenants in addition to the advertised rent." The AG hopes that this measure will "end practices designed to circumvent state law rent cap protections and misleading advertisements that use an artificially low stated rent and add additional fees, which tenants often cannot control or predict."
Arguments in Opposition
The California Apartment Association (CAA) opposes this bill. They contend that restricting fees – including voluntary fees for optional services – will simply mean that landlords either will not provide the services or they will fold them into the price of the rent, thereby doing nothing to affect the affordability of rents. Specifically, CAA makes the following arguments against this bill:
For decades, separate fees and charges—imposed by both small and large housing providers—have been a standard part of the rental housing industry. These fees often help illustrate the costs associated with operating rental housing and can give tenants the ability to manage and reduce certain expenses, such as utilities and water. Mandating that all fees be folded into rent will not reduce the overall cost of housing. Instead, it will reduce transparency and limit tenants' ability to understand or control specific costs. AB 1248 so severely restricts the types of fees and charges that can be passed on separately to tenants that it is likely to increase overall rent prices, particularly for new tenants. The bill also fails to account for voluntary fees—charges for optional services that tenants may choose to utilize. As a result, tenants may ultimately lose access to convenient services that enhance their rental experience. That said, CAA strongly supports transparency in how fees and charges are advertised and communicated. We believe tenants should have a clear understanding of their total housing costs, including any fees, both when reviewing listings and at the time of signing a rental agreement. This is the approach we encourage you to pursue with AB 1248, rather than one that gives the impression, inaccurately, that housing costs will decrease as a result of AB 1248.
FISCAL COMMENTS
None
VOTES
ASM JUDICIARY: 8-3-1
YES: Kalra, Bauer-Kahan, Bryan, Connolly, Harabedian, Lee, Stefani, Zbur
NO: Dixon, Macedo, Sanchez
ABS, ABST OR NV: Pacheco
UPDATED
VERSION: March 24, 2025
CONSULTANT: Tom Clark / JUD. / (916) 319-2334 FN: 0000255
ASSEMBLY THIRD READING
ATR Bill Id:AB 1248
Author:(Haney)
As Amended Ver:March 24, 2025
Majority vote
SUMMARY
Limits the fees that a landlord may charge in addition to rent and requires that any housing services provided by the landlord must be included in the rent and not charged as a separate fee.
Major Provisions
- Requires, for new residential tenancies beginning on or after January 1, 2026, that a tenant only be obligated to pay rent and the following fees or charges to a landlord:
- A security deposit in the amount permitted by law.
- Rent stabilization fees or other similar fees or charges, other than taxes, imposed by a government.
- Fees or charges that the tenant pays directly to the landlord or landlord's agent for submetered water.
- Fees or charges for a tenant's late payments to the extent permitted by law.
- Requires, for residential tenancies that began before January 1, 2026, that a tenant only be obligated to pay rent, the fees and charges described in 1) above, any fees or charges that were charged at the start of the tenancy, and fees or charges for specified utilities, including the use of a ratio utility billing system, as defined, if it meets specified criteria.
- Defines "rent" to mean a single periodic payment and nonmonetary consideration to the landlord in exchange for the use or occupancy of a rental unit and premises and the provision of housing services under a rental contract or agreement, oral, written, or implied.
- Defines "housing services" to mean all services provided by the landlord related or connected to the use or occupancy of residential real property, including, but not limited to, trash collection, electrical service, water service, sewer service, gas service, other utilities, elevator service, storage, facilities, laundry, repairs, maintenance, heat, hot water, pest control, or any other benefits, privileges, or services, whether express or implied.
- Provides, for residential tenancies beginning before or after January 1, 2026, that if a tenant is given a discount on rent or fees or charges in exchange for signing a rental agreement, then the rental agreement must clearly state specified information about the amount and timing of the discount.
- Specifies that nothing in the bill prevents a tenant from being charged for individually metered utilities if the rental agreement meets prescribed requirements.
- Requires that any payment received from a tenant be applied to rent, rental debt, and any outstanding fees in a specified order, and would prohibit late fees from being charged to a tenant whose only delinquency is attributable to nonpayment or late payment of a late fee.
- Provides that a decrease in housing services, as defined, is an increase in rent.
- Makes a landlord or landlord's agent who violates the provisions of this bill liable to a tenant in a civil action for damages, including treble damages, and establishes a four year statute of limitations to bring such an action. Specifies that nothing in this bill would prevent a landlord from recovering damages otherwise permitted by law.
COMMENTS
Existing laws, some only recently enacted, place limits on the ability of landlords to charge additional fees or payments that go beyond rent. For example, a landlord is authorized to demand a security deposit, but the deposit cannot be more than one month's rent. Landlords may charge late fees and applicant screening fees, but existing law sets limits on the amounts and manner in which they can be charged. Existing law prohibits a landlord from charging a fee for a tenant to pay by check, and prohibits the landlord from charging a fee for posting, serving, or otherwise delivering any notice of termination of the tenancy. However, existing law imposes few, if any, limits on a landlord's ability to charge additional fees for housing services or amenities that the landlord provides to tenants. According to many media reports, these additional fees and charges are not always presented to the prospective tenant as clearly as they should or could be; or if they are, the prospective tenant would have no means of knowing, at the time of signing the lease, whether the services or amenities are worth the price. As a result, many tenants who assume that they are renting a dwelling for certain price subsequently discover that the true cost of their "rent" is much higher than advertised or reasonably expected.
This bill addresses the problem by providing that, for tenancies created on or after January 1, 2026, tenants will only be liable for "rent," as defined, and a few other expressly authorized fees or charges: a security deposit in the amount permitted by law; any rent stabilization or similar fees imposed by government; charges paid to the landlord for submetered water; or charges for late payments as permitted by law. For tenancies created before January 1, 2026, the tenant could be charged all of these same fees, as well as any fees or charges that were charged at the start of the tenancy, and fees or charges for utilities that rely on a "ratio utility billing system," which is essentially any proportional billing system that does not rely on individually metered units. The bill specifies that nothing in its provisions would prevent a tenant from being charged for individually metered utilities, so long as this is clearly provided for in the rental agreement.
To fully understand the scope of the bill, one must look closely at its definitions. The bill defines "rent" to include any periodic payment made to the landlord for the use and occupancy of the dwelling and for any "housing services" that are "provided by the landlord." "Housing services" is defined, in turn, to mean any services "related or connected to the use or occupancy of residential real property." These services could include "trash collection, electrical service, water service, sewer service, gas service, other utilities, elevator service, storage, facilities, laundry, repairs, maintenance, heat, hot water, pest control, or any other benefits, privileges, or services, whether express or implied." Of course, many of these services – like electrical and gas services or "other utilities" – are typically not part of the rent and are not paid to the landlord. However, in cases where the landlord provides or pays for these services, the landlord could not charge the tenant a separate fee for those services. The landlord would, at least for tenancies created on or after January 1, 2026, pass the cost of the services onto the tenant in the form of increased rent. For tenancies created before January 1, 2026, a landlord could continue to charge for such services, but only subject to certain conditions, and only if they had already charged for those services and charge the tenant no more than the actual cost of those utilities.
Transparency vs prohibition. While the author and co-sponsors claim that the fees and charges that prompted this bill are often "hidden" or deceptively presented, it is important to stress that this bill is not just a disclosure or transparency bill. It would not merely require the landlord to be transparent about additional fees beyond rent in advertising, rental agreements, or other communications with a tenant or prospective tenant; rather, it would prohibit the landlord from charging such fees in addition to the rent. The "rent," that is, must include those services and the landlord is barred from charging for those services through extra fees, regardless of whether the fees are disclosed in an advertisement or rental agreement.
Definition of "housing services" and parking. The bill defines "rent" as a payment made for the right to use and occupy the property, the usual definition of rent. Yet "rent" under the bill also includes any "housing services" that the landlord provides. The examples provided in the definition is not an exhaustive list, and some of things expressly included (like electricity, gas, and "other utilities") are things that are not typically included in rent. Given recently enacted legislation that expressly requires landlords to "unbundle" parking from the price of rent, the lack of any reference to parking is striking. Since the list of examples in the definition of "housing services" includes the oft used phrase "included, but not limited to," this means that parking might be considered a "housing service," since it is arguably "related or connected to the use or occupancy of residential real property." If it is considered a housing service, then a landlord could not charge a separate parking fee even though an existing law requires the landlord to unbundle it from the rent and charge it separately.
A "decrease in housing services." The bill declares that "a decrease in housing services is an increase in rent." Apparently, this provision relates to the presumption that landlords are redefining what is considered "rent" in order to circumvent the Tenant Protection Act (TPA). If the landlord that previously provided laundry, storage facilities, or water services to tenants, and then decided to stop providing those services without lowering the rent, then that would effectively be an increase in the rent. (It might also be a breach of the rental contract under existing law.) However, it is not entirely clear how one would calculate this to determine whether or not the reduction of services constituted a rent increase in violation of TPA.
The utility of ratio utility billing systems. This bill would prohibit the use of "ratio utility billing systems" (RUBS) for any tenancy created on or after January 1, 2026, and would only permit it for tenancies created before that date under specified conditions. RUBS, a system that has been used for many years, refers to the allocation of utility costs to tenants through any billing system other than individual meters. Since January 1, 2018, California law has required all new multifamily construction to include an individual meter (or submeter) for each individual rental unit. If a landlord wants to charge a tenant separately for water, they must use a submeter and disclose this charge to the tenant. However, many older multi-unit rental buildings do not have individual meters and, the cost of providing them may be prohibitive. RUBS relies on a formula, based on square footage and the number of occupants in each unit, with deductions for common areas, to allocate the total cost of the utility among the various tenants. This is not a perfect match, since a frugal large household might use less water than a profligate small household. But in the absence of RUBS, the landlord would either charge each unit an equal share of the cost (regardless of unit size or number of occupants) or do what amounts to the same thing: not charge the tenants but increase the rent across the board to cover the cost of the utility.
According to the Author
According to the author, "while the Tenant Protection Act (TPA) of 2019 placed necessary limits on rent increases, certain landlords have found ways to exploit perceived loopholes by imposing excessive fees that circumvent these protections. These hidden or misleading charges—including Ratio Utility Billing System (RUBS) fees, trash concierge fees, pest control fees, and other unbundled costs—unfairly drive up the true price of housing, making it harder for tenants to budget, compare rental costs, and maintain stable housing." The author contends that by "prohibiting landlords from imposing new or increased fees outside of rent, the bill prevents workarounds that artificially inflate housing costs beyond the [TPA] rent cap."
Arguments in Support
According to California Attorney General (AG) Rob Bonta, who is one of the co-sponsors of this legislation, AB 1248 will "protect tenants from unfair rental housing fees and other increases to their monthly rent [and provide] necessary clarity about what fees may be charged to tenants in addition to the advertised rent." The AG hopes that this measure will "end practices designed to circumvent state law rent cap protections and misleading advertisements that use an artificially low stated rent and add additional fees, which tenants often cannot control or predict."
Arguments in Opposition
The California Apartment Association (CAA) opposes this bill. They contend that restricting fees – including voluntary fees for optional services – will simply mean that landlords either will not provide the services or they will fold them into the price of the rent, thereby doing nothing to affect the affordability of rents. Specifically, CAA makes the following arguments against this bill:
For decades, separate fees and charges—imposed by both small and large housing providers—have been a standard part of the rental housing industry. These fees often help illustrate the costs associated with operating rental housing and can give tenants the ability to manage and reduce certain expenses, such as utilities and water. Mandating that all fees be folded into rent will not reduce the overall cost of housing. Instead, it will reduce transparency and limit tenants' ability to understand or control specific costs. AB 1248 so severely restricts the types of fees and charges that can be passed on separately to tenants that it is likely to increase overall rent prices, particularly for new tenants. The bill also fails to account for voluntary fees—charges for optional services that tenants may choose to utilize. As a result, tenants may ultimately lose access to convenient services that enhance their rental experience. That said, CAA strongly supports transparency in how fees and charges are advertised and communicated. We believe tenants should have a clear understanding of their total housing costs, including any fees, both when reviewing listings and at the time of signing a rental agreement. This is the approach we encourage you to pursue with AB 1248, rather than one that gives the impression, inaccurately, that housing costs will decrease as a result of AB 1248.
FISCAL COMMENTS
None
VOTES
ASM JUDICIARY: 8-3-1
YES: Kalra, Bauer-Kahan, Bryan, Connolly, Harabedian, Lee, Stefani, Zbur
NO: Dixon, Macedo, Sanchez
ABS, ABST OR NV: Pacheco
UPDATED
VERSION: March 24, 2025
CONSULTANT: Tom Clark / JUD. / (916) 319-2334 FN: 0000255
Date of Hearing: April 22, 2025
ASSEMBLY COMMITTEE ON JUDICIARY
Ash Kalra, Chair
ABPCA Bill Id:AB 1248
Author:(Haney) – As Amended Ver:March 24, 2025
SUBJECT: Hiring of real property: fees and charges
KEY ISSUE: should “housing services” that a landlord provides to tenants be included within the price of the rent, instead of being charged as a separate fee in addition to the rent?
SYNOPSIS
Six years ago, the Legislature passed and the Governor signed AB 1482 (Chap. 597, Stats. 2019), which created the Tenant Protection Act (TPA) of 2019. Among other things, the TPA imposed a statewide cap on rent increases, so that in a given year, a landlord could not raise the rent by more than five percent, plus the annual increase in the consumer price index per year, but not to exceed an overall increase of ten percent. The author and co-sponsors of this bill claim that some landlords are attempting to circumvent the TPA rent cap by charging a separate “fee” for housing services that used to be included within the rent. While landlords have long unbundled certain services from the cost of rent and charged them as separate fees, the author and supporters of this measure claim that the practice has increased since the enactment of the TPA, supposedly in an effort to circumvent the TPA.
For tenancies that begin on or after January 1, 2026, this bill would require landlords to include any “housing services” that they provide in the cost of the rent, instead of charging for those services as a separate “fee” in addition to rent. Under this bill, a tenant could only be required to pay rent plus the following charges: a security deposit in the amount permitted by law; any rent stabilization or similar fees imposed by government; charges paid to the landlord for submetered water; or charges for late payments as permitted by law. While the bill would not necessarily prevent a landlord from charging a tenant for individually metered utilities, any other housing-related services that the landlord provides (such as trash collection, laundry, pest control, maintenance, etc.) must be included in the price of the rent and could not be charged as an additional fee. The bill also would prescribe the order in which payments shall be applied to rent, rental debt, or other fees or charges. The bill would declare that any decrease in housing services would constitute a rental increase. Finally, the bill would make a landlord who violated its provision subject to as much as treble damages in a civil action.
The bill is co-sponsored by California Attorney General Rob Bonta, California Rural Legal Assistance Foundation, Consumer Federation of California, and National Housing Law Project. It is supported by several housing and legal aid advocates, among others. The bill is opposed by the California Apartment Association, the California Association of Realtors, and several regional property owner associations. As noted in the analysis, while the intent of the bill seems clear and admirable, some of its provisions and definitions raise operational questions.
SUMMARY: Limits the fees that a landlord may charge in addition to rent and requires that any housing services provided by the landlord must be included in the rent and not charged as a separate fee. Specifically, this bill:
- Requires, for new residential tenancies beginning on or after January 1, 2026, that a tenant only be obligated to pay rent and the following fees or charges to a landlord:
- A security deposit in the amount permitted by law.
- Rent stabilization fees or other similar fees or charges, other than taxes, imposed by a government.
- Fees or charges that the tenant pays directly to the landlord or landlord’s agent for submetered water.
- Fees or charges for a tenant’s late payments to the extent permitted by law.
- Requires, for residential tenancies that began before January 1, 2026, that a tenant only be obligated to pay rent, the fees and charges described in 1) above, any fees or charges that were charged at the start of the tenancy, and fees or charges for specified utilities, including the use of a ratio utility billing system, as defined, if it meets specified criteria.
- Defines “rent” for purposes of 1) and 2) above to mean a single periodic payment and all nonmonetary consideration to or for the benefit of the landlord in exchange for the use or occupancy of a rental unit and premises and the provision of housing services under a rental contract or agreement, oral, written, or implied.
- Defines “housing services” for purposes of 3) above to mean all services provided by the landlord related or connected to the use or occupancy of residential real property, including, but not limited to, trash collection, electrical service, water service, sewer service, gas service, other utilities, elevator service, storage, facilities, laundry, repairs, maintenance, heat, hot water, pest control, or any other benefits, privileges, or services, whether express or implied.
- Provides, for residential tenancies beginning before or after January 1, 2026, that if a tenant is given a discount on rent or fees or charges in exchange for signing a rental agreement, then the rental agreement must clearly state specified information about the amount and timing of the discount.
- Specifies that nothing in the bill prevents a tenant from being charged for individually metered utilities if the rental agreement meets prescribed requirements.
- Requires that any payment received from, or on behalf of, a tenant be applied to rent, rental debt, and any outstanding fees in a specified order, and would prohibit late fees from being charged to a tenant whose only delinquency is attributable to nonpayment or late payment of a late fee.
- Provides that a decrease in housing services, as defined, is an increase in rent.
- Makes a landlord or landlord’s agent who violates the provisions of this bill liable to a tenant in a civil action for damages, including treble damages, and establishes a four year statute of limitations to bring such an action. Specifies that nothing in this bill would prevent a landlord from recovering damages otherwise permitted by law.
- Declares that a waiver of the bill’s provisions is contrary to public policy and void, and that nothing in the bill preempts a local government from imposing additional requirements upon a landlord or providing greater protection to tenants.
EXISTING LAW:
- Regulates the hiring of real property and imposes various requirements on landlords relating to the application for, and leasing of, residential rental property. (Civil Code Sections 1940 to 1954.07. Subsequent citations refer to this code.)
- Prohibits a landlord from demanding or receiving security, however denominated, in an amount or value in excess of an amount equal to one month’s rent, in addition to any rent for the first month paid on or before initial occupancy. (Section 1950.5(c).)
- Prohibits a landlord or its agent from charging a tenant a fee for serving, posting, or otherwise delivering a notice of termination of a hiring of residential property, as specified. (Section 1946.1(i).)
- Prohibits a landlord or its agent from charging a tenant any fee for payment by check. (Section 1947.3(b).)
- Prohibits an owner of residential real property from, over the course of any 12-month period, increasing the gross rental rate for a dwelling or a unit more than 5 percent plus the percentage change in the cost of living, or 10 percent, whichever is lower, of the lowest gross rental rate charged for that dwelling or unit at any time during the 12 months prior to the effective date of the increase. Creates exemptions to this restriction, including a new tenancy in which no tenant from the prior tenancy remains in lawful possession; housing that has been issued a certificate of occupancy within the previous 15 years; and single-family houses owned by a natural person. (Section 1947.12.)
FISCAL EFFECT: As currently in print this bill is keyed non-fiscal.
COMMENTS: According to the author, “while the Tenant Protection Act (TPA) of 2019 placed necessary limits on rent increases, certain landlords have found ways to exploit perceived loopholes by imposing excessive fees that circumvent these protections. These hidden or misleading charges—including Ratio Utility Billing System (RUBS) fees, trash concierge fees, pest control fees, and other unbundled costs—unfairly drive up the true price of housing, making it harder for tenants to budget, compare rental costs, and maintain stable housing.” The author contends that by “prohibiting landlords from imposing new or increased fees outside of rent, the bill prevents workarounds that artificially inflate housing costs beyond the [TPA] rent cap.”
Existing law and permissible fees. Existing laws, some only recently enacted, place limits on the ability of landlords to charge additional fees or payments that go beyond rent. For example, a landlord is authorized to demand a security deposit, but the deposit cannot be more than one month’s rent. Landlords may charge late fees and applicant screening fees, but existing law sets limits on the amounts and manner in which they can be charged. Existing law prohibits a landlord from charging a fee for a tenant to pay by check, and prohibits the landlord from charging a fee for posting, serving, or otherwise delivering any notice of termination of the tenancy. However, existing law imposes few, if any, limits on a landlord’s ability to charge additional fees for housing services or amenities that the landlord provides to tenants. According to many media reports, these additional fees and charges are not always presented to the prospective tenant as clearly as they should or could be; or if they are, the prospective tenant would have no means of knowing, at the time of signing the lease, whether the services or amenities are worth the price. As a result, many tenants who assume that they are renting a dwelling for certain price subsequently discover that the true cost of their “rent” is much higher than advertised or reasonably expected.
This bill seeks to resolve this problem by providing that, for tenancies created on or after January 1, 2026, tenants will only be liable for “rent,” as defined, and a few other expressly authorized fees or charges: a security deposit in the amount permitted by law; any rent stabilization or similar fees imposed by government; charges paid to the landlord for submetered water; or charges for late payments as permitted by law. For tenancies created before January 1, 2026, the tenant could be charged all of these same fees, as well as any fees or charges that were charged at the start of the tenancy, and fees or charges for utilities that rely on a “ratio utility billing system,” which is essentially any proportional billing system that does not rely on individually metered units. The bill specifies that nothing in its provisions would prevent a tenant from being charged for individually metered utilities, so long as this is clearly provided for in the rental agreement.
To fully understand the scope of the bill, one must look closely at its definitions. The bill defines “rent” to include any periodic payment made to the landlord for the use and occupancy of the dwelling and for any “housing services” that are “provided by the landlord.” “Housing services” is defined, in turn, to mean any services “related or connected to the use or occupancy of residential real property.” These services could include, but are not limited to, “trash collection, electrical service, water service, sewer service, gas service, other utilities, elevator service, storage, facilities, laundry, repairs, maintenance, heat, hot water, pest control, or any other benefits, privileges, or services, whether express or implied.” Of course, many of these services – like electrical and gas services or “other utilities” – are typically not part of the rent and are not paid to the landlord. Instead, the tenant contracts with a third party – a utility company – to provide the service. However, in cases where the landlord provides or pays for these services, the landlord could not charge the tenant a separate fee for those services. The landlord would, at least for tenancies created on or after January 1, 2026, pass the cost of the services onto the tenant in the form of increased rent. For tenancies created before January 1, 2026, a landlord could continue to charge for such services, but only subject to certain conditions, and only if they had already charged for those services and charge the tenant no more than the actual cost of those utilities.
Transparency vs prohibition. While the author and co-sponsors claim that the fees and charges that prompted this bill are often “hidden” or deceptively presented, it is important to stress that this bill is not just a disclosure or transparency bill. It would not merely require the landlord to be transparent about additional fees beyond rent in advertising, rental agreements, or other communications with a tenant or prospective tenant; rather, it would prohibit the landlord from charging such fees in addition to the rent. The “rent,” that is, must include those services and the landlord is barred from charging for those services through extra fees, regardless of whether the fees are disclosed in an advertisement or rental agreement. The California Apartment Association (CAA), which opposes this bill, has informed the author and the Committee that they “strongly support transparency in how fees and charges are advertised and communicated,” because tenants should understand the total costs “both when reviewing listings and at the time of signing a rental agreement.” CAA might support a bill that required transparency. However, it is not clear how much a bill requiring transparency in advertising and rental agreements would alter existing law, which already prohibits false advertising and misrepresentation in contracts, including in a rental agreement.
Other pending legislation, most notably SB 381 (Wahab), prohibits certain fees outright, including pet fees and parking fees. However, that bill would also, more consistently with the “transparency” approach, prohibit a landlord from charging “any fee that is not specified in the rental agreement.” (Note: The provisions of SB 381 were recently added to SB 681 (Wahab), which includes several other landlord-tenant provisions not related to this bill.)
Have landlords increased their use of separate fees since the enactment of the TPA? The author and co-sponsors all claim that this practice of unbundling services that were once included in the rent and charging for those services as separate fees has been “increasing” since the enactment of the Tenant Protection Act (TPA) in 2019. Because the TPA prevents landlords from raising the rent, landlords allegedly circumvent the rent cap by keeping the rent steady but charging a fee for services that were once included in the rent. In fairness to the landlords, it should be stressed that the evidence for this rather serious allegation is anecdotal at best. The only source cited for this claim in the letters of support is a 2023 report by the National Consumer Law Center, entitled “Too Damn High: How junk fees add to skyrocketing rents.” However, this report does not cite any data comparing practices before and after the TPA’s operative date. The only thing in the report that comes remotely close to supporting this assertion is a single sentence claiming that “two California advocates commented that since the passage of a state law that limits rental increases, they have seen an increase in landlords finding any other way to charge renters more money.” We know nothing about these “two California advocates.” This is not to dispute the co-sponsors’ contention, for the statement may very well be true; but no empirical data has been provided to the Committee that supports the claim.
Possible Amendments and Clarifications. The overall purpose of this bill is clear enough: to prohibit landlords from charging fees for services that most tenants would reasonably assume should be part of the rent. For example, charging a tenant a fee for things like maintenance, pest control, and amenities that attract more applicants are part of the cost of doing business. However, there are some provisions in the bill, three of which are discussed below, that may need clarification.
Definition of “housing services” and parking. The bill defines “rent” as a payment made for the right to use and occupy the property, the usual definition of rent. Yet “rent” under the bill also includes any “housing services” that the landlord provides. The examples provided in the definition is not an exhaustive list, and some of things expressly included (like electricity, gas, and “other utilities”) are things that are not typically included in rent. Given recently enacted legislation that expressly requires landlords to “unbundle” parking from the price of rent, the lack of any reference to parking is striking. Since the list of examples in the definition of “housing services” includes the oft used phrase “included, but not limited to,” this means that parking might be considered a “housing service,” since it is arguably “related or connected to the use or occupancy of residential real property.” If it is considered a housing service, then a landlord could not charge a separate parking fee even though an existing law requires the landlord to unbundle it from the rent and charge it separately. If the bill moves out of this Committee, the author may wish to consider either adding “parking” to the list, or add it to the list of fees that may be charged.
A “decrease in housing services.” One provision of the bill declares that “a decrease in housing services is an increase in rent.” Apparently, this provision relates to the presumption that landlords are redefining what is considered “rent” in order to circumvent the TPA. Presumably, if the landlord that previously provided laundry, storage facilities, or water services to tenants, and then decided to stop providing those services without lowering the rent, then that would effectively be an increase in the rent. (It might also be a breach of the rental contract under existing law.) While this principle seems clear enough, it is not entirely clear how one would calculate this to determine whether or not the reduction of services constituted a rent increase in violation of TPA. For example, if a landlord provided water services, and the water bill per unit ran $100 per month, would this constitute a $100 increase in the rent? Or would the landlord, in order to stay within the limits of the TPA, be required to lower the rent? If the bill moves out of this Committee, and if the intent of this provision is to make a decrease in services an increase that might violate the TPA, then the author may wish to consider clarifying how one would calculate the increase for purposes of the TPA. Perhaps the answer to this is that either a court or a local rent control board will decide on a case-by-case basis if a tenant raises a challenge under either the TPA or a local rent control ordinance.
The utility of ratio utility billing systems. This bill would apparently prohibit the use of “ratio utility billing systems” (RUBS) for any tenancy created on or after January 1, 2026, and would only permit it for tenancies created before that date under specified conditions. RUBS, a system that has been used for many years, refers to the allocation of utility costs to tenants through any billing system other than individual meters. Since January 1, 2018, California law has required all new multifamily construction to include an individual meter (or submeter) for each individual rental unit. If a landlord wants to charge a tenant separately for water, they must use a submeter and disclose this charge to the tenant. However, many older multi-unit rental buildings do not have individual meters and, the cost of providing them may be prohibitive. RUBS relies on a formula, based on square footage and the number of occupants in each unit, with deductions for common areas, to allocate the total cost of the utility among the various tenants. Thus, tenants with larger units and more occupants would pay a higher share than tenants with smaller units and fewer occupants. This is not a perfect match, since a frugal large household might use less water than a profligate small household. But in the absence of RUBS, the landlord would either charge each unit an equal share of the cost (regardless of unit size or number of occupants) or do what amounts to the same thing: not charge the tenants but increase the rent across the board to cover the cost of the utility.
Conservice, a company that manages utility billing for rental properties based on a RUBS formula, opposes this bill because it will prohibit RUBS in tenancies created on or after January 1, 2026, and will greatly restrict them for tenancies created before that date. Conservice, citing a single study, claims that tenants will consume more water if they do not receive any bill for their water; rather, the cost of the water is effectively hidden and fixed within the rent. Conservice makes an interesting point and, indeed, the purpose of requiring new units to have individual meters was to promote water conservation by making consumers more conscious of their usage. However, the water conservation benefits of RUBS is not nearly as great as individual meters. That is, even though RUBS apportions bills based on reasonable factors like unit size and number of occupants, it clearly does not promote water conservation in the same way as individual meters, because under RUBS, the tenant’s water bill will be based on the size of the unit and the number of occupants, not on the amount of water that they consume. Conservice contends, however, that simply receiving a bill for water makes tenants more conscious of the fact that water is not free. Nonetheless, if the bill moves forward, the author may wish to consider whether prohibiting RUBS serves the purpose of this bill. After all, while RUBS may be less equitable that individual meters, it is arguably more equitable than simply requiring all tenants to pay the same amount in the form of higher rent.
ARGUMENTS IN SUPPORT: According to California Attorney General (AG) Rob Bonta, who is one of the co-sponsors of this legislation, AB 1248 will “protect tenants from unfair rental housing fees and other increases to their monthly rent [and provide] necessary clarity about what fees may be charged to tenants in addition to the advertised rent.” The AG hopes that this measure will “end practices designed to circumvent state law rent cap protections and misleading advertisements that use an artificially low stated rent and add additional fees, which tenants often cannot control or predict.”
The AG contends the practice of unbundling housing services from the price of rent and charging them as separate “fees” increased after the passage of the Tenant Protection Act (TPA) in 2019, which, among other things, capped annual rental increases to 5% plus CPI, not to exceed 10%. “By imposing and increasing additional fees,” the AG contends, “some of these landlords increase the gross rental rate far above the TPA’s maximum of 10%, making it even more difficult for tenants to afford adequate housing. This practice places significant burdens on tenants, including uncertainty about monthly housing costs due to variable or increasing fees. If the combination of rent increases and new fees exceed the TPA’s rent cap, these landlords are also violating California law.”
AB 1248 will address this problem, the AG contends, by requiring “landlords to include all costs in the rent rather than charging separate fees, with narrow exceptions specified in the bill. By requiring all costs to the tenant to be included in the rent, the bill will also allow those searching for housing to compare the true prices of different options, and will create a fair marketplace for landlords. This change to the law will also help prevent attempted evasions of state rent caps and help ensure that tenants’ housing payments to their landlords remain stable and predictable.”
The California Rural Legal Assistance Foundation, the Consumer Federation of California, and the, and National Housing Law Project (co-sponsors) argue that AB 1248 will “address the practice of charging unnecessary or deceptive fees to tenants.” Like the AG, the co-sponsors contend that landlords use separate fees, at least in part, to evade TPA. They write: “unscrupulous landlords are evading the law by increasingly charging separately for services the landlord previously included in the rent, or charging additional, unnecessary mandatory fees.
Even in properties not covered by the TPA, these unfair and deceptive practices are on the rise. AB 1248 will end these practices by defining rent, prohibiting landlords from charging additional fees separate from the rent with a few narrow exceptions, and requiring that a tenant’s rent payment be applied to rent first and only after that to any other allowable fees.”
ARGUMENTS IN OPPOSITION: The California Apartment Association (CAA) opposes this bill. They contend that restricting fees – including voluntary fees for optional services – will simply mean that landlords either will not provide the services or they will fold them into the price of the rent, thereby doing nothing to affect the affordability of rents. Specifically, CAA makes the following arguments against this bill:
For decades, separate fees and charges—imposed by both small and large housing providers—have been a standard part of the rental housing industry. These fees often help illustrate the costs associated with operating rental housing and can give tenants the ability to manage and reduce certain expenses, such as utilities and water. Mandating that all fees be folded into rent will not reduce the overall cost of housing. Instead, it will reduce transparency and limit tenants’ ability to understand or control specific costs.
AB 1248 so severely restricts the types of fees and charges that can be passed on separately to tenants that it is likely to increase overall rent prices, particularly for new tenants. Additionally, while the bill implies that it permits late fees, the actual language prohibits them. This is misleading and will create confusion.
The bill also fails to account for voluntary fees—charges for optional services that tenants may choose to utilize. As a result, tenants may ultimately lose access to convenient services that enhance their rental experience.
That said, CAA strongly supports transparency in how fees and charges are advertised and communicated. We believe tenants should have a clear understanding of their total housing costs, including any fees, both when reviewing listings and at the time of signing a rental agreement. This is the approach we encourage you to pursue with AB 1248, rather than one that gives the impression, inaccurately, that housing costs will decrease as a result of AB 1248.
While the California Association of Realtors and several regional rental associations oppose this bill for substantially the same reasons articulated by CAA, Conservice Utility Billing and Management (Conservice), a company that manages utility billing for rental properties, opposes this bill primarily because it would prohibit the use of “ratio utility billing systems” (RUBS) for most rental properties. Conservice claims that “in many older apartment buildings, individual submeters are not possible or are cost prohibitive . . . In these cases, RUBS is the only fair method to allocate water costs and encourage conservation, without increasing rents.” Conservice cites data suggesting that when tenants pay for water separately from rent they tend to use less water. However, when utilities “are ‘free’ or included in rent, consumption increases.” As such, Conservice contends, “AB 1248 will lead to significantly higher water consumption among tenants throughout the state.”
REGISTERED SUPPORT / OPPOSITION:
Support
California Attorney General Rob Bonta (co-sponsor)
California Rural Legal Assistance Foundation (co-sponsor)
Consumer Federation of California (co-sponsor)
National Housing Law Project (co-sponsor)
ACCE Action
Bay Area Legal Aid
California Center for Movement Legal Services
California Low-Income Consumer Coalition
California Nurses Association
Community Legal Aid SoCal
Elder Law & Advocacy
Housing and Economic Rights Advocates
Housing California
Leadership Counsel for Justice and Accountability
Legal Aid of Marin
Legal Aid Society of San Diego
Legal Services of Northern California
National Consumer Law Center
Pico California
Public Counsel
Rise Economy
Techequity Action
Tenants Together
Western Center on Law & Poverty
Opposition
Apartment Association of Greater Los Angeles
Apartment Association of Orange County
Berkeley Property Owner's Association
California Apartment Association
California Association of Realtors
California Building Industry Association
California Business Properties Association
California Rental Housing Association
Conservice Utility Billing & Management
East Bay Rental Housing Association
Nor Cal Rental Property Association
North Valley Property Owners Association
Santa Barbara Rental Property Association
Small Property Owners of San Francisco Institute
Southern California Rental Property Association
Analysis Prepared by: Tom Clark / JUD. / (916) 319-2334
Discussed in Hearing
Assembly Standing Committee on Judiciary
Bill Author
Bill Co-Author(s):