California Bill Aims to Reward On-Time Rent Payments

A new bill would provide California tenants the option of having on-time rent payments reported by landlords to credit bureaus.
California Bill Aims to Reward On-Time Rent Payments
Pedestrians cross a street against a backdrop of luxury highrise apartments under construction in Los Angeles on Oct. 8, 2019. (Frederic J. Brown/AFP via Getty Images)
Rudy Blalock
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Do you pay your rent on time? In California, renters could receive positive marks on their credit if a bill introduced earlier this year is signed into law.

Introduced by Assemblyman Matt Haney, Assembly Bill 2747 would provide California tenants the option of having on-time rent payments reported by landlords to credit bureaus.

Mr. Haney said the bill, if ultimately passed, would correct the practice where renters’ timely payments aren’t reflected on their credit score while missed or late payments are.

“This is an unfair practice that is further pushing millions of renters into cycles of debt and poor financial health,” the Democrat from San Francisco said in a June press release.

Under current law, most landlords are not required to report to credit companies when tenants pay their rent, but they can notify bureaus of delinquent payments.

Currently, only landlords of assisted housing developments—for tenants receiving government assistance—and who have more than 15 units, must report on time rent payment, according to an analysis of the bill.

Of the 17 million renters in California not receiving government assistance, none have had their timely payments reported, making it harder for some to find housing, according to Mr. Haney’s press release.

UCLA student David Ramirez, who’s also the government affairs chair for the UC Student Association, said such a law would help, as, in his case, now that he’s leaving his off-campus housing after his recent graduation.

“As I’m preparing for life after graduation, I’m realizing how crucial having good credit is to buying a car and renting other apartments, but my one main consistent payment has never been reported to a credit bureau agency,” Mr. Ramirez said in the press release.

Under the proposed bill, landlords would be able to collect a $10 fee or the actual cost, whichever is less, when reporting a renter’s on-time payment each month to at least one nationwide consumer reporting agency.

But according to some housing providers, the actual cost could be significantly higher for “mom and pop” landlords who own fewer than 50 units, who don’t have established relationships with the major credit bureaus.

“The throats of small owners are slowly being cut over regulation and overzealous legislators who do not understand the risks and complications of the rental housing business,” Daniel Yukelson, executive director of the Apartment Association of Greater Los Angeles, told The Epoch Times in an email.

He said because of regulations like those proposed under the bill, the cost of rental housing “must by necessity, continue to skyrocket,” as landlords struggle to keep up with the costs associated with renting in California.

According to Mr. Yukelson, under the bill, smaller landlords would have to establish a relationship with one of the credit bureaus, which can be a lengthy and complex process, or hire a third-party agency, which, he said, requires software products and is costly.

“Assembly Bill 2747 will literally be impossible to comply with and force most small rental housing providers to either license expensive software products or retain the services of a third party … at considerable cost merely to comply with the bill’s reporting requirements,” he said.

One option, he said, would be to work through a third-party reporting entity such as Rent Bureau, a subsidiary of Experian, but doing so requires expensive property management software which costs thousands annually in license fees, or hire additional services to run the software, which, he said, may not exist.

The implications, Mr. Yukelson said are that larger property owners would continue to grow in California.

“The only place left for rental housing in California will be for the major corporations to step in and take-over all rental housing. Gone will be the days of the naturally occurring affordable housing in California traditionally provided by smaller, ‘mom and pop’ owners,” he said.

If passed, landlords would have to notify their tenants of the opt in good reporting program and the fee associated with it for leases that began on or after Jan. 1, 2025 by April 1.

They must also send out a yearly renewal notice giving the tenant the option to participate.

Tenants can opt out of the reporting at any time but would be restricted from opting back in for 6 months, according to the bill.

Supporters of the bill include the University of California Student Association, the California School Employees Association—a union for public school employees—and the Service Employees International Union—which represents service workers, including those in property services.

Those opposed include the California Rental Housing Association, Disability Rights of California—the largest disability rights group in the nation—and faith-based, justice advocacy, and law center groups, according to a recent Senate analysis.

Rudy Blalock is a Southern California-based daily news reporter for The Epoch Times. Originally from Michigan, he moved to California in 2017, and the sunshine and ocean have kept him here since. In his free time, he may be found underwater scuba diving, on top of a mountain hiking or snowboarding—or at home meditating, which helps fuel his active lifestyle.