Legal Question in Real Estate Law in California

Re: rental application fee

Rental application screening fees are regulated by statute - see Civil Code section 1950.6. They are nonrefundable because the statute permits them to be nonrefundable; they are supposed to cover the landlord's cost of doing a credit and background check.

The fee isn't always $25; in fact, the statute allows the fee to be as high as $30 with consumer price index adjustments from 1/1/1998. However, the fee is further limited to the landlord's actual cost, and I suppose the great number of $25 charges you may see is due to that being the current established price of one or more landlords' service providers or credit bureaus.