Happy Saturday, Housing Heroes!

One of the last major pieces of rental housing legislation this year is picking up steam in Sacramento and if you own rental property in California, you need to keep this one on your radar.

​SB 681, authored by Senator Aisha Wahab (D‑Fremont), just passed the state Senate in a 28–10 vote. It’s now heading to the Assembly, where it will go through two key committees: Housing and Community Development and Judiciary.

What does that mean for you? If you're a landlord who charges tenants additional fees for anything from application screening to online rent payments — this bill could cut off a key way to recover your operating costs.

Let’s break down what SB 681 targets, why it’s gaining traction, and what you should be doing now to prepare.

What’s SB 681 All About?

At its core, SB 681 aims to eliminate or heavily restrict certain “non-rent” fees that housing providers commonly charge tenants. Here’s what’s on the chopping block:

• Application & Screening Fees: These cover credit checks, background checks, and administrative processing. Currently capped under existing law, SB 681 could impose additional limits on how and when they can be charged.
• Convenience Fees: These are add-ons for tenants paying rent by credit card, online portal, or other third-party systems. Many landlords use these to pass through processing costs, SB 681 could prohibit that.
• Administrative or Lease Setup Fees: Charges for preparing leases, verifying documentation, or onboarding new tenants. These are often used to offset staff time and third-party service costs.
• Service Pass-Throughs: Fees for trash, pest control, landscaping, or other recurring services that aren’t bundled into rent, especially if unitemized. These may be restricted or need to be disclosed more explicitly.
• Other “Junk Fees”: Legislators are targeting any charge that’s not clearly spelled out, optional, or tied directly to rent especially ones that feel like “nickel and diming.”

This bill would effectively force landlords to roll these charges into base rent even if they’re voluntary or third-party costs. That limits your flexibility and could increase compliance risks if you’re not prepared.

Why Is This Happening?

The backers of SB 681 and the broader “junk fee” crackdown say the goal is consumer protection:

• Clarity: Renters often report being surprised by add-on charges after signing a lease.
• Affordability: In a state where many are rent-burdened, even $10–$50/month in fees can make a difference.

What You Need to Know as a California Landlord

If you charge any fee that’s not explicitly labeled as rent — or pass along costs to tenants — you’ll want to get ahead of this:

1. Audit Your Leases

Go line-by-line and identify every non-rent charge: screening, convenience, service, administration, etc. If it’s not tied to the monthly rent total, it’s likely at risk.

2. Communicate Clearly

Whether or not the bill passes, the trend is toward full transparency. Make sure every charge is disclosed upfront in listings, lease drafts, and move-in materials.

3. Watch for Implementation Deadlines

While SB 681 isn’t law yet, it could take effect as early as January 2026. That gives you a narrow window to revise practices, update documentation, and retrain staff or property managers.

The Bigger Picture

SB 681 is just the latest in a series of proposals that are reshaping the landlord-tenant relationship in California. From rent caps and eviction protections to fee restrictions, the message is clear: Expect more oversight and less flexibility.

If you operate at scale 5, 10, or 50 units these fees aren’t pocket change. Losing $25–$50/month per unit in pass-throughs could mean thousands in lost revenue per year.

Now’s the time to update your systems, clean up your lease language, and tighten your margins where you can.

Want to read the full bill update? Click here →​

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Steve Welty CEO @ Good Life Property Management DRE #01744610 ​​​​

5252 Balboa Ave #704, San Diego, California 92117
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