California’s AB 1963 has evolved into a more consequential rental application bill than its title alone may suggest. As amended on March 16, 2026, the bill would no longer merely allow landlords to accept reusable reports at their discretion. Instead, it would require landlords to accept a portable screening report from a tenant screening company approved by the California Department of Housing and Community Development (HCD), provided the report meets the bill’s criteria. The bill was introduced on February 13, 2026, and as of March 31, 2026, it was set for its first committee hearing, but that hearing was canceled at the author’s request.

What Changed in the Latest Version

One of the most important recent changes is that AB 1963 would repeal the current reusable tenant screening report framework and replace it with a new mandatory system for portable screening reports. Under the amended bill, a portable screening report would need to be dated within 45 days of submission, comply with applicable laws, be obtained with the tenant’s written authorization, and cost the prospective tenant no more than $45. The bill would also require HCD to establish and maintain a publicly accessible list of approved tenant screening companies and to review and update that list at least annually.

Loss of Cost Recovery

For housing providers, one of the clearest negative impacts is the loss of direct cost recovery tied to screening. If a tenant provides a qualifying portable screening report, the landlord would be prohibited from charging an application fee, a screening fee, a fee to access, review, or process the report, or any other fee associated with the rental application. That means owners and managers may still bear internal leasing and review costs while losing the ability to offset those costs through customary application-related charges.

Reduced Control Over Screening Standards

The latest language would also reduce landlord control over the screening process itself. AB 1963 would prohibit a landlord from requiring the applicant to undergo or pay for an additional background check, credit check, or tenant screening if the applicant provides a compliant portable screening report. In practice, that could prevent housing providers from relying on their preferred screening vendors, internal workflows, or integrated property management systems. For operators who prioritize uniform standards across portfolios, this change could make applicant evaluation less consistent and less predictable.

New Disclosure and Advertising Requirements

Recent amendments also add compliance obligations at the very start of the leasing process. A landlord would have to advise prospective tenants in the advertisement for a dwelling unit and again before accepting any application materials that the landlord must accept portable screening reports and cannot charge specified application-related fees when such a report is provided. In addition, before accepting any application materials, the landlord would have to provide a complete and itemized written disclosure of all application requirements in a clear, plain-language, standardized format prescribed by HCD.

Higher Compliance and Litigation Risk

The bill’s updated language increases legal exposure in several ways. If a landlord rejects an applicant after reviewing a portable screening report, the landlord would have to provide the applicant, within three business days, with the specific reasons for rejection in writing, identify the criteria not met, comply with federal adverse action notice requirements, and inform the tenant of the right to dispute inaccurate information. The bill also states that violations can trigger civil liability, including actual damages, statutory damages of $2,500 per violation, attorney’s fees and costs, and other court-ordered relief.

Unfair Competition and Enforcement Concerns

Beyond private lawsuits, AB 1963 would raise the enforcement stakes by specifying that certain violations constitute unfair competition and by authorizing the Attorney General to bring civil actions for violations. That gives the bill broader enforcement reach than a simple procedural rental application law and could make even inadvertent noncompliance more costly for housing providers.

Concerns Around Screening Tools and AI

Another recent feature of the bill is its treatment of automated decision-making. AB 1963 would prohibit rejecting an application based solely on a score, recommendation, or rating generated by an automated system, algorithmic tool, or artificial intelligence unless the tool uses factors empirically related to tenancy performance and is periodically tested to ensure it does not create a disparate impact on protected classes. For housing providers using software-assisted screening tools, this adds another layer of compliance review and potential liability.

Bottom Line for Housing Providers

AB 1963 has become more than a tenant convenience measure. In its latest amended form, it would shift more control over the screening process away from housing providers, eliminate several fee-based cost recovery options, add new advertising and disclosure requirements, restrict supplemental screening, and create meaningful exposure to lawsuits, statutory damages, and public enforcement. With the bill’s first hearing canceled as of March 31, 2026, there is still time for amendments, but housing providers should watch this measure closely because the current version would materially change how rental applications are handled in California.

This article has been prepared by the editorial staff of Apartment News Publications, Inc. (ANP) intended for informational purposes only and does not constitute legal advice. Readers should consult with qualified counsel regarding their specific circumstances. ANP, Covering Issues That Impact Rental Property Owners and management professionals.