Tenant application fraud has become a serious, and very expensive, problem for California’s mom-and-pop landlords. Fraudulent applicants use fake pay stubs, fabricated bank statements, altered IDs, or even stolen identities to slip through screening, often leading to months of unpaid rent, legal fees, and unit damage before an eviction can be completed.¹⁻³

How Tenant Application Fraud Shows Up

Fraud today is often digital, polished, and hard to spot with the naked eye. Online generators can create realistic pay stubs and bank statements in minutes, and social media makes it easy to invent or exaggerate employment and income.⁴ Rental operators nationwide report that more than 80% have seen falsified income documents and misrepresented information in recent years, and a large majority have encountered identity-related fraud.² These problems hit small owners hardest because they usually do not have in-house compliance staff, fraud tools, or the cash reserves that larger institutions rely on to absorb losses.

What Modern Tenant Screening Services Provide

Third-party tenant screening services are one of the most effective tools mom-and-pop landlords can use to fight application fraud. These platforms typically bundle three core components: a consumer credit report, a nationwide or multi-state criminal background check, and an eviction or housing court history search.⁵⁻⁷ Many also add identity verification, income-estimate tools, and automated reference checks to flag inconsistencies between what the applicant wrote and what third-party data shows.⁵⁻⁷ For example, TransUnion’s SmartMove uses a rental-specific “ResidentScore” designed to predict evictions more accurately than a generic credit score in the riskiest bands.⁸

Most services are set up so an applicant receives a link, enters their information, and authorizes access to their credit and background data; the landlord then receives a report, usually within minutes.⁵⁻⁷ This direct-from-bureau workflow reduces the risk that the applicant is handing over a doctored PDF or self-edited “credit report.”⁶

What Screening Services Cost

Pricing is generally per-applicant and, crucially for California owners, must fit within state limits on application fees. Basic tenant-paid packages with a credit, criminal, and eviction check frequently run in the mid-$20s to mid-$40s per applicant, depending on scope.⁵⁻⁷ For example, one widely used service lists packages around 25 to 47 dollars per screening, with the exact price tied to whether you choose only basic background data or a full credit report with income score.⁵ Another survey of major screening platforms shows many charging roughly 24.99 to 44.99 dollars per applicant for standard or premium bundles.⁷ Some platforms (such as RentSpree) are structured so the landlord pays nothing up front and the applicant pays a standard fee of about 45 to 55 dollars, depending on the landlord’s account type.⁵

For small owners, the practical takeaway is that a thorough screen typically costs less than a single day’s market rent but can help avoid tens of thousands of dollars in later losses. A consistent, policy-driven practice—“no lease without a third-party screen”—also supports fair housing compliance.

California Limits on Application Fees

California Civil Code section 1950.6 allows a landlord to charge an “application screening fee,” but only within tight limits.⁹ The fee cannot exceed the actual out-of-pocket cost of gathering information (including the screening service or credit report) plus the reasonable value of the landlord’s time reviewing it, and in no case can it exceed the statutory cap (originally 30 dollars, annually adjusted by the Consumer Price Index).⁹ California rental industry guidance calculates that, after CPI adjustments, the maximum legal screening fee as of late 2023 is just over 62 dollars per applicant, and some 2025 estimates place the cap in the mid-60-dollar range.¹⁰⁻¹¹ In addition, landlords may only charge the fee if they are actually going to consider that application, and must refund any fee taken inadvertently for an application that is never reviewed or screened.⁹

In practice, most professional California managers set their fees between about 30 and 45 dollars per applicant to stay competitive while keeping within the legal maximum and covering the cost of a quality screening package.¹¹ For mom-and-pop landlords, the key compliance points are: charge no more than your real screening cost up to the statutory cap; document what you paid the vendor; provide a receipt; and promptly refund any fee if you never run the check or consider the application.

Disclaimer

The information provided in this article is for discussion purposes only and should not be construed as tax, legal, or financial advice. Readers are encouraged to consult with their own qualified tax and legal advisors regarding their individual circumstances.

Written by Wesley V. Wellman

Wesley V. Wellman has been active in the financial services field for more than 40 years. His brokerage firm, Wellman Realty Company, specializes in multi-family and commercial investment property. Since the year 2000, Mr. Wellman has sold over $342 million of investment property. He is a Santa Monica apartment industry leader and is frequently quoted in the local press about rental property issues. He is one of the founding directors of the Action Apartment Association, which was formed in 1980. As an advisor, Mr. Wellman draws on a wealth of educational background in real estate, taxation, securities and estate planning.

Footnotes / Sources

1. Discussion of rental application fraud patterns and risks for small landlords.​Single key

2. NMHC Pulse Survey data on falsified pay stubs, misrepresented information, and identity fraud in rental applications.​

3. General description of application fraud using fake documents, stolen identities, and online tools.​ Single key

4. Explanation of online fake pay stub and bank statement generators used by renters. Single key

5. RentSpree overview of tenant screening components and pricing (45–55 dollars, tenant-paid; landlord can elect to pay).​

6. RentPrep and other tenant-screening reviews summarizing typical bundled services and per-applicant pricing ranges (about 24.99–44.99 dollars).​

7. Survey of leading screening services listing credit, criminal, eviction, and identity tools in standard/premium packages.​ Rent Prep

8. TransUnion SmartMove description of ResidentScore and landlord/applicant payment options.​ My Smart Move

9. California Civil Code §1950.6 text: authorization of application screening fees, definition of allowable costs, and CPI-adjusted statutory cap.​ Law Jvstia

10. California Apartment Association guidance on the maximum permissible screening fee and CPI adjustment (original 30 dollar cap, adjusted to about 62.02 dollars by December 2023). Caanet

11. East Bay property manager guidance on 2025 maximum screening fee (about 64.50 dollars) and common practice of charging 30–45 dollars per applicant. Stowers areal Estate

This article is for informational purposes only and is not legal advice. Laws vary and change over time, so readers should consult a qualified attorney or professional before relying on this information