SB1157 is a first in the nation bill requiring landlords who receive local, state or federal housing subsidies to offer their residents the option of having their rental payments reported to a consumer reporting agency.
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Who has to comply with the bill?
SB 1157 requires California landlords who own/operate assisted housing developments to offer each tenant in a subsidized unit the option of having their rental payments reported to the credit bureaus.
An assisted housing development is any multifamily rental housing development that receives governmental assistance through the programs listed in Section 65863.10 of California Government Code (here)
Landlords of dwellings with 15 or less units are exempt, unless the landlord owns two or more assisted housing developments and is REIT, corporation, or LLC (no matter the number of total units).
When does the bill take effect?
- The bill goes into effect on July 1, 2021. At this time, residents new to an assisted housing development must be offered the opportunity to opt-in to rent reporting at the time of signing the lease, and at least once annually thereafter.
- By October 1, 2021, all residents of assisted housing developments must be offered the opportunity to opt-in to rent reporting, and at least once annually thereafter.
- The legislation sunsets July 1, 2025
What’s required of landlords?
Landlords must provide information to their tenants about rent reporting at the time of lease agreement and then at least once per year that includes:
- A statement that the tenant may opt into rent reporting at any time following the initial offer by the landlord, instructions on how to opt-in, and assurance that opting-in is optional.
- A statement that the tenant may elect to stop rent reporting at any time, but that they will not be able to resume rent reporting for at least six months after their election to opt out, and instructions on how to opt out.
- Identification of each consumer reporting agency to which rental payment information will be reported.
- Information on how on-time and late rental payments will be reported
- The cost to the resident (if any)
What Rights do Residents Have?
- Residents may opt in and opt out of rent reporting at any time.
- Once a resident opts out, there is a six months “cooling off” period until they can re-enroll in rent reporting.
- The bill protects tenants who may make deductions or withhold rent in accordance with their rights. These do not constitute a late payment.
Can I charge my residents for the cost of reporting?
Acknowledging that there may be a cost to reporting, landlords can cover the costs or charge residents the lesser of $10 or the actual cost of the service. The fee itself may not be reported. If the fee goes unpaid by the resident, the landlord can terminate reporting of their rental payments to the credit bureaus after 30 days.