As a landlord in Merced, California, navigating the rental application process can feel overwhelming. California has some of the most comprehensive landlord-tenant laws in the nation, and understanding your obligations is essential to avoid legal pitfalls while ensuring a smooth tenant placement process. From screening guidelines to security deposit rules, Merced landlords must stay compliant with both state regulations and local requirements. At Chosen Property Management, we help landlords simplify these complex laws so you can focus on what matters most: building a successful and stress-free rental business.
Key Takeaways
Fair Housing Laws Apply to All Applications – Discrimination based on protected classes is strictly prohibited.
Tenant Screening Has Legal Limits – Background, credit, and income checks are allowed but must follow California guidelines.
Application Fees Are Regulated – Landlords can charge application fees, but they must comply with state-imposed caps.
Security Deposit Rules Are Strict – California law clearly outlines collection, use, and return of deposits.
Transparency and Documentation Protect Landlords – Written criteria and proper records safeguard you against disputes.
Understanding Fair Housing Compliance
The foundation of California rental application laws lies in federal and state fair housing protections. Under the Fair Employment and Housing Act (FEHA) and the federal Fair Housing Act, landlords cannot deny applicants based on race, color, religion, sex, national origin, disability, familial status, sexual orientation, or other protected classes.
In Merced, these protections extend to local ordinances that may add categories such as source of income (including housing vouchers).
Tip for landlords: Always establish clear, objective tenant screening criteria and apply them consistently to every applicant. For example, if your income requirement is three times the rent, this must apply equally to all applicants without exception.
Tenant Screening Laws in California
Tenant screening is a critical step, but it comes with strict regulations. Landlords in Merced must follow state laws when evaluating an applicant’s background:
Credit Checks – Permitted, but landlords must obtain written consent. If an application is denied due to credit, you must provide an adverse action notice.
Criminal Background Checks – California law limits blanket bans on criminal history. You may only consider convictions that directly affect tenant suitability, and “ban-the-box” laws prohibit asking about convictions upfront.
Income Verification – Landlords may request pay stubs, bank statements, or employment verification. However, they must not discriminate against applicants using Section 8 housing vouchers or other legal income sources.
Application Fees and Legal Limits
California allows landlords to charge an application fee, but this amount is capped and adjusted annually for inflation. As of 2025, the maximum fee is around $62 per applicant (verify the current rate before charging). Landlords must also provide a receipt and return any unused portion if the cost of screening is less than the fee collected.
Pro tip: Clearly state your application fee policy in your rental listing and application forms to avoid disputes and maintain transparency.
Security Deposit Guidelines
Security deposits are tightly regulated under California law. For residential properties, landlords may collect:
Up to two months’ rent for unfurnished units.
Up to three months’ rent for furnished units.
Additionally, landlords must return deposits within 21 days after a tenant moves out, along with an itemized statement of deductions (if applicable). Failure to follow these rules can lead to penalties, including potential liability for twice the deposit amount in bad faith cases.
Written Rental Criteria and Documentation
One of the best protections for landlords is maintaining clear documentation. This includes:
A written rental policy that outlines application requirements.
Copies of adverse action notices when rejecting applicants.
Receipts for all application fees.
Copies of the tenant’s signed consent for credit and background checks.
By keeping organized records, Merced landlords reduce the risk of disputes and demonstrate compliance with California rental application laws.
Local Considerations for Merced Landlords
While state laws govern most application requirements, Merced landlords should also pay attention to local ordinances. These may address issues like rental housing standards, inspection requirements, or additional protections for tenants. Staying informed about both state and local laws ensures you remain compliant on every level.
FAQs About California Rental Applications
1. Can I deny an applicant based on low credit?
Yes, landlords may deny applicants for poor credit history as long as they apply the same standard consistently. However, you must issue an adverse action notice explaining the reason.
2. Are pet restrictions allowed during the application process?
Landlords may restrict pets, but they must make reasonable accommodations for service animals and emotional support animals, even if a property is advertised as “no pets.”
3. How can I legally verify income?
You can request documents like pay stubs, tax returns, or bank statements. However, you must also accept legal sources of income such as housing vouchers, Social Security, or disability payments.
Your Next Steps Toward Stress-Free Leasing
For landlords in Merced, California, understanding and following rental application laws is essential to operating a compliant and profitable rental business. From fair housing protections to screening guidelines, every step in the application process carries legal responsibilities. Failing to comply can result in lawsuits, fines, or delays in filling vacancies.
At Chosen Property Management, we specialize in guiding landlords through these complexities. With our expert knowledge of California rental laws and local Merced regulations, we handle the rental application process efficiently and legally—protecting your investment while ensuring fair treatment of applicants.
For more guidance on managing your rental property in Merced, contact us at Chosen Property Management and discover how our team can help you succeed.
