California Junk Fee Prohibition — What Landlords Can & Cannot Charge (2026)

What Is SB 611 and Why Does It Matter?

On January 1, 2024, Senate Bill 611 took effect in California, amending Civil Code §1946.2 to ban "junk fees" in residential tenancies. For self-managing landlords, this law fundamentally reshapes what you can charge tenants—and the penalties for getting it wrong are real enough to merit immediate attention.

Junk fees are charges that lack transparency, are hidden in fine print, or don't represent a legitimate reimbursable cost or service. Unlike security deposits or rent, they're often small ($25–$75 each) but add up across a portfolio, and they're increasingly the target of tenant advocacy groups and legal aid organizations in California.

The statute doesn't define "junk fee" explicitly. Instead, it establishes a framework: landlords may charge rent, security deposits, and "legitimate" fees directly tied to actual landlord costs or services. Everything else is presumed illegal. That burden-shift is critical. You're not proving you can charge a fee; tenants are proving you shouldn't.

The Legal Standard: What Fees Are Prohibited Under SB 611?

Blanket Prohibitions

Civil Code §1946.2(g) explicitly bans the following:

• Application screening fees for tenants in excess of the actual cost of the screening (credit check, background check, reference calls)
• Holding deposits that aren't credited toward rent or security deposit
• Administrative fees that don't correspond to a real service (e.g., "lease processing fee," "file maintenance fee," "administrative handling charge")
• Fees for normal wear and tear deducted from security deposits (overlap with existing law, but reinforced)

Vague Fees That Courts Treat as Junk Fees

California courts and enforcement agencies (primarily the California Attorney General's office and local district attorneys) have found the following charges presumptively illegal:

Fee Label	SB 611 Status	Why It Fails
Document preparation fee	Prohibited	Preparing a lease is landlord's core duty; not tenant's cost
Key replacement fee (fixed, not actual cost)	Prohibited	Must match actual replacement or rekeying cost, not a standard surcharge
Pet deposit vs. pet fee	Deposits OK; non-refundable fees prohibited (with exceptions)	Non-refundable pet fees lack transparency; California treats them as junk
Lease renewal fee	Prohibited	Landlord benefit; no compensable tenant cost
Credit check (covers actual cost)	Permitted	Must not exceed actual fee paid to credit bureau
Late rent penalty (clearly disclosed, reasonable)	Permitted	If tied to real late costs or as liquidated damages, and disclosed in lease

What Fees Can You Legally Charge?

Legitimate Rent-Related Fees

Late fees: California law (Civil Code §1671) permits late rent fees only if they're "reasonable" and not a "penalty." Courts typically allow 5–10% of monthly rent or a fixed amount ($25–$50) if clearly disclosed in the lease and calculated consistently. The fee must reasonably approximate the landlord's costs (administrative handling, loss of interest, collection effort). Fees exceeding 10% of rent face scrutiny under SB 611.

Returned check fees: You may charge tenants for the actual cost of a returned check (typically $15–$35) if the lease discloses it. The charge must reflect your bank's fee plus reasonable administrative time.

Utility overage fees: If the lease makes the tenant responsible for utilities and they exceed the baseline, you may pass through the overage if the lease specifies this arrangement upfront and itemizes the calculation.

Move-In and Application Fees (With Limits)

Screening fees: You may charge for actual background checks, credit reports, and reference verification—but the total may not exceed the actual third-party cost. If a credit check costs $18 and a background check costs $32, your charge is capped at $50. Many landlords charge a flat $50–$75; if your actual cost is lower, you're likely in violation.

Move-in inspection fees: California allows a move-in walk-through and itemized condition report (Civil Code §1950.7) at no charge to the tenant. However, if you hire a professional inspector, you may pass that cost to the tenant only if disclosed in the lease and reasonable in amount. This is a gray area; best practice is to absorb the cost or disclose it explicitly as a one-time fee tied to a specific invoice.

Reimbursable Costs (With Documentation)

Actual repair and maintenance: If a tenant damages property beyond normal wear and tear, you may deduct repairs from the security deposit or charge the tenant directly (with proper notice and itemization). This is separate from junk fees—it's damage liability. You must provide an invoice or receipt proving the cost.

Lock rekeying: If a tenant loses keys or fails to return them, you may charge the actual cost of rekeying, not a flat $100 "key replacement fee." If rekeying costs $40, charge $40. If it costs $75, charge $75. Disclose this in the lease to avoid disputes.

Lease violations and remediation: Some leases charge fees for lease violations (unauthorized occupants, pet violations, smoking). SB 611 permits these only if the fee is reasonable and tied to landlord costs (e.g., odor remediation, pest control). A $500 smoking violation fee without itemization is junk. A $150 fee for professional odor removal with an invoice is legitimate.

Penalties for Violating SB 611

Civil Liability

Civil Code §1946.2(i) imposes the following penalties:

• $100–$1,000 per violation — a single junk fee charge = one violation; if you charge 5 junk fees, that's 5 violations
• Tenant attorney fees — if the tenant sues and wins, you pay their attorney costs
• Treble damages (3x) — if the tenant proves willful, intentional, or bad-faith violation, they may recover 3 times the illegal fee amount plus attorney fees

Example: You charge a $75 "administrative fee" that has no basis in actual costs. The tenant sues. A court finds one violation. You pay $100–$1,000 plus the tenant's attorney fees ($1,500–$3,000 in a contested case). If the court finds the violation was willful, you owe $225 (3x $75) plus attorney fees.

Administrative Enforcement

California's Attorney General and local district attorneys have authority to enforce SB 611. As of 2024, enforcement has been sporadic but growing. Violations reported by tenant advocates or legal aid organizations can trigger:

• Cease-and-desist letters from the AG's office
• Restitution orders requiring refund of all junk fees collected from tenants
• Civil penalties beyond what individual tenants can sue for

For small landlords (2–75 units), enforcement risk is lower if violations are isolated, but if you're systematically charging junk fees across your portfolio, you face material risk of class-action liability or AG intervention.

How to Audit Your Lease for SB 611 Compliance

Step-by-Step Compliance Checklist

1. List all fees in your current lease. Go line-by-line through your lease agreement. Write down every charge—rent, security deposit, late fees, pet fees, application fees, and any other named or implied charges.

2. Assign each fee to a category.

• Statutory fees: Rent, security deposit, last month's rent (if separate). These are always legal.
• Cost-based fees: Screening, key rekeying, repair damage, utility overage. These are legal only if the amount matches actual cost and is disclosed in the lease.
• Liquidated damages fees: Late rent penalties, returned check fees, lease violation remediation. These are legal only if reasonable, clearly disclosed, and tied to landlord costs or legitimate damages.
• Unlabeled or vague fees: "Administrative fee," "document processing," "file maintenance," "lease renewal," "move-in fee." These are presumed junk unless you can document a real, itemized cost.

3. For each cost-based or damages fee, document the actual cost. If you charge a $50 screening fee, provide a copy of your credit check invoice showing $50. If you charge a $40 key rekeying fee, keep a copy of the locksmith's invoice. If you charge a $150 late fee, explain how it approximates your administrative costs or lost interest (10% of rent = $150 on a $1,500 rental, for example).

4. Revise your lease. Remove or relabel any fees that don't pass steps 2–3. For example:

• Before: "Administrative fee: $50"
• After: "Tenant screening fee (covers credit check, background check, reference verification): $50. Landlord will provide itemized receipt upon request."

5. Communicate with existing tenants. If you're currently charging junk fees, you have two options: (1) stop charging them immediately on renewals, or (2) proactively refund tenants who paid them. Refunding is not required by law but reduces litigation risk and demonstrates good faith.

Red-Flag Language to Remove from Your Lease

• "Apartment preparation fee"
• "Lease processing fee"
• "Administrative handling charge"
• "File maintenance fee"
• "Lease renewal fee"
• "Move-in fee" (without specifying what's included)
• "Miscellaneous fee"
• "Document preparation"
• "Application processing fee" (only the actual cost of screening is allowed)

Special Cases: Pet Fees, Deposits, and Utilities

Pet Fees vs. Pet Deposits

California distinguishes between:

• Pet deposits: Refundable amounts held to cover pet damage. Legal under California law, but the deposit is refundable and must be returned if no damage occurs. You may deduct actual damage from the deposit, with itemization.
• Pet fees (non-refundable): Fixed charges for having a pet. SB 611 treats non-refundable pet fees as junk unless you can document a real cost (e.g., professional carpet cleaning, pest inspection). A blanket "$300 non-refundable pet fee" is presumptively illegal.

Best practice: Use refundable pet deposits, not non-refundable pet fees. If you require pet deposits, disclose the maximum amount and the conditions for deduction (damage beyond normal wear and tear, backed by invoices).

Utility Overage and Submetering

If your lease assigns utilities to tenants and charges for overages:

• Submetered utilities: If each unit has its own meter, you may charge tenants for actual usage at the rate you pay the utility provider (or slightly higher to cover administrative overhead, typically $5–$10/month). This is not a junk fee; it's a pass-through.
• Master-metered utilities with tenant responsibility: The lease must specify a baseline and how overages are calculated. A vague "utilities as billed" language risks a junk fee claim if you charge unexplained overages.

How to Document Compliance and Protect Yourself

Lease Language Best Practices

Use clear, itemized language. Example:

Fees and Charges:

Monthly Rent: $1,500, due on the 1st of each month.

Security Deposit: $1,500 (refundable; deductions allowed only for damage beyond normal wear and tear, with itemized invoices provided).

Late Rent Fee: $150 (approximately 10% of monthly rent) if rent is not received by the 5th of the month. This fee is designed to cover administrative and collection costs.

Returned Check Fee: $30, representing the actual bank fee plus administrative handling.

Tenant Screening Fee: $45 (non-refundable), covering the cost of credit report, background check, and reference verification. Itemized invoice available upon request.

Key Replacement: Actual cost of rekeying (typically $40–$75), charged if tenant loses keys or fails to return them.

Record-Keeping Requirements

Maintain documentation for all cost-based fees:

• Screening fees: Keep copies of invoices from your background check vendor showing what you paid for each tenant.
• Repair or remediation fees: Keep invoices from contractors, photos of damage, and itemized descriptions.
• Key rekeying: Keep locksmith invoices tied to specific tenants.

If a tenant challenges a fee or files a small claims action, you'll need to prove your actual cost. Without documentation, you cannot defend the charge.

FAQ: Common Questions About SB 611 Junk Fees

Q1: Can I charge a "move-in fee" to cover cleaning between tenants?

A: No. Cleaning between tenants is a normal landlord cost of doing business. It's not a compensable tenant expense. If your lease says "move-in fee: $200," that's a junk fee under SB 611. However, if the lease specifies "professional move-in inspection and condition report: $85" (with an actual invoice from an inspector), you may have a defensible cost-based fee, though best practice is to absorb this cost.

Q2: I charge $50 for screening. My credit check vendor charges $18. Am I in violation?

A: Likely yes. If your actual cost is $18 (credit check) plus $10 (background check) = $28, charging $50 is $22 too high. You should either charge $28 (or slightly higher, e.g., $32, to account for your administrative time) or itemize the breakdown in your lease and disclose the actual cost to each applicant. Tenants denied based on credit can request a receipt showing what you paid for the check under the Fair Credit Reporting Act; mismatches invite disputes.

Q3: What if I charge a junk fee now but stop before the tenant sues?

A: Stopping doesn't eliminate past liability. If you charged a tenant a $75 "administrative fee" in January 2025 and stop charging it in September 2026, that tenant can still sue for that January fee, plus attorney fees, plus potentially treble damages if they prove willfulness. Proactively refunding or crediting the tenant reduces litigation risk.

Q4: Can I charge a lease renewal fee?

A: No. A lease renewal is a landlord business decision and benefit (continued income, reduced turnover). The tenant is not causing you a compensable cost. SB 611 and case law treat lease renewal fees as junk. If you want higher rent on renewal, use a rent increase; don't charge a separate renewal fee.

Q5: Are holding deposits covered by SB 611?

A: Yes. Civil Code §1946.2(g) explicitly prohibits holding deposits that aren't credited toward rent or the security deposit. If you take a $500 holding deposit and it doesn't reduce the tenant's first month's rent or security deposit dollar-for-dollar, it's a junk fee. Best practice: make holding deposits credit fully against rent or deposit.

Compliance Tools and Resources

Managing fee compliance across multiple units is complex. Several strategies help:

• Standardized lease template: Use one lease version across your portfolio with compliant fee language. Update it annually as law changes.
• Fee audit spreadsheet: List all properties, current fees, and documentation status. Flag any fees without itemized cost justification.
• Compliance engine: Some property management platforms (including LeaseBase's compliance engine) flag non-compliant lease language and alert you to local and state fee restrictions.
• Attorney review: Have a California real estate attorney review your lease annually, especially after new legislation. The cost ($300–$500) is far less than litigating a junk fee claim.

For portfolio-level insights, portfolio management tools can help you track which tenants paid which fees, making it easier to identify patterns and refund junk fees systematically.

Bottom Line: SB 611 Compliance Strategy

SB 611 doesn't forbid landlords from charging fees—it forbids hidden, unjustified, or vague ones. The law shifts the burden: you must prove each fee is reasonable and tied to actual costs or legitimate damages. Ignorance is not a defense.

For self-managing landlords, compliance requires:

1. Audit your current lease. Identify and remove or relabel vague fees.
2. Document actual costs. Keep vendor invoices and receipts for all fee-generating services.
3. Disclose clearly. Write lease language that itemizes what each fee covers and why it's charged.
4. Stop charging indefensible fees immediately. No "administrative," "processing," or "renewal" fees unless you have an invoice proving the cost.
5. Refund past junk fees proactively if possible. This reduces litigation risk and demonstrates good faith.
6. Stay updated on case law. California courts continue to interpret SB 611; new rulings may narrow or clarify what's permissible.

Junk fees seem small individually, but they accumulate across a portfolio and expose you to significant liability. Compliance is not optional—it's the foundation of a defensible rental business.

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Disclaimer

This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney licensed in California for guidance specific to your situation, lease language, or fee structure. Laws and court interpretations change; always verify compliance with current statute and recent case law before implementing or changing tenant fees.