California Junk Fees Prohibited: Which Charges Violate SB 611 — 2026 Compliance Guide

What Is a "Junk Fee" Under California Law?

SB 611, codified in California Civil Code §1946.2, defines prohibited fees as charges that are not essential to the rental relationship. The statute doesn't use the term "junk fees" — that's popular shorthand — but rather targets any charge that fails two strict tests:

1. Not necessary to provide habitable housing (as defined under California habitability standards)
2. Not necessary to collect rent or process rental payments

The law applies to all rental agreements for residential properties in California, including single-family homes, duplexes, and multi-unit buildings. It does not distinguish based on unit count or landlord business model, meaning self-managing landlords with 2–75 units are fully subject to the statute.

Civil Code §1946.2(b) explicitly states: "A landlord shall not demand or receive any fee, other than the following, in connection with a lease or rental agreement: (1) Rent. (2) A security deposit... (3) A pet deposit... (4) A fee for a payment method that [allows the tenant to pay]."

The statute's operative language is "in connection with" — meaning any fee tied to the rental relationship, the lease negotiation, lease renewal, or move-in process is potentially subject to scrutiny.

Specific Prohibited Fees Under SB 611

California courts and the Attorney General's office have published guidance on which fees clearly violate §1946.2. Below is a compliance checklist of fees that self-managing landlords commonly charge and their legal status:

Fee Type	Legal Status	Statutory Reference
Application/Screening Fee (>$49.50 adjusted for inflation)	PROHIBITED if exceeds $49.50	CC §1950.7; adjusted annually for CPI
Non-refundable Pet Deposit	PROHIBITED — all pet charges must be refundable	CC §1946.2(b)(3)
Document Preparation/Processing Fee	PROHIBITED — providing lease documents is part of rent collection	CC §1946.2(a)
Lease Renewal/Amendment Fee	PROHIBITED — part of ongoing lease administration	CC §1946.2; AG Opinion 2020
Utility Setup/Connection Fee	PROHIBITED — utilities are landlord responsibility	CC §1941 (habitability); AG enforcement
Move-In Inspection/Report Fee	PROHIBITED — landlord duty under CC §1950.7	CC §1950.7(e); CC §1946.2
Key Replacement/Lockout Fee	PROHIBITED — landlord cost of maintaining habitable premises	CA AG Opinion; CC §1941
Late Rent Payment Fee (disclosed; reasonable amount)	LEGALLY PERMISSIBLE if reasonable and related to rent processing	CC §1946.2(c); CC §1947.3
Parking/Garage Charge (separate utility)	PERMISSIBLE if directly tied to use of separate amenity	CC §1946.2(b); depends on lease terms
HOA/Condo Fees (passed-through)	PERMISSIBLE if directly tied to unit-specific cost	CC §1946.2(a); landlord cost allocation

Application Fee Limits (Updated 2026)

California Civil Code §1950.7 caps application fees at $49.50, adjusted annually for inflation. As of 2026, the limit remains $49.50. This fee may only cover actual costs of:

• Tenant credit checks
• Background screening
• Income/employment verification

You cannot charge an application fee for processing paperwork, document preparation, or administrative review. If you charge more than $49.50, you violate both §1950.7 and §1946.2.

Pet Deposits: Refundable Only

Civil Code §1946.2(b)(3) explicitly permits a "pet deposit" but does not define it. However, under California law and AG guidance, pet deposits must be refundable. You may charge a non-refundable "pet fee" only if it covers:

• Actual cost of carpet cleaning/replacement due to pet damage (documented)
• Pest control measures (documented and itemized)

Any non-refundable fee labeled "pet fee" or "pet deposit" is presumed refundable unless you can show it covers a direct, documented cost. Charging a blanket non-refundable pet deposit violates §1946.2.

Penalties for Violating SB 611

California provides multiple enforcement mechanisms and penalty structures for junk fee violations. Understanding the exposure is critical for self-managing landlords.

Civil Damages and Attorney Fees

Under Civil Code §1946.2(d), a tenant who is charged a prohibited fee may recover:

• Actual damages (the amount of the prohibited fee)
• Statutory damages up to $2,500 per violation
• Attorney fees and court costs incurred by the tenant

Note the language: "per violation." If you charged a prohibited document fee, a prohibited pet fee, and a prohibited application fee, that is three separate violations. A tenant could claim $7,500 in statutory damages alone, plus attorney fees.

The statute does not require the tenant to prove you acted in bad faith or with intent. Strict liability applies — even accidental or good-faith prohibited fees trigger liability.

Attorney General and District Attorney Enforcement

The California Attorney General actively enforces SB 611. In 2023–2024, multiple enforcement actions resulted in:

• Settlements of $100,000–$500,000+ for systematic junk fee schemes
• Restitution to affected tenants (often years of back fees)
• Injunctions prohibiting future violations
• Public notices naming violating landlords/companies

County district attorneys and city attorneys also prosecute junk fee violations, particularly in larger jurisdictions. In Los Angeles, San Francisco, and San Diego counties, dedicated tenant rights divisions monitor lease terms.

Class Action Exposure

If you charged the same prohibited fee to multiple tenants, you expose yourself to class action liability. A single tenant's attorney can file suit on behalf of all tenants charged that fee within a given period. With 10–75 units and a 5-year lookback window, potential exposure scales rapidly:

• $2,500 statutory damages × 30 tenants charged a prohibited fee = $75,000 minimum
• Plus attorney fees (often $30,000–$100,000+ in class actions)
• Plus restitution of all prohibited fees collected

Which Fees Are Legally Permissible?

SB 611 does not prohibit all fees — it prohibits non-essential fees. The statute explicitly permits:

Rent

The base rent amount charged under the lease. No limit or restriction, but rent increases are subject to state and local rent control laws (if applicable).

Security Deposits and Pet Deposits (Refundable)

Under Civil Code §1950.7(a), security deposits are capped at two months' rent for furnished units and three months' rent for unfurnished units. Pet deposits are refundable and count toward the total deposit cap. You must return all deposits within 21 days of lease termination, minus documented deductions for damage.

Payment Processing Fees

Civil Code §1946.2(b)(4) allows you to charge a fee for payment methods that are convenient to the tenant (e.g., credit card processing, online payment portal). The fee must:

• Be disclosed in the lease
• Be reasonable (typically 2–3% for card processing)
• Be optional (tenant must have a free payment method available, such as ACH transfer or check)

If rent payment is $2,000/month and you charge a 3% credit card fee, the fee is $60. This is legally permissible because it directly covers the cost of payment processing.

Late Fees (Limited and Disclosed)

Civil Code §1947.3 permits late fees if:

• Disclosed in the lease
• Assessed only after a grace period of at least 6 calendar days (or later under lease terms)
• Not more than 5% of the monthly rent or $20, whichever is greater
• Charged only once per late payment period (not compounding daily)

Example: Rent of $2,000/month. The minimum late fee is 5% ($100). You must provide at least 6 calendar days' grace after the due date before assessing the fee.

Utilities and Services (If Separately Metered/Provided)

If you provide utilities (water, gas, trash) directly, you may charge the actual utility cost to the tenant. If the unit has a separate meter, you must provide a billing statement. You cannot charge a markup or administration fee beyond the actual utility cost. If utilities are the tenant's responsibility, you cannot charge a setup fee — the tenant contacts the utility company directly.

Parking and Amenity Charges

If you offer parking, a garage, or other amenities separate from the unit, you may charge for their use, provided the charges are disclosed in the lease and directly tied to the cost of providing that amenity. Parking cannot be bundled into rent and then itemized on a bill as a separate "parking charge" — that is a recharacterization of rent.

How to Audit Your Current Leases for SB 611 Violations

If you have been self-managing for 3+ years, your leases likely contain prohibited fees. Here is a step-by-step process to identify and remediate:

Step 1: Document All Current Lease Clauses

Print or export every lease currently in effect. Create a spreadsheet listing every property, tenant, lease term, and all fees specified in the lease:

• Application fee
• Processing/document fee
• Pet deposit/fee
• Parking fee
• Late fee
• Utilities charged to tenant
• Any other charge labeled as a fee

Step 2: Cross-Reference Against §1946.2

For each fee, ask: "Is this fee necessary to provide habitable housing OR to collect rent?" If the answer is no, the fee is prohibited.

Examples:

• Pet deposit labeled "non-refundable"? Prohibited. Change it to refundable or delete.
• $75 document preparation fee? Prohibited. Delete entirely.
• $150 move-in inspection fee? Prohibited. Provide move-in inspection at no cost (it's your legal obligation).
• $50 application fee with no tenant screening? Prohibited if over $49.50, and you can't use it for administrative purposes.

Step 3: Calculate Your Exposure

For each prohibited fee in your current/recent leases, count how many tenants were charged that fee in the past 3–5 years. Multiply by $2,500 (statutory damages).

Example: You charged a $100 "lease renewal fee" to 15 tenants over the past 4 years. Your potential exposure is 15 × $2,500 = $37,500 in statutory damages alone.

Step 4: Modify Lease Template

Create a compliant lease template that removes all prohibited fees. If you offer permissible fees (late fees, payment processing fees), ensure they are:

• Clearly disclosed
• Compliant with statutory limits
• Separated from rent
• Documented with the actual cost justification

Use LeaseBase Lease Operations or similar software to maintain version-controlled lease templates and ensure consistency across your portfolio.

Step 5: Proactive Notice to Current Tenants

For current tenants under non-compliant leases, you have two options:

• Send written notice immediately removing the prohibited fee — disclose that you will no longer charge this fee, effective immediately or upon lease renewal. This reduces your exposure by showing good faith.
• Wait for lease renewal — propose a new lease without the prohibited fee. Do not unilaterally impose a new lease term; you need the tenant's written agreement.

Do not continue charging a prohibited fee while hoping the tenant doesn't notice. If a tenant becomes aware (or consults an attorney) of the prohibited fee, you lose the good-faith defense.

Step 6: Record-Keeping for Defense

Maintain documentation for every fee charged:

• Lease copies with all fee provisions highlighted
• Records showing which tenants were charged which fees and when
• Receipts or invoices if the fee was tied to a direct cost (pest control, carpet cleaning)
• Payment records showing the fee amount collected

This documentation won't protect you from a violation, but it will help establish the scope of exposure and support your case if you negotiate a settlement.

Specific Compliance Actions for Self-Managing Landlords

Update Your Lease Document Now

If your lease template contains any of the prohibited fees listed in this article, update it immediately. Include only permissible fees:

Example compliant fee provision:

"Tenant may pay rent via check, ACH bank transfer (no fee), or credit card (3% processing fee). Rent is due on the 1st of each month. If rent is not received by the 7th of the month (grace period), a late fee of $150 (5% of rent) will be charged once per late payment period. A security deposit of $[amount] is held and will be returned within 21 days of lease termination, minus documented deductions for damage."

Remove Non-Refundable Pet Fees

If your lease specifies a non-refundable pet fee or pet deposit, remove the word "non-refundable." Replace it with language that makes clear the deposit is refundable unless there is documented damage or unpaid utilities. Example:

"Pet deposit: $[amount], refundable within 21 days of lease termination minus deductions for documented pet-related damage to the unit."

Eliminate Application Processing/Document Fees

Do not charge for lease document preparation, processing, background check report reviews, or administrative work. The application fee (capped at $49.50) covers tenant screening costs only. Anything beyond that is a junk fee.

Disclose All Late Fees in Writing

Before charging a late fee, ensure:

• The lease specifies the grace period (minimum 6 days)
• The lease specifies the late fee amount (no more than 5% of rent or $20, whichever is greater)
• You have provided written notice to the tenant at least 3 days before charging the fee
• The fee is charged only once per delinquency period (not daily)

Provide Move-In and Move-Out Inspections at No Charge

Civil Code §1950.7(e) requires you to provide a move-in inspection (or offer one to the tenant). You cannot charge for this service. At move-out, you must conduct an inspection and provide an itemized deduction list within 21 days. No inspection fee applies.

Maintain Payment Processing Transparency

If you accept credit card or online payments, disclose the processing fee in the lease and on every invoice. Provide at least one free payment method (ACH, check, bank transfer). Never force tenants to pay a credit card fee for rent.

Frequently Asked Questions

Can I charge a tenant for a lost key or lockout?

No. A lockout is a habitability issue (tenant's right to access their unit is a habitability right under CC §1941). The cost of a lock change or key replacement is your responsibility as the property owner. You cannot charge the tenant for maintaining the unit's basic functions, even if the tenant caused the lockout.

If the lease specifies "renter's insurance," that policy may cover lockout assistance, but the primary responsibility is yours.

What if I have an existing lease with a prohibited fee? Can I enforce it?

Legally, no. A lease clause that violates SB 611 is void and unenforceable. However, you cannot simply declare the clause void — the tenant must challenge it (or you can proactively remove it). If you continue to charge a prohibited fee under an existing lease, the tenant can sue for damages and attorney fees.

For ongoing leases, modify the lease at renewal and have the tenant sign a new version without the prohibited fee. Do not unilaterally remove a fee by refusing to enforce it; formally amend the lease with written consent.

Can I charge for utilities if the unit has a separate meter?

Yes, but only the actual utility cost — no markup, administration fee, or convenience fee. You must provide the tenant with a monthly utility bill or statement showing the usage and cost. If you bill the tenant monthly, you must account for the actual utility charges each month.

If the utility is in your name and you're passing the cost through, keep utility bills and reconciliation records. A tenant can challenge an inflated utility bill as a hidden fee.

Is a "renters insurance" requirement a prohibited fee?

No, if properly structured. Requiring renters insurance is legal under California law. However:

• You cannot require the tenant to purchase a policy from a company you own or control
• You cannot charge an administrative fee for managing the insurance requirement
• You must accept proof of insurance (policy certificate) from any licensed insurer
• The cost of the policy is the tenant's responsibility, not a "fee" you collect and pay

If you charge tenants for an insurance policy they must purchase through you, that is a prohibited fee scheme. Require the insurance but let the tenant obtain it independently.

What if I inherited a property with existing leases containing prohibited fees?

You are liable for continuing to enforce those leases. When each lease renews, propose a new, compliant lease without the prohibited fees. If a current tenant sues, the date you acquired the property does not shield you from liability — you are the current landlord and must comply with §1946.2 immediately.

If the property was managed by a third party who charged prohibited fees, consult an attorney about indemnification claims against the prior manager. However, you are still obligated to cease the illegal practice once you take ownership.

Additional Compliance Resources

To stay current on SB 611 enforcement and California fee law:

• California Attorney General's Consumer Protection page — publishes enforcement actions and guidance on junk fees (oag.ca.gov)
• California Apartment Association — releases member alerts on new case law and AG opinions
• City attorneys' offices in major CA cities — Los Angeles, San Francisco, San Diego, and Oakland publish tenant protection guidance specific to local ordinances

Use LeaseBase Compliance Engine to track state and local law changes and receive alerts when new SB 611 guidance is published.

Takeaway: Compliance Is Your Best Risk Management Tool

SB 611 enforcement is accelerating. Self-managing landlords face the same liability exposure as large management companies. A single tenant's attorney can turn one prohibited fee into a six-figure claim if applied across your portfolio.

The compliance step — auditing your leases now, updating your template, and removing prohibited fees — takes 4–8 hours but eliminates years of potential litigation exposure.

The cost of proactive compliance (a few hours and a revised lease) is far lower than the cost of defending a junk fee lawsuit, negotiating a settlement, and managing class action claims from current and former tenants.

Start with your lease template. If prohibited fees are embedded there, they cascade to every tenant. Fix the template, and compliance ripples forward automatically.

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Disclaimer: This article is for informational purposes only and does not constitute legal advice. California landlord-tenant law is complex and subject to local variations. Consult a qualified attorney licensed in California for guidance specific to your property, leases, and tenant situations. Violations of SB 611 and related statutes can result in significant liability; professional legal review of your compliance posture is strongly recommended.