AB 1248 California Assembly · 2025-2026 Regular Session

Hiring of real property: fees and charges.

Summary

Existing law regulates the hiring of real property and imposes various requirements on landlords relating to the application for, and leasing of, residential rental property. Existing law prohibits a landlord or its agent from charging a tenant a fee for serving, posting, or otherwise delivering a notice of termination of a hiring of residential property, as specified. Existing law also prohibits a landlord or its agent from charging a tenant any fee for payment by check for rent or security deposit, as provided. This bill would require on or after April 1, 2026, a landlord or landlord's agent who advertises, displays, or offers residential property for rent to include in any advertisement, display, or offer the price, including all required fees or charges, and a description of all available optional housing services, as defined, including the associated fees for each optional housing service. This bill would prohibit a landlord or landlord's agent from using a ratio utility billing system to allocate, demand, or collect fees or charges from a tenant, except for fees or charges for water or sewer service, as provided. The bill would prohibit the landlord from charging any fee or charge other than required fees and charges, as defined, and fees or charges for optional housing services. This bill would also require that any payment received from, or on behalf of, a tenant be applied to rent, rental debt, and any outstanding fees in a specified order, and would prohibit late fees from being charged to a tenant whose only delinquency is attributable to nonpayment or late payment of a late fee. The bill would specify that a decrease in housing services, as defined, is an increase in rent. The bill would provide that a landlord or landlord's agent who violates these provisions is liable to a tenant in a civil action for damages, including treble damages. The bill would provide that its provisions do not prevent a landlord from recovering damages otherwise permitted by law. The bill would establish a 3-year statute of limitations to bring an action under these provisions. The bill would provide that a waiver of its provisions is contrary to public policy and void and unenforceable, and the bill's provisions are severable.

Issues: ✓ Housing

Bill status died 1 of 4 stages cleared

Introduction

Feb 2025

Committee Review

Floor Vote

Governor

Introduced Feb 21, 2025 Last action Feb 2, 2026

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What changed between versions

03/24/25 - Amended Assembly → 06/02/25 - Amended Assembly · 16 edits · Jun 2, 2025

MAJOR

AB 1248 was substantially restructured between the March 24 and June 2 amendments. The entire amendment to Civil Code Section 1946.1 (which provided extended notice protections for qualified commercial tenants such as small restaurants and nonprofits) was removed. In its place, a new section was added requiring landlords to advertise the full price of rent including all required fees and to describe optional housing services with their costs, effective April 1, 2026. The ratio utility billing provisions were also tightened significantly, now prohibiting ratio billing for all utilities except water and sewer, with new detailed disclosure and allocation requirements.

Scope change

The bill's scope narrowed by removing all commercial tenant notice protections (Section 1946.1 amendments) and expanded by adding a new advertising transparency requirement for rental listings effective April 1, 2026, plus significantly tightened restrictions on ratio utility billing (now limited to water and sewer only with detailed disclosure requirements).

SCOPE

The entire amendment to Civil Code Section 1946.1 was deleted. This had provided extended notice periods (60 days for landlords, with 30-day exceptions) for qualified commercial tenants including microenterprise restaurants with fewer than 10 employees and nonprofits with fewer than 25 employees, along with related definitions and procedural requirements.

A new legislative findings section was added stating the purpose is to ensure tenants have a clear understanding of total monthly rental costs and to promote housing stability, trust, and a level playing field among landlords.

REQUIREMENT

New advertising requirement effective April 1, 2026: landlords must include in any advertisement, display, or offer the full price including all required fees or charges, and a description of all available optional housing services with their associated fees. The price must be significantly more prominent than any individual fee.

Ratio utility billing is now prohibited for all utilities except water and sewer. Previously it was permitted for trash, water, sewer, natural gas, liquid propane gas, and electricity if certain conditions were met. The new rule is a blanket prohibition with only a water/sewer exception.

New detailed requirements for water and sewer ratio billing: landlords must deduct common area costs (the greater of 20% of total bills or actual separately-metered common area costs), must include the highest monthly water/sewer cost in advertised prices for new tenancies, must provide two most recent bills to prospective tenants before accepting any payment, must disclose allocation percentages and formulas, and must allow tenant inspection of records (up to 4 requests per 12-month period).

A landlord or agent shall not charge any fee or charge except required fees and charges and fees for optional housing services. This is a broader prohibition than the prior version which listed specific permitted categories.

A landlord or agent shall not use a tenant's failure to pay for an optional housing service as a basis for termination of tenancy.

For dwelling units subject to gross rental rate increase limits under Section 1947.12, any new required fee or charge, any new fee for optional services previously included in rent, and any increases to existing fees must comply with the rent cap when combined with other increases.

An exception allows a landlord to charge a new required fee for water when converting from a ratio utility billing system to water submeters.

DEFINITION

A new definition of 'optional housing service' was added with seven criteria: not required by law, not a condition of tenancy, freely selectable on an opt-in basis, cancelable with 30 days notice, reasonably available from other sources, not within or physically connected to the dwelling unit, and not unilaterally cancelable by the landlord except for nonpayment or discontinuation.

A new definition of 'required fee or charge' was added: any fee required by the landlord to be paid for use or occupancy of the property, for housing services, or as a condition of tenancy.

The definition of 'housing services' was expanded to include services provided 'by or on behalf of' the landlord, added 'enjoyment' alongside use and occupancy, added services 'required to be provided by law or that are a condition of tenancy,' and added 'parking,' 'access to common areas,' and 'security' to the list.

The definition of 'ratio utility billing system' was updated to include 'water heating' as a covered utility and to exclude 'submeters, or a flat fee' as alternative billing methods (previously only excluded individual meters).

TIMELINE

The statute of limitations for bringing a civil action under the new advertising section was set at 3 years (down from 4 years in the prior version of the fees-and-charges section).

ENFORCEMENT

The waiver provision now states rights are 'void and unenforceable' (previously just 'void') and adds that the section 'shall be construed liberally to effect its purpose of protecting the public.'

FISCAL

Fiscal committee review and state-mandated local program designation were both changed from 'yes' to 'no,' removing the finding that the bill imposed a state-mandated local program through expansion of perjury.

02/21/25 - Introduced → 03/24/25 - Amended Assembly · 10 edits · Mar 24, 2025

MAJOR

The amended version of AB 1248 adds an entirely new Section 1950.2 to the Civil Code that comprehensively restricts what landlords can charge residential tenants in fees and charges, going far beyond the original bill which only addressed notice requirements for qualified commercial tenants. The new section caps allowable fees for both new tenancies (starting January 1, 2026) and existing tenancies, imposes transparency requirements on utility billing and rent discounts, establishes a payment application order, and creates civil remedies including treble damages for violations. The original commercial tenant notice provision was also modified to expand the nonprofit employee threshold from fewer than 20 to fewer than 25 employees.

SCOPE

Entirely new Section 1950.2 added to the Civil Code, creating a comprehensive framework restricting what fees and charges landlords may impose on residential tenants. This transforms the bill from a narrow commercial tenant notice measure into a broad residential tenant fee protection law.

ELIGIBILITY

For new tenancies beginning on or after January 1, 2026, tenants are only obligated to pay rent plus: security deposits (if disclosed in advertisements), rent stabilization fees passed through from government, submetered water charges, and late fees otherwise permitted by law. No other fees are allowed.

For existing tenancies that began before January 1, 2026, tenants may also be charged fees that were in place at the start of the tenancy (so long as they do not increase) and ratio utility billing system charges, provided specific conditions are met including monthly transparency reporting, no profit-taking over a 12-month period, and no shifting of costs due to vacancy.

The nonprofit employee threshold for 'qualified commercial tenant' status under Section 1946.1 was increased from fewer than 20 employees to fewer than 25 employees, expanding which nonprofits qualify for the extended notice protections.

REQUIREMENT

If a tenant receives a discount on rent or fees in exchange for signing a rental agreement, the agreement must clearly state on the first page when the discount ends, the total amount owed after the discount expires, and the date the full amount first applies. The landlord must also provide 60 days' notice before the discount ends.

Payments from tenants must be applied in a specific order: first to current month's rent, then to rental debt less than 12 months past due, then to other fees, then to any other obligation. Late fees cannot be charged if the only delinquency is nonpayment of a previously charged late fee.

A decrease in housing services is explicitly defined as an increase in rent, meaning landlords cannot reduce services (like removing trash collection or pest control) without it being treated as a rent increase subject to applicable rent increase limits.

DEFINITION

Defines 'housing services' broadly (trash, utilities, elevator, storage, laundry, repairs, pest control, etc.), 'ratio utility billing system' (allocation of utility costs through any method other than individual meters), and 'rent' as a single periodic payment plus all nonmonetary consideration for use of the unit.

ENFORCEMENT

Landlords who violate the new section are liable for actual damages (minimum $1,000), injunctive and declaratory relief, attorney's fees, and treble damages if the violation was willful, oppressive, fraudulent, malicious, or recklessly negligent. A 4-year statute of limitations applies.

TECHNICAL

Fiscal note changed: 'Fiscal committee' and 'State-mandated local program' both changed from 'yes' to 'no,' reflecting that the amended bill no longer imposes a state-mandated local program (the original perjury expansion language was removed).

Floor votes

How they voted

No floor votes recorded yet.

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

Jun 2, 2025

Lower · Passed

Read third time and amended. Ordered to third reading. (Page 1953.)

lower

Apr 22, 2025

Lower · Passed

From committee: Do pass. (Ayes 8. Noes 3.) (April 22).

lower

Mar 27, 2025

Lower · Passed

In committee: Hearing postponed by committee.

lower

Mar 25, 2025

Committee

Re-referred to Com. on JUD.

lower

Mar 24, 2025

Introduced

From committee chair, with author's amendments: Amend, and re-refer to Com. on JUD. Read second time and amended.

lower

Mar 13, 2025

Committee

Referred to Com. on JUD.

lower

Feb 22, 2025

Lower · Passed

From printer. May be heard in committee March 24.

lower

Feb 21, 2025

Introduced

Introduced. To print.

lower

1 primary · 0 co-sponsors