How the New California Supreme Court Ruling Is Going to Affect Rental Screening

Landlords and tenant rental screening providers will need to update their procedures in a timely manner, in order to avoid potentially large fines.

The California Supreme Court recently issued a final decision in Connor v. First Student, a high-profile case involving investigative consumer reports. Although this specific case particularly focused on the industry of employee screening, the ruling will certainly have ramifications in other areas, including rental screening in the housing industry.

New California Ruling Effects Rental Screening

The ruling of the California Supreme Court was actually issued on August 20th, 2018, after a rather long process of deliberation, which led to extensive speculation from the media, and industry insiders alike. This particular ruling can be seen as an extension of the “Investigative Consumer Reporting Agencies Act.”

Among other changes across various industries, it will certainly lead landlords and consumer reporting agencies to adopt new standards when handling personal information and background checks, in order to comply and thus, avoid large fines. For legal experts and commentators who have discussed this particular matter, the California Supreme Court ruling actually represents the current trend in the US and elsewhere around the world, of heightened concern for personal information, privacy and other sensitive documents that might be used unlawfully or without the proper care.

The Possible Nature of Rental Screening

Consumer reports are normally filed under the CCRA and/or the ICRAA according to California law, depending mainly on the way the information was collected and on the nature of the information itself. Sensitive documents include information concerning credit status, personal character, criminal records, and more. Data can also be gathered through personal interviews (under ICRAA only)

With such premises, the ruling is indeed poised to have a very deep effect on the way tenant screening services, as well as landlords, will review their procedures and methodologies employed to vet people.

How Will Landlords and Screening Services React to The New Ruling?

Because of these new rules, landlords and tenant screening services are going to need to follow “investigative consumer report” guidelines, which actually require explicit consent from the applicants. The new ruling also implies additional disclosure requirements.

Needless to say, all of this will radically change procedure, and The California Apartment Association is already hard at work to update all of the forms and procedure standards, in order to stay up to date with the brand-new standards imposed by the California Supreme Court ruling. Failure to comply with the new law could lead to large penalties for landlords.

For this reason, many landlords are actually turning to their attorneys in order to make sure that their background checks and tenant screening procedures are absolutely up to date with the latest rules.