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Managing an estate can be challenging, and your job gets even more complicated if you’re a fiduciary responsible for overseeing real estate. With the recent passage of Assembly Bill (AB) 2747, fiduciaries handling residential rental properties in California are now subject to new landlord obligations, specifically regarding tenant rental payment reporting. Whether you’re a trustee, executor, or conservator, understanding how AB 2747 impacts you is crucial. 
What is AB 2747?
AB 2747, effective January 1, 2025, adds Civil Code section 1954.07, requiring landlords, including fiduciaries managing rental properties, to offer tenants the option to report positive rental payments to at least one consumer reporting agency. The goal is to help tenants build their credit by reporting timely rent payments.
Key Requirements for Fiduciaries
- For New Leases: If you’re managing a rental property and the lease is entered into on or after April 1, 2025, you must offer tenants the option to report their positive rental payments when signing and annually afterward thatting Leases: If a lease is already in effect on January 1, 2025, the offer must be made by April 1, 2025, and then annually.
Fiduciaries overseeing residential properties must ensure compliance, whether they manage the property themselves or through a management company.
Are All Properties Covered?
Not all residential rental properties are required to comply with AB 2747. Properties with 15 or fewer units are generally exempt unless the fiduciary manages multiple properties or the property is owned by a corporation, real estate investment trust (REIT), or a limited liability company (LLC) with corporate members.
How to Comply with AB 2747
To comply with the law, fiduciaries must provide tenants with a written notice offering the option to report positive rental payments. The notice must:
- Inform the tenant that the reporting is optional.
- Specify the consumer reporting agency where the information will be reported.
- Provide instructions on how tenants can opt in or out of the reporting.
It’s important to track tenant responses, as opting into the reporting system is entirely voluntary.
What Are the Benefits and Fees?
Fiduciaries can charge tenants a fee for reporting, but the fee must reflect the actual cost incurred and cannot exceed $10. However, since tracking such fees might be cumbersome, it’s important to weigh whether it’s worth the time and effort for a nominal charge.
How Can You Stay Ahead?
If your estate includes rental properties, it’s critical to stay informed about local and state laws affecting landlord obligations. While property management companies can handle some compliance tasks, fiduciaries must ensure all legal requirements are met.
Final Thoughts
Being a fiduciary is no small feat, and the added responsibility of becoming a landlord under California law requires careful attention to detail. With AB 2747, you have new obligations to tenants that can have long-term financial impacts. Make sure you’re ready by understanding the law and how it applies to your fiduciary role.
If you need guidance navigating your fiduciary responsibilities under AB 2747 or any other aspect of landlord-tenant law, contact our experienced business litigation law firm today. Let us help you protect the interests of the estate and ensure compliance with California law. Schedule a consultation now!
