What Landlords Need to Know About Voluntary Rent Reporting Statutes
Voluntary rent reporting — a process by which tenants can ask landlords to report positive rental payment information to nationwide consumer reporting agencies to help such tenants build their credit — is gaining traction across the U.S., especially in affordable housing sectors. While rent reporting can be a valuable tool to help renters improve their financial stability, landlords must decipher state statutes that regulate this practice, some of which are time-consuming, costly, and may lead to potential tenant disputes and legal issues.
Details on a new California statute and a Colorado pilot program illustrate what landlords need to know about voluntary rent reporting:
California Civil Code Section 1954.07, which took effect April 1, 2025, requires property owners and operators to offer their residents the option of having positive rental payment information reported to at least one nationwide consumer reporting agency. Landlords must offer this voluntary reporting at the time of the lease agreement and at least once annually thereafter, by mail or email, and the offer must contain several specific statements, such as notifying the tenant that the reporting is optional, identifying the consumer agencies to which it will be reported, and including an explanation for how tenants may elect to stop the reporting at any time. California landlords must take care to fully comply with this new law’s requirements.
Colorado’s Rent Reporting for Credit Pilot Program Act introduced a similar program from May 2021 through April 2024, which was repealed in September of 2024 after it completed its report in June of 2024. This pilot program recruited landlords to participate in a process to report tenants’ timely rental payments to a consumer reporting agency in order to help “credit-invisible” renters and renters with weak credit potentially build credit. Tenants’ rent payments were reported to all three major credit bureaus (Experian, Equifax, and TransUnion), and only positive payments were reported. Tenants could opt out of the service at any time; however, if they did, they could not re-enroll in the program. Throughout the program, tenants had access to a personal dashboard where they could chart their payments and credit progress.
Notwithstanding the potential positive impact the California and Colorado reporting programs deliver for tenants, these laws shoulder landlords with administrative burdens and costs. Some participating landlords have reported that the required opt-in/opt-out policies created tensions between landlords and tenants, and tensions between property managers/owners and the third-party vendors used to administer the program. Given the complexity of these laws, it is important for landlords to consult with counsel to plan carefully to minimize the administrative burden and ensure they are in full compliance.
Questions about how rent reporting statutes may impact your work as a landlord? Reach out to Loraina Lopez or another member of LP’s Real Estate group.