California Atty. Gen. Rob Bonta cautioned property owners on Saturday that price gouging regulations established following the Los Angeles County fires also pertain if competitive bidding situations arise for their real estate.
According to these regulations, which became effective upon the governor’s declaration of a state of emergency, local property owners typically cannot impose rents exceeding 10% above pre-crisis rates or advertised figures.
Numerous landlords are attempting to charge above that threshold nonetheless, often posting listings online with price hikes of over 50% or even 100%.
The rental listings have sparked outrage from lawmakers, tenant organizations, and even certain landlord associations, who are demanding enforcement action against them.
While Bonta has vowed to take legal action, there remains uncertainty among various agents, property holders, and renters regarding the applicability of the law in situations involving bidding wars.
At times, at the request of the property owner, or on their own initiative, fire victims seek a residence in a tight housing market after their home has been lost to fire, submitting offers significantly above the initial asking price.
In a press release on Saturday, the attorney general’s office aimed to clarify this ambiguity, explaining that price gouging laws are relevant to bidding wars and landlords cannot accept offers that exceed the rental caps established by law.
“The essential point is that landlords cannot impose or accept payments exceeding the 10% limit set by California’s price gouging statute, even if they encounter someone willing to pay,” Bonta stated. “This is what I mean.” “Our legislature has instituted robust protections for tenants during emergencies, and I will strive to ensure these safeguards are enforced and honored.”
If found guilty of price gouging, a landlord could face up to one year of incarceration and a $10,000 criminal fine for each infraction. The Attorney General’s Office encouraged Californians who believe they have fallen prey to price gouging to report it at oag.ca.gov/report.