Attorney general warns landlords and businesses: Violating price cap could lead to hefty fines or jail time
During emergencies in California, price gouging is prohibited by law per Penal Code Section 396. The California Office of Emergency Services website, cafoes.ca.gov/office-of-the-director/policy-administration/legal-affairs/price-gouging, lists all price gouging restrictions currently in effect due to a proclamation by Gov. Gavin Newsom. One central tenet is that increasing the price of goods or services by more than 10 percent may be illegal price gouging. Californians who believe they have been the victim of price gouging should report any incidents to either the attorney general’s website or to local authorities.
Given the volume of displaced persons, housing is one of the primary arenas in which fire victims are experiencing price gouging. Stories abound regarding enterprising property owners steering clear of increasing leasing prices beyond 10 percent to comply with that standard, yet also imposing new, onerous restrictions. Those include asking prospective lessees to pay for an entire year’s rent in addition to asking for the usual safety deposits.
“Be aware. After a disaster, price increases can occur at grocery stores, gas stations, with housing, emergency and medical supply stores, and with regard to construction or repair services,” the Los Angeles County Department of Consumer & Business Affairs advised. “If you think a store or service provider is committing price gouging, compare prices prior to the state of emergency and in areas not affected by the disaster. Consumers are protected from a price increase of 10 percent or more for 30 days on goods and services and for 180 days on contractor-related services. Keep detailed records of purchases you make during a declared emergency.”
Those who are seeking to lease can refer to the informative resources from the California Department of Justice, oag.ca.gov, to know all of their rights when leasing.
California Attorney General Rob Bonta has sent more than 200 letters to landlords and hotels warning them they have been accused of wildfire-related price gouging, his office announced on Jan. 17.
“The price gouging that we’re seeing and hearing about needs to stop now,” Bonta stated in a press release. “These letters are just one of many tools my office is using to stop this illegal activity. May they serve as a declaration that we are taking swift action, and we will not stop until the price gouging does.”
Online listings have demonstrated that some landlords have increased prices by 50 percent or more above their advertised rental rates before the fires. In a news release issued on Jan. 18, Bonta warned landlords that price-gouging rules apply even in cases where bidding wars break out over their property.
“The bottom line is this: landlords cannot charge, or accept, rent that exceeds the 10 percent cap set by California’s price gouging statute, even if they find someone who is willing to pay it,” Bonta clarified in a statement. “Our legislature has enacted robust protections for renters during times of crisis, and I’m committed to ensuring that those protections are followed and respected.”
If a landlord is convicted of price gouging, he can face up to a year in jail and criminal sanctions of up to $10,000 per violation.
If a reader is concerned he has been a victim of price gouging, he can contact the Office of Attorney General to file a complaint at oag.ca.gov/report or by calling 1(800) 593-8222.