California attorney general says bidding wars are not exempt from price gouging rules
California Attorney. Gen. Rob Bonta warned landlords Saturday that price-gouging rules in effect because of the Los Angeles County fires apply even if a bidding war breaks out for their properties.
Under the rules, which take effect when the governor declares a state of emergency, local landlords generally cannot charge more than 10% more than what they charged or advertised before the crisis.
Regardless, many landlords try to charge more than these levels, with listings they list online sometimes showing increases of more than 50% or even 100%.
The rental ads have drawn the ire of politicians, tenant groups and even some landlord groups, who have urged law enforcement to crack down.
Bonta has promised to sue, but some agents, landlords and tenants are confused about whether the law applies in the context of a bidding war.
Sometimes fire victims — either at the urging of property owners or out of their own volition — submit offers well above the original asking price, desperate to buy into a tight market after fires destroyed their homes. Find housing.
In a press release on Saturday, the attorney general’s office sought to clear up any confusion, making clear that price gouging laws apply to bidding wars and that landlords cannot accept offers that would cause rents to exceed the limits set by the law.
“The bottom line is this: Landlords cannot charge or accept rent that exceeds the 10 percent cap imposed by California’s price gouging statute, even if they find someone willing to pay,” Bonta said in a statement. “Our Legislature has created a plan for renters during this time of crisis. Strong protections and I am committed to ensuring these are adhered to and respected.”
If convicted of price gouging, landlords could face up to one year in prison and criminal penalties of $10,000 per violation. The Attorney General’s Office urges Californians who believe they are victims of price gouging to report it at oag.ca.gov/report.
