California Attorney General Charges L.A.-Area Real Estate Agent with Price Gouging in Wake of Wildfires

Allegations of Rent Increases Following Eaton and Palisades Fires

Attorney General Rob Bonta announced on Wednesday that a real estate agent in La Cañada Flintridge is facing criminal charges for allegedly raising the rent of a rental property by 38% in the aftermath of the devastating Eaton and Palisades fires. The agent, Mike Kobeissi, denies any wrongdoing.

Price Gouging in the Wake of Disaster

Following the devastating fires that struck the Los Angeles area on January 7, destroying over 11,000 homes, many families were forced into the tight and already-struggling rental market. Reports of widespread price gouging have been filed, with listing prices increasing as much as 60% in some cases.

Charges of Price Gouging Filed in Los Angeles County Superior Court

Kobeissi was charged with one felony count of price gouging by the California Attorney General’s office. According to the Justice Department investigation, the couple who lost their home in the Eaton fire attempted to rent a property in La Cañada Flintridge from Kobeissi but were informed after the application that the rent had increased by 38%. Due to the surge in rent, the couple declined to rent the property.

California Law Prohibits Rental Price Increases during State of Emergency

California law prohibits raising prices for rental properties and other essential goods and services by more than 10% during a state of emergency, including natural disasters like the wildfires in LA. This ban remains in effect until March 8 unless extended by Governor Gavin Newsom.

Kobeissi Denies Allegations and Claims He Supports the Community

Kobeissi denied engaging in price gouging, saying that he had increased the rent to reflect the property’s excellent location in a highly regarded school district. The agent claims he received offers to rent the property for higher rates, but opted to rent it to a displaced family at a lower rate of under $10,000, including a free month’s rent and furniture. He has hosted firefighters and supports the community following the disaster, he claimed.

Potential Consequences and Increased Enforcement Efforts

If found guilty, Kobeissi faces up to one year in county jail and fines of up to $10,000. He could also be subject to civil penalties of up to $2,500 per violation. As part of ongoing efforts to crack down on price gouging, Attorney General Bonta has issued over 500 warning letters and has criminal investigations ongoing.

Conclusion

Price gouging by real estate agents and property managers is illegal in California, especially during a time of crisis such as a wildfire. It’s essential to understand the law and the potential consequences of price gouging, to ensure fairness for all individuals seeking housing after a disaster. If you or someone you know is a victim of price gouging, contact your local authorities immediately.

Frequently Asked Questions:

• What is price gouging?
  Price gouging is when a seller significantly increases the price of an essential good or service, such as housing, immediately after a disaster or state of emergency.
• Is price gouging illegal in California?
  Yes, it is illegal to engage in price gouging during a state of emergency, including natural disasters like the wildfires in LA.
• Can I be penalized for engaging in price gouging?
  If found guilty of price gouging, individuals or businesses could face criminal and/or civil penalties.