California Attorney General Says Bidding Wars Not Exempt from Price-Gouging Rules
Landlords Warned Not to Charge Exorbitant Rents
California Atty. Gen. Rob Bonta on Saturday warned landlords that price-gouging rules in effect because of the Los Angeles County fires apply even in cases where bidding wars break out over their property.
Price-Gouging Rules in Effect
Under those rules, which kicked in when the governor declared a state of emergency, local landlords generally can’t charge more than 10% above what they were charging or advertising before the crisis.
Charging Above Limits
Many landlords have tried to charge above those levels anyway, posting listings online that sometimes shows increases greater than 50% or even 100%.
Outrage and Calls for Enforcement
The rental ads have drawn outrage from politicians, tenant groups and even some landlord organizations who have all urged law enforcement to crack down.
Clarifying the Law
Bonta has promised to prosecute, but there has been confusion among some agents, property owners and tenants whether the law applies to instances where there is a bidding war.
At times, fire victims — either at the property owner’s urging, or under their own volition — have submitted offers well above the initial asking price, desperate to find housing in a tight market after the fires destroyed their homes.
Law Applies to Bidding Wars
In a news release Saturday, the attorney general’s office sought to clarify any confusion, explicitly saying that the price-gouging law applies to bidding wars, with landlords unable to accept offers that result in rent exceeding the limits otherwise set by the law.
Penalties for Non-Compliance
“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 said 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 convicted of price gouging, landlords can face up to a year in jail and criminal penalties of $10,000 per violation.
Reporting Price-Gouging
The attorney general’s office urged Californians who believe they’ve been a victim of price gouging to report it at oag.ca.gov/report.
Conclusion
California Attorney General Rob Bonta has made it clear that the price-gouging rules are in place to protect renters during times of crisis, and that landlords are not exempt from these rules even in cases where bidding wars break out. Landlords who violate these rules can face serious penalties, and it is essential that they comply with the law to ensure that renters are protected.
FAQs
Q: What is the purpose of the price-gouging rules?
A: The purpose of the price-gouging rules is to protect renters during times of crisis, such as natural disasters or emergencies, from being charged exorbitant rents.
Q: What is the penalty for violating the price-gouging rules?
A: If convicted of price gouging, landlords can face up to a year in jail and criminal penalties of $10,000 per violation.
Q: How can I report price-gouging?
A: You can report price-gouging to the California Attorney General’s office at oag.ca.gov/report.
Q: Does the price-gouging law apply to bidding wars?
A: Yes, the price-gouging law applies to bidding wars, and landlords are not exempt from these rules even in cases where bidding wars break out.
