LA City Attorney Sues Landlords for Wildfire Price Gouging

Introduction to the Lawsuit

The Los Angeles City Attorney’s office has filed a civil lawsuit against several property owners and their companies, which allegedly ran a sprawling illegal multimillion-dollar rental property scheme, City News Service reported. Los Angeles-area landlords who allegedly gouged tenants in the aftermath of the devastating fires that tore through 12,000 homes face civil penalties of up to $62 million.

Background on the Allegations

City Attorney Hydee Feldstein Soto seeks a permanent injunction barring the defendants from offering short-term rentals in the city, restitution to tenants impacted and tens of millions of dollars in civil penalties. “The scale of the alleged activity — the illegal short-term rentals and the wildfire-related price gouging — is outrageous,” Feldstein Soto said in a statement. “The defendants not only exacerbated a severe housing shortage but took advantage of Angelenos at their most vulnerable time.”

Defendants and Their Companies

The complaint names Akiva Nourollah, Micah Hiller, Haim Amran Zrihen and Rachel Florence Saadat as defendants. The lawsuit also names their limited liability companies, including Hiller Hospitality, Hiller Hospitality Group, 1070 Bedford, Red Rock 70 and Coastal CHarm, all based in Nevada and registered with the California Secretary of State to do business in California.

Details of the Alleged Scheme

The group advertised and offered short-term rentals of dozens of properties for thousands of nights without the required permits, according to the complaint. This also included rent-controlled units which can’t legally be used as short-term rentals in the city. Defendants allegedly jacked up rent for some of their properties up to 113 percent higher than before the January wildfires, according to the lawsuit. They also allegedly used deceptive tactics, such as fake IDs and falsely advertised properties outside of Los Angeles.

Anti-Price Gouging Law

After the Palisades and Eaton fires broke out on Jan. 7, the defendants allegedly expanded their illegal operation, offering and booking long-term rentals in violation of the anti price-gouging law, including for some of those same properties, according to the lawsuit. California lawmakers approved the anti-gouging law following the Northridge Earthquake in 1994. In response to the wildfires, Gov. Gavin Newsom declared a state of emergency, triggering the law in the L.A. region. It is illegal to increase the price of essential food and housing by more than 10 percent while the declaration is still enacted.

Impact on Renters

After the fires, landlords in the Los Angeles market illegally gouged renters, with overall rents rising by 20 percent across Los Angeles County, according to a Washington Post analysis. In nearly 30 cities and Los Angeles neighborhoods, the median rent for homes listed within two weeks after the fires started spiked well past the legal limit of 10 percent, compared with those listed within two weeks before the blazes that burned from Altadena to Pacific Palisades.

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Conclusion

The lawsuit filed by the Los Angeles City Attorney’s office is a significant step towards addressing the issue of price gouging by landlords in the aftermath of natural disasters. The alleged actions of the defendants are a clear exploitation of vulnerable individuals and the city’s housing shortage. The outcome of this lawsuit will be closely watched, as it may set a precedent for future cases of price gouging in the city.

FAQs

• Q: What is the lawsuit about?
  A: The lawsuit is about several property owners and their companies allegedly running an illegal multimillion-dollar rental property scheme and engaging in price gouging after the January wildfires.
• Q: Who are the defendants in the lawsuit?
  A: The defendants include Akiva Nourollah, Micah Hiller, Haim Amran Zrihen, Rachel Florence Saadat, and their limited liability companies.
• Q: What are the allegations against the defendants?
  A: The defendants are alleged to have offered short-term rentals without permits, including rent-controlled units, and to have increased rents by up to 113 percent after the wildfires.
• Q: What is the anti-price gouging law?
  A: The anti-price gouging law is a California law that makes it illegal to increase the price of essential food and housing by more than 10 percent during a state of emergency.
• Q: What is the potential penalty for the defendants?
  A: The defendants face civil penalties of up to $62 million.