SoCal Agent Hit With Price Gouging Charge, Law Limits Rents
California Attorney General Files First Price-Gouging Charges Related to Fires
Attorney General Rob Bonta has filed the first price-gouging charges related to the fires, accusing La Cañada-Flintridge real estate agent Mike Kobeissi of raising the monthly rent on a property by 38 percent, the Los Angeles Times reported.
Rent Increase Exceeds Legal Limit
Kobeissi allegedly jacked up the rent to $12,000 from $8,700, after a couple displaced by the Eaton fire applied to rent it.
California Law Prohibits Excessive Rent Increases
California law prohibits rent increases exceeding 10 percent following a natural disaster.
Agent Denies Allegations, Cites Market Value
Kobeissi denied the allegations, arguing the price reflected market value in the area. He emphasized that the property is now rented below market rate to fire victims.
Real Estate Agents and Landlords Speak Out
Meanwhile, real estate agents and landlords argue that price-gouging restrictions are inadvertently worsening the housing crunch following this month’s firestorms, which burned more than 11,000 homes and led to a surge in demand for rental properties, according to the Times.
Limitations on Rent Increases
Under state law, newly listed properties cannot charge more than a federally determined cap, currently $9,554 per month in Los Angeles County, unless rented within the past year. Some say this limitation is keeping high-end homes in L.A.’s upscale neighborhoods, where rents often exceed $10,000 a month, off the market.
Consequences of Violations
Activists and officials have identified hundreds of alleged violations, with Bonta’s office sending over 500 warning letters to landlords and operators accused of gouging. Violators face fines and possible jail time.
State’s Balancing Act
The state’s balancing act between protecting vulnerable fire victims and maintaining rental supply is drawing scrutiny, as calls grow to reassess laws impacting high-end rental markets during emergencies.
Attorney General’s Statement
“This is a housing crisis within a crisis,” Bonta said. “We will hold those exploiting disaster victims accountable while ensuring families have access to safe, affordable housing.”
Read more
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Conclusion
The price-gouging charges filed against Mike Kobeissi are a reminder of the need for balance in California’s laws regarding rent increases during natural disasters. While the state aims to protect vulnerable fire victims, it must also ensure that rental supply is maintained to address the ongoing housing crisis.
FAQs
Q: What is the legal limit on rent increases in California following a natural disaster?
A: California law prohibits rent increases exceeding 10 percent following a natural disaster.
Q: What are the consequences of violating California’s price-gouging laws?
A: Violators face fines and possible jail time.
Q: How many alleged violations of California’s price-gouging laws have been identified?
A: Hundreds of alleged violations have been identified, with over 500 warning letters sent to landlords and operators accused of gouging.
