California Attorney General Rob Bonta has issued a consumer alert to remind landlords that rental bidding wars leading to unlawful price increases are prohibited under the state's price gouging statute, Penal Code section 396. This reminder comes in response to the state of emergency declared by Governor Gavin Newsom due to the Los Angeles wildfires. The declaration activates price gouging protections for lodging and rental housing until March 8, 2025.
The statute prohibits raising prices by more than 10 percent after an emergency is declared. Californians suspecting they have been victims of price gouging should report it to local authorities or the Attorney General's office at oag.ca.gov/report.
"Reports of rental bidding wars are deeply concerning, especially because some landlords seem to be encouraging them," said Attorney General Bonta. "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."
Violations of Penal Code section 396 can lead to criminal prosecution with penalties including up to one year in county jail and/or fines up to $10,000. Civil enforcement actions may also be pursued with penalties reaching $2,500 per violation along with injunctive relief and mandatory restitution.
Attorney General Bonta announced a Disaster Relief Task Force aimed at addressing price gouging during the wildfires. This team includes professionals from various divisions within DOJ focused on tackling illegal conduct related to disasters. A new website providing information on DOJ’s wildfire response has been launched at oag.ca.gov/LAFires. Over 200 warning letters have already been sent out by DOJ to hotels and landlords accused of engaging in price gouging practices.