Landlords who find themselves the recipient of a bidding war for rental housing are breaking the law if they accept abnormally high offers according to California Attorney General Rob Bonta.
Bonta issued a consumer alert this week reminding landlords in the state that rental bidding wars resulting in unlawful price increases are prohibited under California’s price gouging statute, during a state of emergency.
Such a declaration was made by Governor Gavin Newsom following the recent fires triggering the price gouging protections of Penal Code section 396 for lodging and short- and long-term rental housing through March 8, 2025.
Bonta’s office said these protections generally prohibit raising the price of lodging and rental housing after an emergency is declared by more than 10 percent of the previously charged price.
Bidding wars have erupted as thousands of residents seek new accommodation either temporarily or due to the loss of their homes. With reports of desperate people offering well above market rate for units, officials say it is the landlord’s responsibility to adhere to the law.
“Reports of rental bidding wars are deeply concerning, especially because some landlords seem to be encouraging them. 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,” said Attorney General Bonta. “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.”
According to the law it is “unlawful for any person, business, or other entity, to increase the rental price . . . advertised, offered, or charged for housing to an existing or prospective tenant, by more than 10 percent.” Violations are subject to criminal prosecution that can result in a one-year imprisonment in county jail and/or a fine of up to $10,000. Violators are also subject to civil enforcement actions including civil penalties of up to $2,500 per violation, injunctive relief, and mandatory restitution. The Attorney General and local prosecutors can enforce the statute.
Law enforcement officials have been reiterating their commitment to protecting fire victims and punishing fire-related criminals to the maximum extent possible. Last week, Bonta held a press conference to announce the creation of a Disaster Relief Task Force — a cross-functional team of professionals from DOJ's law enforcement and legal divisions, including the Division of Law Enforcement, Special Prosecutions Section, Cybercrime Section, and Consumer Protection Section, that is focused on tackling price gouging and other unlawful conduct.
Officials say common schemes include fraudulent contractors appearing in evacuation zones, fake charities soliciting donations, and price manipulation of essential goods and services.
The task force is investigating reports of unlicensed contractors going door-to-door in affected areas, offering immediate repairs at inflated prices. Officials warn that legitimate contractors must wait for safety clearance before entering disaster zones.
At the press conference, he also announced the launch of a website dedicated to providing the public information related to DOJ’s wildfire response: oag.ca.gov/LAFires.
Californians who believe they have been the victim of price gouging should report it to their local authorities or to the Attorney General at oag.ca.gov/report. To view a list of all price gouging restrictions currently in effect as a result of proclamations by the Governor, please see here.
