By SDCN Editor
Oakland, CA–California Attorney General Rob Bonta Saturday issued a consumer alert reminding landlords in California that rental bidding wars resulting in unlawful price increases are prohibited under the state’s price gouging statute, Penal Code section 396, when a state of emergency has been declared.
In response to the Los Angeles wildfires, Governor Gavin Newsom declared a state of emergency that triggered the price gouging protections of Penal Code section 396 for lodging and short- and long-term rental housing through March 8, 2025. 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.
“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.”
Penal Code section 396 makes it “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.” The full text of the statute can be found here. Violators of Penal Code section 396 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.
Bonta is committed to holding accountable those who engage in price gouging during the Los Angeles wildfires. On Thursday, he 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. At the press conference, he also announced the launch of a website dedicated to providing the public information related to DOJ’s wildfire response. Friday, he announced that the DOJ has sent more than 200 warning letters – and counting – to hotels and landlords who have been accused of price gouging.
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.
