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Wednesday, January 22, 2025

California AG warns against rental bidding wars amid LA wildfires

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Attorney General Rob Bonta | Official website

Attorney General Rob Bonta | Official website

California Attorney General Rob Bonta has issued a consumer alert reminding landlords that rental bidding wars, leading to unlawful price increases, are prohibited under California’s price gouging statute during a state of emergency. This announcement comes in response to the Los Angeles wildfires, which prompted Governor Gavin Newsom to declare a state of emergency. The declaration activated price gouging protections under Penal Code section 396 for lodging and rental housing until March 8, 2025. These protections generally prevent rent increases exceeding 10 percent of the pre-emergency rate.

“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.”

Under Penal Code section 396, it is illegal for any person or entity to raise rental prices by more than 10 percent during an emergency. Violators face criminal prosecution with penalties including up to one year in county jail and fines up to $10,000. Civil enforcement actions can also be pursued with penalties reaching $2,500 per violation along with other legal consequences.

Attorney General Bonta emphasized his commitment to addressing price gouging related to the Los Angeles wildfires by announcing the creation of a Disaster Relief Task Force. This team comprises professionals from various divisions within the Department of Justice focused on combating unlawful conduct during emergencies. A new website has been launched providing information about DOJ’s wildfire response: oag.ca.gov/LAFires.

Additionally, over 200 warning letters have been sent out by DOJ officials to hotels and landlords accused of engaging in price gouging activities amid these challenging times.

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