Landlords Accused of Price Gouging

by | Dec 18, 2017 | Rental Property Management Tips

A half dozen California landlords have been charged with price gouging after allegedly spiking rents in the wake of catastrophic wildfires that have driven residents there from their homes. The number of landlords charged is expected to climb as more complaints are investigated.

California law prohibits raising the price on life necessities, including rental housing, after a declaration of emergency. Gov. Brown declared a state of emergency on October 9 after a fire engulfed Sonoma County. In response, the Sonoma County District Attorney’s office issue a stern warning that any price increases beyond 10% on necessities may result in jail time and fines of up to $10,000. The state’s attorney general issued a similar warning for Los Angeles and Ventura counties after subsequent wildfires broke out there.

Despite the warnings, numerous landlords already have been charged with price gouging and currently face prosecution. In one case, a landlord allegedly orchestrated a bidding war, driving the rent from a starting bid of $3,500 to $10,000, according to a news report. Two other landlords are accused of entering into a 12-month lease at over 30% of current rent two days after the state of emergency was declared. According to reports, a district attorney has subpoenaed Craigslist and other online ad services for evidence of spiked rent.

Typically, price gouging under the California statute applies only for the first 30 days after a state of emergency is declared. However, given the magnitude of the damage and the impact on residents from the wildfires, Gov. Brown has extended the state of emergency to April 18, 2018.

At least 34 states have price gouging restrictions, with penalties reaching as high as $250,000 and up to a year in jail.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

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Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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