Warning Against Price Gouging
In an effort to protect residents from exploitation during emergency situations, the County of Los Angeles recently approved a significant increase in the penalty for price gouging—raising it from $10,000 to $50,000. This decision underscores the serious implications of price gouging and the county's commitment to defending its residents, particularly in the wake of the recent wildfires. As thousands of Los Angeles residents search for new homes and rentals, understanding California’s anti-price gouging rules becomes a crucial aspect of ensuring fair and accessible housing.
For Los Angeles residents grappling with the aftermath of wildfires, these legal protections are vital. They help maintain stable and fair housing markets, preventing exploitation during emergencies. Understanding these laws empowers renters to advocate for their rights and seek appropriate housing solutions without fear of unjust rent hikes. As we continue to support recovery efforts, staying informed about such protective measures is essential for building resilient communities. Victims of price gouging are encouraged to report violations to the necessary authorities, ensuring that offenders are held accountable and residents receive the protection they deserve.
Victims of price gouging, including renters facing excessive rent increases, are urged to contact the California Attorney General’s Office, the Los Angeles County Department of Consumer and Business Affairs, or the California Department of Real Estate. These agencies serve as vital resources for reporting and addressing unlawful pricing practices.
The team at MOTIFF Realty have put together a few major highlights to help navigate the rules and their significance below:
Laws Limiting Rent Increases
In California, three main types of laws may limit rent increases, particularly during states of emergency such as the recent wildfires:
Tenant Protection Act (TPA): The Tenant Protection Act is a state law that generally limits rent increases to 5% plus the local inflation rate, as indicated by the applicable Consumer Price Index (CPI), with a maximum cap of 10%. This ensures that rent increases are kept within reasonable bounds, especially important for displaced families seeking stability.
State Anti-Price Gouging Law: This law is activated during a declared state of emergency, like the wildfires affecting Los Angeles. It prohibits excessive rent hikes, usually capping them at 10%. Unlike the TPA, this law may apply even if a property is exempt from TPA provisions.
Local Rent Control Ordinances and Rent Freeze Moratoriums: Many cities and counties have local ordinances to control rent increases or impose temporary rent freezes during emergencies. These may have different limits and durations than state laws, but landlords must comply with the most stringent regulations applicable.
Importance of the Anti-Price Gouging Law
The anti-price gouging law is particularly significant in the aftermath of disasters:
Emergency Activation: It is triggered when an emergency declaration is made by the Governor, city or county authorities, or even the President. For Los Angeles residents displaced by wildfires, this law provides a safety net against sudden and exploitative rent hikes when demand for housing sharply rises.
Duration and Extension: Typically, the statute applies for 30 days post-declaration of an emergency. Authorities, however, have the power to extend it as necessary. This flexibility is crucial in ensuring ongoing protection for residents until they can recover or relocate to stable housing conditions.
Exemptions and Notices
While the TPA covers many properties, some are exempt, including single-family residences, condos, or townhomes not owned by corporations or REITs. Moreover, housing built within the last 15 years is also exempt. Despite these exemptions, the anti-price gouging law may still apply in emergencies.
Furthermore, landlords must provide 30-day notice for rent increases of 10% or less, and a 90-day notice for increases exceeding 10%. This ensures transparency and allows tenants to plan accordingly.
