California Attorney General Says Bidding Wars Not Exempt From Price Gouging Rules

California Atty. Gen. Rob Bonta warned homeowners Saturday that price gouging rules in effect because of the Los Angeles County wildfires apply even in cases where bidding wars break out for their property.

Under these rules, which went into effect when the governor declared a state of emergency, local landlords generally cannot charge more than 10% more than they were charging or advertising before the crisis.

Many landlords have tried to charge above these levels anyway, posting online ads that sometimes show increases of more than 50% or even 100%.

The rental ads sparked outrage from politicians, tenant groups and even some landlord organizations who all urged law enforcement to crack down.

Bonta has promised to take legal action, but some agents, landlords and tenants are unsure whether the law applies to bidding war cases.

Sometimes, fire victims — either at the owner’s request or of their own volition — have submitted offers well above the original asking price, desperate to find housing in a tight market after fires destroyed their homes.

In a press release Saturday, the attorney general’s office sought to clear up any confusion, explicitly stating that the price gouging law applies to bidding wars, with owners unable to accept offers that result in a rent in excess of limits otherwise established by law.

“The bottom line is this: Landlords cannot charge, or accept, rent in excess of the 10 percent cap set by California’s price gouging law, even if they find someone willing to pay it ” Bonta said in a statement. “Our Legislature has passed strong protections for renters in times of crisis, and I am committed to ensuring these protections are followed and respected.

If convicted of price gouging, owners could face up to a year in prison and criminal penalties of $10,000 per violation. The Attorney General’s Office urged Californians who believe they have been victims of price gouging to report it at oag.ca.gov/report.