Price Gouging Laws Every Los Angeles Landlord Should Understand
When the State of California declares a state of emergency, it activates a set of legal protections aimed at preventing unfair pricing. For property owners in Los Angeles County, that includes strict limitations on how much rent can be charged while the emergency order is in effect.
If you are planning to rent out a property or adjust an existing lease, understanding these rules is essential to staying compliant.
What Qualifies as Price Gouging
Under California Penal Code Section 396, price gouging includes raising the rent by more than ten percent after a state of emergency has been declared.
This law applies regardless of whether the lease is new, extended, or month to month. The ten percent cap is firm unless your situation qualifies for a narrow exception.
Rent Limitations Based on Unit Type
The law outlines clear guidelines depending on how the unit has been used previously.
For Current Tenants
If a tenant was already in place before the emergency was declared, you may not increase rent by more than ten percent above their most recent rate.
For Vacant Units Previously Rented
If the unit was vacant but had been rented within the last year, the rent increase is still subject to the ten percent limit based on the most recent rental rate offered.
For Newly Listed or Never-Rented Units
Units that have never been rented before, or are newly constructed, must follow HUD’s Fair Market Rent standards. In these cases, rent cannot exceed one hundred sixty percent of the published fair market rate for the area.
What About Furnished Rentals
You may be able to justify a slightly higher rent for a furnished property. However, any increase should still be within a reasonable range and supported by comparable market data. Even with added amenities, the total rent must remain compliant with the law.
Violations and Penalties for Price Gouging
Violating California’s price gouging laws during a declared state of emergency carries serious consequences.
Criminal Penalties
A landlord who charges more than the legal rent limit may be charged with a misdemeanor. This can result in:
Up to one year in county jail
A fine of up to ten thousand dollars per violation
Civil Penalties
State and local agencies may also take civil action. These penalties may include:
Fines of up to two thousand five hundred dollars per violation
Mandatory restitution to tenants who were overcharged
Court-ordered payment of the tenant’s legal fees and costs
Private Lawsuits
Tenants who believe they have been charged unlawfully during an emergency may also pursue a private lawsuit. They may be entitled to compensation for damages and legal expenses.
How to Stay Compliant
To protect yourself and your investment, be sure to:
Review the most recent HUD Fair Market Rent limits for your ZIP code
Maintain detailed records of past rental rates and lease terms
Consult with a housing attorney if you are unsure about pricing
Make sure any adjustments for furnishings are reasonable and well documented
During an emergency, fair housing practices are not just about compliance. They are about helping communities remain stable through difficult times. If you have questions about how to apply these rules to your rental property, I am always here to provide guidance or connect you with trusted professionals.
Contact me HERE or give me a call at (424) 212 3859.
Best regards,
Lindsay Woolf | CA DRE #02236711
DOMO Real Estate | CA DRE #01290500
Disclaimer: The information in this blog post is for general informational purposes only and does not constitute legal advice. Real estate transactions can be complex and subject to local regulations.
