CAA Wildfire Resource Center
Protections against rent gouging remain in effect
On Sunday, Oct. 27, high winds and resulting fires and evacuations prompted Gov. Gavin Newsom to declare a statewide emergency, a move that triggered protections against price gouging, including rent increases over 10% anywhere in California.
The rent-gouging protections apply to all housing types of all ages, including vacant units. The state of emergency is slated to last 30 days, although Gov. Newsom can extend it.
The limit on rent increases is part of the state’s anti-price gouging law. When activated, Penal Code Section 396 makes it illegal to increase the price of many consumer goods and services, including that of rental housing, by more than 10% above pre-emergency levels.
Anyone convicted of violating the state’s anti-price-gouging law can face a year in county jail, a fine of up to $10,000, or both, as well as civil penalties.
When the statewide emergency expires, county specific declarations, based on earlier fires, will likely remain in place, as depicted on the map. It is important to remember, however, that protections against rent gouging extend beyond county lines.
California’s attorney general has interpreted the anti-price-gouging law to apply anywhere in the state with an increased consumer demand resulting from the emergency. When any California county is named in an emergency, it is best to check with legal counsel before imposing a rent increase over 10%, even in a county unnamed in the declaration.
NEED TO KNOW INFORMATION
How Rent Charges Are Affected by the Wildfires
California law prohibits rental housing providers from charging rent for any period of time that a unit is uninhabitable.
A unit may be considered uninhabitable as a result of fire damage, lack of heat or hot water due to disconnection of utilities, or any other condition which causes the unit to be unsafe for human habitation.
For rent collected prior to the wildfires, CAA recommends refunding rent on a pro-rated basis for any days that units were uninhabitable.
Anti-Price Gouging Laws
Even if your rental units were not damaged, your rents may still be affected by the wildfires. The fires from 2017 and 2018 prompted states of emergency, triggering California’s anti-price gouging law. The anti-price gouging law prohibits providers of certain goods and services – including rental housing – from increasing prices by more than 10 percent over pre-emergency levels, unless an exception applies.
The law isn’t limited to the cities or counties that suffered the fires, it aims to prevent price gouging anywhere in the state with an increased consumer demand resulting from the declared emergency. Violation of the law is a misdemeanor, punishable by up to a year in jail and/or a $10,000 fine. Make sure you are familiar with the law’s requirements by reviewing CAA’s Industry Insight: Anti-Price Gouging Laws, which answers many frequently asked questions. The background paper also has been updated to changes to the law under AB 1919 by Assemblyman Jim Wood, D-Healdsburg.
RENTING YOUR PROPERTY FOR THE FIRST TIME?
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Thank You for Helping
In the wake of the recent fires, some property owners are stepping up to help displaced residents by renting out their properties for the first time. If you are becoming a first-time landlord to help alleviate the housing shortage created by the fires, your efforts are appreciated.
We’re Here to Help
CAA knows that the learning curve for a first-time landlord is steep. That’s where we come in. CAA offers a number of tools to help navigate the sometimes-confusing business of being a rental housing provider.
Forms: CAA members have access to a complete library of over 130 California-specific forms that are recognized and recommended by the California State Bar and many regional courts.Forms >>
Education: CAA offers a catalog of in-person and online classes, taught by top industry professionals. Educating yourself is key for you to make sure you are complying with the law and operating your business effectively and efficiently. You don’t have to be a member to take our classes, but members receive substantial discounts on all of CAA’s classes.Education >>
Tenant Screening: Every owner and manager offering residential property for rent should screen all applicants prior to renting the property. CAA members qualify for discounted resident screening from our authorized providers.Tenant Screening >>
Helpline: The Helpline service provides CAA Helpline members access to CAA’s advisers who answer landlord-tenant-related questions in a timely fashion, usually within one business day.Helpline >>
Insurance: CAA Value Insurance is a full service, all lines insurance brokerage agency, focused on property and casualty business with dedicated and experienced licensed brokers. We’ve used our considerable buying power to negotiate better pricing, mandate better service, and get state-of-art coverage. That means you get better coverage at a competitive price.Insurance >>
Looking for More Information?
Find out more, including resources for businesses affected by the wildfires and information about how to support recovery efforts, by visiting the following pages: