On January 7, 2025, Governor Newsom declared a State of Emergency in Los Angeles and Ventura Counties due to the devastating fires. On that same day, Mayor Bass declared a State of Emergency in the city of Los Angeles. Because of the this, there is currently a cap on the amount of money a landlord can charge a tenant to rent their property. This means that if a landlord charges or even advertises for more than the allowable amount in the affected counties they are price gouging.
What States of Emergency Trigger Price Gouging Protections?
A “State of Emergency” means a natural or manmade emergency resulting from an earthquake, flood, fire, riot, storm, drought, plant or animal infestation or disease, pandemic or epidemic disease outbreak, or other natural or manmade disaster for which a state of emergency has been declared by the President of the United States or the Governor.
A “Local Emergency” means a natural or manmade emergency resulting from an earthquake, flood, fire, riot, storm, drought, plant or animal infestation or disease, pandemic or epidemic disease outbreak, or other natural or manmade disaster for which a local emergency has been declared by an official, board, or other governing body vested with authority to make that declaration in any county, city, or city and county in California.
How Long do Price Gouging Protections Last?
For landlords, the price gouging protections begin when the State of Emergency is declared, and end 30 days later. However, if the State of Emergency is extended, then the price gouging protections get extended for additional 30-day periods.
What is not yet clear, since no legal cases have interpreted what is meant by “extended”, is whether the official declaring the emergency must specifically act to extend it, or once the state of emergency is declared is it considered to be extended until it is formally ended by the declaring government. This can make trying to determine whether controls are in effect difficult.
For example, on December 18, 2024, Governor Newsom declared a state-wide State of Emergency for bird flu. That declaration meant price gouging protections applied everywhere in California. Because the Governor has not proclaimed an extension of this State of Emergency, the price gouging protections may have lapsed 30 days later on January 17, 2024. However, since the Governor has not ended the State of Emergency, it could be argued that price gouging laws continue to be effective for this State of Emergency.
Until there is definitive authority determining the interpretation of extension, many attorneys believe the State of Emergency ends 30 days after it is declared unless a specific declaration is made that states it is extending the State of Emergency.
Because nationwide States of Emergency also trigger price gouging protections, people have to keep up to date with the news. For example, on January 20, 2025, President Trump declared a State of Emergency regarding the southern border of the United States. It may be arguable whether this State of Emergency meets the definition stated above but because of the broad working of the definition to include “a manmade disaster,” it probably is included—particularly since the price gouging statute itself states it shall be “liberally construed so that its beneficial purposes may be served.”
So, if Governor Newsom’s and Mayor Bass’s January 7, 2025 State of Emergency is not extended, price gouging controls would expire on February 6, 2025. However, President Trump’s State of Emergency overlaps with this time. With that State of Emergency declared on January 20, 2025, unless extended, price gouging controls would apply until February 19, 2025 (30 days after January 20, 2025). Because the national State of Emergency applies everywhere in the country, price gouging controls will continue in effect not only for Los Angeles and Ventura counties until January 20, 2025—but the controls apply everywhere else in the state from January 20, 2025 to February 19, 2025 at the very least.
Conclusion
In summary, the consequences for price gouging by a landlord, real estate agent, real estate broker, or property manager can be stiff and expensive. You should take the necessary steps to avoid being accused of, or even worse, sued or criminally prosecuted for price gouging. Landlords, agents, brokers, and property managers need to be aware of and understand price gouging laws, their consequences, and how to continue to smoothly operate when these laws are in effect.
TRN Law Associates is available to help. We have been practicing real estate and landlord-tenant law in California for over 15 years. We have offices in San Francisco, San Rafael, and Santa Monica. Contact us at (415) 823-4566 to make sure that you are not at risk of violating price gouging laws during these challenging times.