SANTA MONICA—The Santa Monica City Attorney’s Consumer Protection Division issued a price gouging advisory to remind landlords, hotel operators, and other business owners that increasing the prices on certain goods or services at more than 10 percent during a State of Emergency is unlawful.
The California Department of Justice explained that price gouging refers to sellers of essential goods taking unfair advantage of consumers during an emergency or disaster by greatly increasing prices. The ban on price gouging applies to temporary and permanent housing, food, emergency supplies, medical supplies, building materials, gasoline, transportation, and emergency cleanup services.
Governor Newsom declared a State of Emergency in Los Angeles County on Friday, October 25, due to the wildfires that have spread across the state. The Getty Fire has resulted in several evacuations along coastal regions.
The price gouging statute applies for 30 days after a declaration of emergency, but for reconstruction services and emergency cleanup services, it applies for 180 days after a declaration of emergency has been made. State and local officials may extend the effective period of the statute beyond these timeframes. The ban is in effect in areas like Santa Monica that may not have been directly impacted by the fires.
For rental housing that was not rented or advertised for rent before a declaration of emergency, the price cannot exceed 160 percent of the fair market value of the rental housing, as established by the U.S. Department of Housing and Urban Development.
A landlord may not justify an unlawful price increase by providing additional services such as gardening, cleaning, or utilities, or because they are now offering a shorter lease-term. A landlord may not charge more than the allowable price because an insurance company offered to pay a higher price.
The California Department of Justice declared that the price gouging statute makes it a separate misdemeanor for a landlord to evict a tenant and then re-rent the property at a rate that the landlord would have been prohibited from charging the evicted tenant under the price gouging statute.
The price gouging law applies to both businesses and individuals. Prices can be increased by more than 10 percent only if the costs of providing the goods or services increased by their respectful companies. Both businesses and consumers should save receipts and records of prices in the event of malpractice.
If a seller can prove that the increased price is directly attributable to increases in the cost of labor or materials needed to provide the good or service, the seller may not be liable under the statute.
For anyone who thinks they have been subjected to price gouging in Santa Monica, contact the Consumer Protection Division at 310-458-8336 or smconsumer.org. For price gouging in the Los Angeles County, contact the Department of Consumer and Business Affairs at dcba.lacounty.gov.