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Rent Gouging Rules in Effect - California State of Emergency

05/03/2020

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On Wednesday, March 4, Governor Gavin Newson declared a statewide emergency to address the global COVID-19 outbreak. While much of the declaration is specific to healthcare, these types of declarations include Penal Code 396 which prevents price gouging in times of emergencies, including the price of rental housing.

Rental owners and managers are reminded that rent increases over 10% are unlawful for the next 30 days. This applies to both existing and prospective residents. Properties that are exempt from AB 1482 (The Tenant Protection Act of 2019) should be mindful that the price gouging rules will place a cap on rents for the time being. This also impacts “vacancy decontrol,” or the ability to reset rent at a vacancy. Members are encouraged to read the SCRHA White Paper titled “CPC 396 - Anti-Price Gouging Rules - AB 1919.” AB 1919, passed into law in 2018, clarifies how Penal Code 396 applies to vacant rental property pricing.

AB 1919 also made it unlawful to evict a resident after the proclamation of a state of emergency for a period of 30 days following that proclamation and rent or offer to rent to another person at a rental price greater than the evicted tenant could be charged under this section. However, it is NOT unlawful to continue an eviction process that was begun prior to the proclamation. Additionally, the law does not prohibit an owner from evicting a tenant for any lawful reason, including pursuant to Section 1161 of the Code of Civil Procedure.

Attorney General Xavier Becerra also issued a reminder about price gouging. Click here to read more. More information about price gouging can be found on the Attorney General’s website. 

Members who are considering a rent increase over 10% or are pricing a vacant unit at 10% or more over the last rental rate charged, are recommended to contact an attorney before proceeding.

SCRHA will provide updates when the proclamation expires and/or is extended.