When emergencies like wildfires, earthquakes, or pandemics disrupt daily life, rent gouging is an exploitative practice. Move in at the higher rent, then use California Penal Code Section 396 to reverse the overcharge and hold unscrupulous landlords accountable. By signing the lease at the inflated price to secure the housing, you can later use the law to turn the tables.
Is It Rent Gouging?
- Occupied Units
If you are already renting a unit at the time of the emergency declaration, your landlord cannot raise your rent by more than 10% of the amount you were paying before the declaration.
- Units Offered for Rent
If a unit was advertised or offered for rent immediately prior to the proclamation or declaration of emergency, the landlord cannot increase the rental price by more than 10% of the advertised amount. For units offered for rent in the 364 days before the emergency declaration, the landlord cannot increase the rental price by more than 10% of the advertised amount.
- Newly Rented Units
For units not rented or offered for rent in the 365 days before the emergency declaration, landlords cannot charge more than 160% of the HUD Fair Market Rent (FMR) for that area. These protections typically last for 30 days after the emergency declaration but may be extended for up to a year if the emergency persists.
Exceptions to Be Aware Of
Landlords can justify increases beyond the 10% or 160% limits if they can provide valid documentation that the increase is directly tied to substantial repair or improvement costs due to the emergency.
Steps to Fight Rent Gouging
Step 1: Document the Price Change
Gather evidence of the prior rent, including listings or advertisements, and compare it to the inflated rent being charged. Take screenshots, save emails, or photograph any physical listings for proof.
Step 2: Move in at the Higher Rent
If necessary, sign the lease at the higher, gouged rent to secure the housing. This will allow you to gather further evidence while ensuring you have a safe place to live during the emergency.
Step 3: Demand the Landlord Lower the Rent
Politely but firmly demand that the landlord lower the rent to comply with California Penal Code Section 396. Provide them with the evidence you have gathered to support your case.
Step 4: Report the Violation
If the landlord refuses to comply, report the suspected gouging to the appropriate authorities:
- California Attorney General’s Office. Submit a complaint online at oag.ca.gov/report or call their Consumer Protection hotline.
- Local Law Enforcement. File a report with your city’s police department or district attorney’s office. Many jurisdictions have specific hotlines for price gouging.
- Local Housing Authorities. Many local housing departments can investigate rent gouging complaints during emergencies.
Step 5: File in Small Claims Court
File a claim in small claims court to recover overcharged rent. Small claims court is a tenant-friendly venue where you cannot have an attorney represent you, and you can sue for up to $12,500 in damages as of January 2024. This is an efficient way to seek justice without incurring high legal fees. Be mindful of the statute of limitations or timeframes within which you can bring your claim or forever lose the right to seek redress.
Step 6: Hire a Lawyer if Necessary
If the claim exceeds the small claims limit or requires more complex legal intervention, consult with a tenant rights nonprofit or hire an attorney experienced in housing law to pursue your case.
Conclusion
California Penal Code Section 396 offers essential protections against rent gouging during emergencies. Tenants should familiarize themselves with these rules, document any suspected violations, and report illegal rent increases to the proper authorities. Staying informed and proactive is key to protecting your rights and ensuring affordable housing during difficult times.
