California Attorney General Rob Bonta has taken strong action against real estate agents engaging in price gouging following the devastating fires in Beverly Hills on January 7. In a recent statement, Bonta accused real estate agent Iman Shaghyan of increasing rental prices by more than 30% in the days following the disaster.
This marks the fourth charge Bonta has filed since price-gouging laws were enacted, prohibiting rent increases of over 10% after a natural disaster. “Profiting off Californians’ pain through price gouging is illegal and I will not stand for it,” stated Bonta in a recent news release.
In the aftermath of the fires, city officials pledged to combat price gouging aggressively, as numerous complaints emerged from concerned residents. Activists and residents organized to compile extensive spreadsheets documenting the spike in rents, prompting action from Bonta’s office, which mobilized teams of lawyers to review these complaints. The majority of Bonta’s efforts have focused on targeting real estate agents.
Despite these efforts, some critics argue that government officials are not doing enough to tackle the widespread price gouging observed in the region. Chelsea Kirk, co-founder of the activist organization Rent Brigade, expressed concern that the issue has been deprioritized, stating, “More needs to be done. It’s been de-prioritized, and all discourse from elected officials and the press around rent gouging has ended.”
Kirk’s organization actively monitors listings on Zillow to identify price gouging instances and claims there are over 10,000 active listings currently violating the price-gouging rules. They submit weekly reports to government officials but highlight concerns regarding transparency, as it remains unclear what specific investigations are underway.
In response to the situation, Kirk collaborated with L.A. City Councilmember Hugo Soto-Martínez to draft a motion that seeks to require L.A. City Attorney Hydee Feldstein Soto to deliver monthly reports detailing the number of price-gouging complaints received, response times, and actions taken. The motion has been introduced but is yet to be placed on the city council’s agenda.
Bonta’s recent charges extend beyond Iman Shaghyan. In January, he filed charges against La Cañada Flintridge agent Mike Kobeissi and Glendale agent Lar Sevan Chouljian. In February, he targeted Hermosa Beach agent Willie Baronet-Israel along with property landlord Edward Kushins. All four cases remain active, with potential convictions carrying a maximum penalty of one year in prison and a $10,000 fine.
The Attorney General’s office has not only pressed charges but has also dispatched over 750 warning letters to various hotels and landlords suspected of price gouging. Additionally, investigations are underway concerning potential fraud, scams, and low-ball offers on properties impacted by the fires.
While Bonta investigates these allegations on behalf of the state, Feldstein Soto is pursuing lawsuits on behalf of the city, broadening her focus beyond just real estate agents. In February, her office filed a lawsuit against rental company Blueground, citing several instances of price gouging, including a notable case where the rent for a downtown L.A. apartment increased by 56% on the day of the fires.
In March, Feldstein Soto’s office escalated its action, suing a group of homeowners and companies for a staggering $62 million. This lawsuit addressed not only price-gouging violations but also breaches of the city’s short-term rental ordinance pertaining to rentals like Airbnbs. The group of defendants includes several homeowners and limited liability companies.
In a proactive move, Feldstein Soto’s office sent more than 250 cease-and-desist letters to various property owners and management groups based on tips received concerning price gouging.
It’s critical to note that the current price-gouging policies are set to expire on July 1, adding urgency to the ongoing investigations and enforcement actions in California.
image source from：latimes
