California Rent Gouging Laws

[Jim T.]

In late 2017, Governor declared a few counties in California "Disaster Areas" and CPC 396 comes into play forbidding rent increases exceeding 10% for the 30 days after the declaration. According to CPC 396, it can be extended up to 6 months. Well, Governor Newsom extended it at the end of 2018 for another year and just extended it for yet another year (until December 2020). 

The wording of this ordinance seems to say the rent can't be raised above 10% above where it wss before the disaster was called. It seems CA is using this as some sort of rent control by prohibiting increases that total over 10% for the entire 2+ years (and counting) years. 

Is my assumption correct? 

[Elizabeth Goff]

@Jim T. I was wondering about that too and in fact there are many things about this law that are unclear to me!  I actually have reached out to the Attorney General's office to gain clarification on (1) the date of the price base (2017 or more recent declaration in Oct 2019), (2) what increase in expenses can be added on top (property taxes, maintenance, etc), and (3) length of lease for which this applies.  I'm finding there are a range of interpretations of the law (and I'm currently in battle with my PM about it). It seems it was confirmed in a letter from the AG to the Nor Cal Assoc of Realtors in 2017 (see link) that it is only for units with initial leases of a year or less, which I think is huge for landlords.  So if your initial lease with the tenant was over a year I think you should be fine (mine is 12.5 months, perfect). And I think for new leases, as long as those are OVER a year, it does not apply.  (That said, this post does not constitute legal advice, ha ha, but I think a letter from the AG is about as good as it gets!)  My thought and fear is that the 'state of emergency' will probably keep on getting extended indefinitely as we are going to keep on having fires every year, unfortunately.... so important to understand and fight if possible (especially if the price base is set at 2017). I will keep you posted on what I find out.

https://oag.ca.gov/system/files/attachments/press_releases/10-16-17%20North%20Bay%20Assn%20of%20Realtors_Anti-Price%20Gouging%20Letter%20from%20the%20AG.pdf