Landlords in California: What You Need to Know About the State’s Anti-Price Gouging Law

If you have a rental property in an area that’s been affected by a disaster, you likely feel an increased responsibility to help those searching for a safe place to live. You may even be directly affected by the events yourself, and if so, there are resources available to help you.

What you might not realize, however, is that there are also legal responsibilities to be aware of when renting out your property during a declared state of emergency. These include complying with California’s anti-price gouging laws and eviction protections for tenants sheltering displaced fire survivors.

At Zillow Rentals, we aim to equip our California landlord partners with information and resources to navigate these requirements Below, we’ll explain what this means for you as a housing provider and how you can ensure you’re following the law while continuing to support your community. It’s important to note that failing to comply not only violates state law, it also goes against our platform’s policies, which require:

• Compliance with laws and regulations: All landlords must follow applicable state, federal, and local laws, including prohibitions on price gouging after an emergency has been declared.
• Fairness and transparency: Our Respectful Renting Pledge requires that users treat others honestly, fairly, and with respect.

What is California’s Anti-Price Gouging Law? 

California’s Penal Code Section 396 is designed to prevent price gouging during times of crisis by prohibiting excessive and unjustified price increases on essential goods and services, including rental housing, during and shortly after a declared state of emergency. This rule applies to goods and services that are considered vital to the health, safety, and welfare of the public, such as food, medical supplies, emergency services, and housing.

For rental housing specifically:

• Current tenants: Landlords may not raise rents for existing tenants by more than 10%. Landlords should also consult their lease terms and be aware of any local rent control ordinances to which their property may be subject. 
• Current vacancies: For housing that was vacant at the time of the declaration, but was previously rented or offered for rent within the last year, landlords may not raise the asking rent more than 10% above the most recent rental price offered before the declaration.
• Future vacancies: For housing not rented or offered for rent in the past year, the rent offered cannot exceed 160% of HUD's fair market rent for the area. In Ventura County, this amount may be increased by 5% if the housing is offered for rent fully furnished. Additional requirements may apply if the property is subject to local rent control requirements and was rented at the time of the declaration. 

Violating this law can result in penalties including fines, jail time and additional civil liabilities.

Housing providers should also be aware that in addition to statewide price gouging rules, there may be other local emergency proclamations at the city or county level, which can apply to their property.

Are there any exceptions?

California law may allow a greater rent increase, but only if:

• The increase is directly attributable to additional costs for repairs or additions beyond normal maintenance that are amortized over the rental term.
• The increase was contractually agreed to by the tenant prior to the state of emergency being declared. 

Without such justification, any rent increase above the statutory limits runs the risk of violating the law. If you’re unsure, it’s best to consult with a local attorney to ensure compliance and avoid potential penalties.

Eviction protections during the state of emergency 

In addition to price gouging restrictions, landlords should be aware of new eviction protections announced under Governor Gavin Newsom’s executive order on Jan 17, 2025. 

The order prohibits landlords from evicting tenants who violate their lease by letting people displaced by the Southern California wildfires stay with them. This protection does not apply to other lease violations, such as criminal activity or property damage.

These eviction protections are in place until March 8, 2025, and are intended to support recovery efforts and protect vulnerable renters during this challenging time.

What can I do to ensure legal requirements are followed after a disaster?

As a landlord, here’s how you can stay informed and compliant: 

1. Check Emergency Declarations: Stay updated on state emergency declarations that apply to your rental property. 
2. Communicate with Tenants: Make sure your tenants are also aware of the law, especially if you allow subletting.
3. Seek Legal Advice: If you have questions about price increases, eviction policies, or other legal requirements, consult a local attorney to ensure compliance with California law.

Resources for landlords and renters

For more information on California price gouging laws, you can visit the California Attorney General’s website. If you believe a violation has occurred, you can file a report online or contact local law enforcement.

Additionally, disaster assistance may be available to those affected. Visit www.DisasterAssistance.gov or call 1-800-621-3362 for support.

Disclaimer:

This blog post is provided for informational purposes only and is not intended as legal advice. Zillow does not guarantee the applicability of the information provided to your specific circumstances. For questions about your obligations under the law, we recommend consulting a qualified attorney or legal professional.