Davidovich Stein Law Group Cautions Landlords on L.A. City's State of Emergency In Effect

Davidovich Stein Law Group Cautions Landlords on L.A. City's State of Emergency Currently In Effect

The Davidovich Stein Law Group warns rental housing providers concerning the City of Los Angeles’ declared state of emergency due to homelessness that has been in effect since December 2022. According to the law firm, the declaration, initially made by Mayor Bass, has been extended multiple times, including on July 2, 2024, the Los Angeles City Council again extended the state of emergency for an additional 90 days.

The Davidovich Stein Law Group states, “the declaration activates the state price gouging statute, California Penal Code Section 396.” California Penal Code Section 396, also known as the state's anti-price gouging statute, prohibits businesses and landlords from raising prices by more than 10% during a state of emergency. California Penal Code Section 396 states, in part, the following:

“(b) Upon the proclamation of a state of emergency declared by the President of the United States or the Governor, or upon the declaration of a local emergency by an official, board, or other governing body vested with authority to make that declaration in any county, city, or city and county, and for a period of 30 days following that proclamation or declaration, it is unlawful for a person, contractor, business, or other entity to sell or offer to sell any consumer food items or goods, goods or services used for emergency cleanup, emergency supplies, medical supplies, home heating oil, building materials, housing, transportation, freight, and storage services, or gasoline or other motor fuels for a price of more than 10 percent greater than the price charged by that person for those goods or services immediately prior to the proclamation or declaration of emergency, or prior to a date set in the proclamation or declaration. However, a greater price increase is not unlawful if that person can prove that the increase in price was directly attributable to additional costs imposed on it by the supplier of the goods, or directly attributable to additional costs for labor or materials used to provide the services, during the state of emergency or local emergency, and the price is no more than 10 percent greater than the total of the cost to the seller plus the markup customarily applied by that seller for that good or service in the usual course of business immediately prior to the onset of the state of emergency or local emergency...”

Accordingly, this means that the declaration legally imposes a 10% rent increase limitation on housing within the City of Los Angeles, including single-family homes, condominiums, town homes, and new constructions, which might otherwise be exempt from rent stabilization or rent control.

In order to ensure compliance and avoid legal complications, the Davidovich Stein Law Group suggests rental housing providers take the following steps:

• Review current rental rates.
• Calculate the maximum allowable rent increase (10%).
• Adjust rental agreements and communications with tenants accordingly.
• Keep detailed records of all rent changes and communications.
• Always consult with legal experts if unsure about compliance.