GLENDALE, Calif. (CNS) -- Following the devastating wildfires in Southern California earlier this month, investigations have uncovered alleged price gouging by local real estate agents. California Attorney General Rob Bonta announced charges against Lar Sevan Chouljian, who reportedly raised the rental price of a home by 50% after the declaration of a state of emergency on January 7, 2025.
With the emergency proclamation resulting from the wildfires affecting Los Angeles and Ventura counties, California law prohibits price increases greater than 10% for the sale of covered goods, including rental housing, within the first 30 days following such declarations. Attorney General Bonta emphasized the state’s commitment to protect consumers from exploitation during natural disasters, stating, “Today’s charges are another example of DOJ's commitment to put an end to price gouging.”
The investigation revealed Chouljian allegedly offered a displaced family—evacuated due to the Eaton Fire—a rental price exceeding the original listing by more than half. Bonta declared this behavior unacceptable, asserting, “in the face of natural disaster, we should be coming together to help our neighbors, not attempting to profit off their pain.”
Chouljian's arraignment is scheduled for March 4, 2025, at Los Angeles Superior Court, and she could face up to one year of jail time and/or up to $10,000 in fines if convicted. Notably, earlier charges were filed against another agent, Mike Kobeissi, for allegedly raising the price of another rental property by 38% after the wildfires.
The scrutiny on pricing practices follows numerous complaints received by the Department of Justice (DOJ). To date, the DOJ has sent more than 650 warning letters to landlords and hotel operators suspected of engaging in price gouging. Their warnings aim to deter exploitation during the recovery from the wildfires, with Bonta promising enforcement of the anti-price gouging laws.
Legal guidelines dictate specificities around price increases during emergencies. For example, if goods or services were sold after the declaration of emergency, sellers are limited to marking up prices by no more than 50% of their cost. Violation of these laws can incur significant financial penalties or civil fines.
While Chouljian maintains her innocence, claiming the rental price adhered to legal limitations, the repercussions pose serious risks for real estate agents who may attempt similar practices. “There was absolutely no price gouging involved, and in fact, the property closed under the 10 percent limit,” she stated, responding to the charges through social media.
The California Department of Justice outlines clear steps for the public to report suspected price gouging. Citizens may file reports online or contact the hotline at (800) 952-5225, and are encouraged to gather evidence, including screenshots of listings and private communications to support their claims.
Further compounding the issue, Zillow, the popular real estate platform, announced their commitment to address potential price gouging by flagging listings and removing those violating state laws. A spokesperson for Zillow stated, “This includes flagging potential violations and removing listings with price increases exceeding the state of emergency threshold.” They also encouraged renters to report violations as part of their responsibility to uphold consumer protections.
The price gouging laws are framed within broader consumer protections, aiming to prevent exploitation during times of emergency. They are applicable not only to California-based businesses but extend to all sellers, including national and online retailers. This broad interpretation is intended to minimize unregulated practices during crises.
Moving forward, legal experts suggest businesses and real estate agencies exercise diligence to document their pricing practices to comply with the heightened scrutiny following these wildfires.
The state’s commitment to clamp down on price gouging within the real estate market is clear. Whether through enforcement actions or public education efforts, officials are determined to protect consumers from undue financial strain during this challenging time.
Attorney General Bonta’s strong stance aims to send the message to anyone contemplating exploitation of wildfire victims: the state will not tolerate price gouging. “May this announcement serve as a stern warning to those who would seek to ... profit off their pain,” he concluded.