A La Cañada Flintridge real estate agent is facing criminal charges for allegedly jacking up rental property prices by 38% after the devastating wildfires in Los Angeles, California. Gen. Rob Bonta said Wednesday.
“May this announcement serve as a stark warning to those who seek to further victimize those who have lost everything,” Bonta said in the release. “The Department of Justice aggressively and relentlessly pursues those who seek to make a quick buck off of the pain of others.”
A Justice Department investigation says a couple who lost their home in the Eaton fire tried to rent a La Cañada Flintridge home from real estate agent Mike Kovesi. However, after their application was accepted, the couple were told the price had increased by 38%, the investigation found. The couple decided not to rent their house because of rising prices.
California law prohibits increasing the price of rental properties and other essential goods and services by more than 10% after a natural disaster. The rule will remain in effect until March 8 unless extended further by Gov. Gavin Newsom.
Kobisi could not be reached for comment. Mr. Kobessi states on his website that he is one of La Cañada Flintridge’s top real estate agents with more than 25 years of experience. The site says his company has sold $11 million worth of homes in the community.
The charges filed Tuesday in Los Angeles County Superior Court are the first charges of price gouging related to the historic Jan. 7 fire. Violations are subject to criminal prosecution, which can result in up to one year in county jail and a fine of up to $10,000. Civil penalties include fines of up to $2,500 for each violation.
The Eaton and Palisades fires destroyed more than 11,000 homes and threw thousands of families overnight into L.A.’s already tight rental market. Since then, widespread reports of price gouging have followed, with Times reporters identifying listings that had increased in price by more than 60%, and activist groups combing Zillow and other sites to identify hundreds of potential listings. We have identified the case and lodged a complaint with the authorities.
Mr. Bonta asked a team of lawyers from around the state to evaluate the submissions and issued a number of statements condemning price gouging. Los Angeles Township Atty. Nathan Hockman and other local elected officials echoed the call.
Bonta said he had sent more than 500 warning letters to landlords and hotel operators accused of price gouging, and announced that his office was conducting further criminal investigations.
“As we have said repeatedly, price gouging must stop,” Bonta said. “Today, we are making good on our promise to hold price gougers accountable, and we have more to come.”
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