California AG files first charges over alleged post-fire rent gouging

California Attorney General Rob Bonta filed criminal charges Tuesday against a Los Angeles County real estate agent accused of violating the state’s ban on post-disaster price gouging.

The accusation

Mike Kobeissi — who describes himself online as La Cañada Flintridge’s top agent — faces one misdemeanor count of price gouging. The attorney general's office says he “unlawfully raised the rental price” on a property after the governor’s emergency declaration banning post-fire price hikes of more than 10%.

Violations of the price-gouging prohibition are punishable by a fine of up to $10,000 and jail time of up to one year.

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Bonta’s office said that the charges stem from a complaint by a couple who were displaced by the fires and then applied to rent a home. The couple was then told that the price had gone up by 38%, according to the release.

The agent's response

In a call with LAist, Kobeissi strongly denied asking prospective tenants to pay more than 10% above pre-fire rates. He identified himself as the listing agent for a four-bedroom house in La Cañada Flintridge, which he said was advertised before the fires at $8,700 per month.

After the fires, Kobeissi said, offers above the asking rent started pouring in, but the owner ultimately decided to rent to a household displaced by the fires for less than 10% above the original asking rent.

“It's all wrong,” Kobeissi said of the charges against him. “I should be rewarded. ... It's completely opposite, what they are claiming.”

A spokesperson for the attorney general's office, when asked for more detail, noted that an arraignment had been scheduled but would not comment further.

The backstory 

In the days after the Palisades and Eton fires destroyed thousands of homes, displaced L.A. residents began noticing huge jumps in asking rents on platforms like Zillow.

Prosecutors responded by saying they would charge landlords and real estate agents found to be breaking the law. Bonta has said more rent gouging investigations are in the works.

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What's next?

Kobeissi's arraignment is scheduled for March 4.

Bonta encouraged L.A. residents to continue reporting cases of suspected price gouging through his office’s website or by calling (800) 952-5225.