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By Adrian Reyna
June 18, 2025
In recent years, the United States generally and the State of California particularly have become all too familiar with declarations of states of emergency, such as during the COVID-19 pandemic and the recent Los Angeles wildfires. Because of this, California now seeks to implement additional protections to combat predatory practices such as rental price gouging during a crisis through Assembly Bill 380, which has passed the California Assembly and is headed to the State Senate. California landlords should be aware of AB 380 and its potential effects.
Specifically, the bill proposes additional restrictions on residential and commercial landlords applicable during periods following federal, state or local government declarations of emergencies as a result of earthquake, flood, fire, riot, storm, drought, disease (including epidemic, pandemic or diseases affecting animals or plants), or other natural or manmade disasters. It amends portions of the Penal Code that make it a crime to engage in what is generally considered price gouging — increasing the prices of goods or clean-up services, or increasing rent, following a declaration of emergency. In the real estate context, the current law only limits increases in rent for housing for 30 days following the declaration of emergency, subject to further extensions. Current law also prohibits a landlord from evicting an existing tenant for the purpose of leasing to a tenant at a higher rent.
If the Bill becomes law, similar limits and restrictions would apply to commercial properties as well as housing, and the bill would extend the time for protection against price gouging on rent to 180 days following the declaration of emergency. Business entities that violate the limits and restrictions are subject to being fined up to $25,000.00. Individuals who violate could face up to a year imprisonment and a fine up to $10,000.00. Other fines and penalties may be imposed under the portions of the Business and Professions Code governing unlawful business practices and unfair competition. The bill has been criticized as unduly interfering with contracts between sophisticated parties and preventing landowners from recovering increasing costs through rents.
There are exceptions for increases in rent to which parties agreed before a declaration of emergency and for evictions lawfully begun before a declaration of emergency. The portion of the law remaining unchanged by the bill also provides that it does not prevent a landlord from evicting a tenant for a “lawful reason”, including under the unlawful detainer statute; however, the scope of the exception is not entirely clear.
If you have any questions regarding Assembly Bill 380, please feel free to contact Michael J. Maher at mmaher@hechtsolberg.com or Adrian Reyna at areyna@hechtsolberg.com.