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Making good on public threats to bad actors emerging in the wake of devastating wildfires, the California Attorney General has filed charges against a real estate agent for allegedly attempting to price gouge a couple searching for a rental property after losing their home to the fires.
On Tuesday, Attorney General Rob Bonta filed a criminal complaint against Mike Kobeissi, president and broker of Kobeissi Properties, alleging that he had “unlawfully raised the rental price advertised, offered, and charged” for a property in La Cañada Flintridge, California, by more than 10 percent after Governor Gavin Newsom declared a state of emergency in the state on Jan. 7.
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The neighborhood is located just west of Altadena, a community that has been severely impacted by the Eaton fire.
According to a press release from the California Attorney General’s office, the charges were made after a complaint was filed with the California Department of Justice after the couple completed the rental application and were subsequently informed that the rent price had risen by 38 percent. The press release says that the couple then decided not to rent the property.
Because the price increased by more than 10 percent after the governor’s emergency order went into effect, the charge was filed against Kobeissi, the press release says, which can carry a penalty of up to $10,000 in fines and up to 12 months in jail.
Mike Kobeissi | Kobeissi Properties
When Inman spoke with the broker in question on the phone, he said the California AG’s office had not got the facts right.
“I think that the district attorneys got their information wrong,” Kobeissi said. He explained that after learning that the property is within La Cañada Flintridge school district, he and the landlord he represents, who was not named in the criminal complaint, increased the rental price per month from $8,700 to $12,000, which Kobeissi said is still below the typical market value in that area.
According to Kobeissi, he said that the landlord did not want to raise the price further than that because he was aware that the tenants were fire victims. He ultimately decided to let the couple rent it for even less than $12,000 (he told The LA Times he rented it to them for $10,000 per month) and live in the property one month free of rent due to their situation as evacuees. And contrary to the Attorney General’s press release, Kobeissi said the couple are now renting the property.
“That’s what happened,” he told Inman. It’s all in writing and they have the lease. They are so happy that they got a great price.”
The AG’s office “got their facts completely wrong,” Kobeissi added, “and I’m hoping for an apology soon.”
Kobeissi said that he will be fighting the conviction and, contrary to this most recent report, has been doing all he can to help those impacted by the fires. He told The LA Times that he had even hosted lunch for a dozen firefighters at his house this week.
The charges are the first that have been filed related to price gouging in conjunction with the wildfires. It is estimated that more than 14,000 structures have been damaged or destroyed as a result of the Palisades and Eaton fires.
As many evacuees have sought out rentals in the wake of the fires, there have been increasing reports of price gouging. The California DOJ has sent 500 warning letters to hotels and landlords that have been accused of price gouging, the AG’s office said in its press release, with investigations ongoing.
“As I have said repeatedly, the price gouging must stop,” Attorney General Bonta said in a statement. “Today, we are making good on our promise to hold price gougers accountable, with more to come.
“May this announcement serve as a stern warning to those who would seek to further victimize those who have lost everything,” Bonta continued. “DOJ is aggressively and relentlessly pursuing those who are trying to make a quick buck off of someone else’s pain.”
