California attorney general charges L.A.-area real estate agent with price gouging in wake of wildfires

A real estate agent in La Cañada Flintridge is facing criminal charges for allegedly raising the price of a rental property by 38% after the devastating wildfires in Los Angeles, California Atty. Gen. Rob Bonta said Wednesday.

“May this announcement serve as a stern warning to those who would seek to further victimize those who have lost everything,” Bonta said in a release. “DOJ is aggressively and relentlessly pursuing those who are trying to make a quick buck off someone else’s pain.”

A couple who lost their home in the Eaton fire attempted to rent a home in La Cañada Flintridge from real estate agent Mike Kobeissi, according to a Justice Department investigation. But after the application was received, the couple was informed the price had gone up by 38%, the investigation found. The couple decided not to rent the house due to the increase.

California law prohibits raising prices for rental properties and other essential goods and services by more than 10% following a natural disaster. The rules remain in effect until March 8 unless further extended by Gov. Gavin Newsom.

Kobeissi said in an interview that he did not engage in price gouging and the charges are misplaced. He said he increased the price from $8,700 a month to $12,000 after confirming that the home was within the boundaries of the well-regarded La Cañada Flintridge school district. The higher price, Kobeissi said, was comparable to other rentals in the neighborhood.

“It had nothing to do with the fires or anything,” Kobeissi said.

Kobeissi said he received offers from prospective tenants for $14,000 and $16,000, but he and the property owner decided to rent it for under $10,000 to fire victims. The owner also provide a free month of rent and furniture, Kobeissi said.

“Right now, the home is rented way below the market,” he said.

On his website, Kobeissi describes himself as one of the top Realtors in La Cañada Flintridge with more than 25 years of experience. His firm has sold homes in the community for as much as $11 million, the site says.

The charges against him are damaging to his reputation and belie his efforts to support the community in the wake of the disasters, he said. Yesterday, he said he hosted a dozen firefighters at his house for lunch.

“I’ve been helping people one after another,” Kobeissi said.

The charges filed in Los Angeles County Superior Court against Kobeissi on Tuesday are the first for price gouging related to the historic fires that struck Jan. 7. Violations are subject to criminal prosecution that can result in one year in county jail and fines of up to $10,000. Civil penalties include fines of up to $2,500 per violation.

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With more than 11,000 homes destroyed in Eaton and Palisades fires, a crush of families were thrown overnight into L.A.’s already tight rental market. Widespread reports of price gouging have followed, with Times reporters identifying examples of listings increased 60% or more, while activist groups have scoured Zillow and other sites to identify hundreds of possible instances and file complaints with authorities.

Bonta has enlisted teams of his attorneys around the state to evaluate the submissions and issued numerous statements decrying price gouging. Los Angeles County Dist. Atty. Nathan Hochman and other local elected officials have echoed the calls.

Bonta said he’s sent more than 500 warning letters to landlords and hotel operators accused of price gouging and announced his office has more criminal investigations ongoing.

“As I have said repeatedly, the price gouging must stop,” Bonta said. “Today, we are making good on our promise to hold price gougers accountable, with more to come.”