Proposed Price Gouging Law: What It Could Mean for the CRE Industry
The wildfires earlier this year were absolutely devastating, but our CRE industry rallied in many recovery efforts (that are sure to continue).
For example, CRE professionals contributing to BOMA/GLA’s Second Wave Support: Fire Recovery Donation Drive or participating in LA County Department of Economic Opportunity (DEO)’s Space Share platform.
The State Legislature is advancing proposed bills that could significantly impact the commercial real estate industry as part of the broader recovery effort.
We want to make sure the bills that could harm our industry are not passed.
What You Need to Know
Assembly Bill 380 seeks to modify Penal Code Section 396 by imposing stricter limits on price increases after declared emergencies. This can include prices of essential goods and services.
However, the bill also wants to place a limitation on rent increases for both residential and commercial properties after a declared emergency.
The bill would cap rent increases at 10% for properties rented or listed within a year before an emergency.
For unrented properties at the time, rent can't exceed 160% of HUD's fair market rate.
How It Impacts You
While AB 380 aims to protect consumers, it can have a major impact on commercial real estate.
If passed, property owners and managers would need to be sure to follow the 10% rent cap during emergencies or face fines and possible jail time.
As well as review leases to ensure rent increases comply with AB 380 during emergencies, including escalation clauses.
Stay Connected
Stay connected with BOMA on the Frontline for updates on this bill, as well as other news impacting members.
