State prosecutors have filed charges against a real estate agent for allegedly trying to price-gouge a couple who were looking to rent a property in La Canada Flintridge after they lost their home in the devastating Eaton fire, officials said Wednesday.
But the real estate agent vehemently denied the accusations, saying state officials had made a mistake.
In the criminal complaint, Mike Kobeissi, who owns Kobeissi Properties, is accused of increasing the price listing for a rental property in La Canada Flintridge by 38% after the couple’s rental application had been completed, in violation of state law. The couple ultimately decided against renting the home due to the significant increase, officials said.
The state’s investigation began with a complaint filed in the wake of a Jan. 7 emergency order from Gov. Gavin Newsom, which protects fire victims from price gouging and limits price increases of things like rent, and other essential goods, to no more than 10% following a natural disaster, state Attorney General Rob Bonta said.
“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 prepared statement announcing the charges. “DOJ is aggressively and relentlessly pursuing those who are trying to make a quick buck off of someone else’s pain.”
Bu Kobeissi asserted in an interview Wednesday afternoon that Bonta’s accusations were misguided.
“There’s been a mistake,” Kobeissi claimed. He said the house was originally listed below the market price at $8,700 before it was increased to $12,000 after he learned the area had switched school districts, which affected the price. While the rent was increased a few days after the LA wildfires, the realtor said the fires “had nothing to do with it” and that the listing was “very fair” for the area.
According to Zillow Rentals, the median rent for a house in La Canada Flintridge is $13,000.
Kobeissi said the home was ultimately rented to a family affected by the wildfires, which agreed to pay the listed price. After learning about their situation, the property owner lowered the price to $9,570 and gave them a free month of rent and a $5,000 move-in allowance, according to the owner’s attorney, Ryan Stearns.
The state DOJ has also sent at least 500 warning letters to hotels and landlords who have been accused of price gouging. In addition, the office has more active criminal investigations into price gouging underway, Bonta said.
“As I have said repeatedly, the price gouging must stop,” the AG said in a statement.
Kobeissi was charged in Superior Court with misdemeanor price gouging on Tuesday after having allegedly “unlawfully raised the rental price advertised, offered, and charged” for housing in La Cañada Flintridge to the prospective tenants by more than 10% on Jan. 11, days after Newsom’s emergency declaration.
Violators of the price gouging statute are subject to criminal prosecution that can result in one-year imprisonment in county jail and/or a fine of up to $10,000. Violators are also subject to civil enforcement actions including civil penalties of up to $2,500 per violation, injunctive relief, and mandatory restitution, according to the DOJ.
The attorney general urged the public to report similar incidents to local authorities or his office by calling (800) 952-5225 or submitting a complaint online.