Housing

OAKLAND — California Attorney General Bonta today filed a lawsuit against a group of property management and real estate holding companies owned by Southern California rental-housing tycoon Swaranjit “Mike” Nijjar, his sister Daljit “DJ” Kler, and other members of his family. The lawsuit filed today, after a three-year investigation, alleges Nijjar’s companies, commonly known as PAMA Management, egregiously violated numerous California laws by subjecting tenants to unsafe units marked by cockroach and rodent infestations, leaking roofs, overflowing sewage, and other problems. The lawsuit also alleges that the companies discriminate against applicants with Section 8 housing vouchers, overcharge some tenants for rent, and use leases that deceive tenants about their legal rights, among other violations. Most tenants living in PAMA properties have low or fixed incomes, and many are faced with the horrible choice between enduring serious and sometimes catastrophic conditions or becoming homeless. In the complaint filed today in Los Angeles County, Attorney General Bonta seeks penalties, full restitution for financial harm to tenants, disgorgement of ill-gotten gains, and injunctive relief barring Mr. Nijjar, PAMA, and related companies from continuing these unlawful and appalling business practices. 

“PAMA and the companies owned by Mike Nijjar and his family are notorious for their rampant, slum-like conditions — some so bad that residents have suffered tragic results. Our investigation into Nijjar’s properties revealed PAMA exploited vulnerable families, refusing to invest the resources needed to eradicate pest infestations, fix outdated roofs, and install functioning plumbing systems, all while deceiving tenants about their rights to sue their landlord and demand repairs,” said Attorney General Bonta. “Nijjar and his associates have treated lawsuit after lawsuit and code violation after code violation as the cost of doing business and have been allowed to operate and collect hundreds of millions of dollars each year from families who sleep, shower, and feed their children in unhealthy and deplorable conditions. Enough is enough — today, I step in. I am grateful to all the people who came forward, including the DOJ Consumer Protection Team, California reporters who sounded the alarm, local code enforcement officers who tirelessly respond to tenant complaints, and, most of all, PAMA tenants who spoke out about their distressing experiences.” 

Background 

The Nijjar family and their related companies own and manage over 22,000 rental housing units statewide, primarily in low-income neighborhoods in Los Angeles, Riverside, San Bernardino, and Kern Counties — but also spanning up to Sacramento and San Joaquin Counties. Code enforcement officers in these communities routinely cite the Nijjar family’s properties for violating minimum habitability standards. In recent years, the family’s companies have settled dozens of lawsuits alleging habitability defects and unsafe conditions; these lawsuits have involved hundreds of tenants, including some children who have become seriously injured at PAMA properties. In 2016, an infant died in a fire at one of PAMA’s mobile homes in Kern County — which was not permitted for human occupancy. 

Through this all, it has been business as usual for Mike Nijjar and his corporate entities, which continue to buy new properties, ignore tenants’ pleas for repairs, and operate under an expanding list of company names that makes it difficult for tenants to understand who they are renting from. Tenants may know them by the names of their current and recent property management companies: not only PAMA Management, but also, I E Rental Homes, Bridge Management, Equity Management, Golden Management, Hightower Management, Legacy Management, Mobile Management, Pro Management, and Regency Management. 

Following extensive reporting from the press and stakeholders, the California Department of Justice began an investigation into PAMA in late 2022 that uncovered widespread habitability violations and other egregious violations of tenants’ rights. 

Violation of Basic Habitability Standards 

The Attorney General’s lawsuit alleges that, through their failure to properly maintain units, PAMA and related companies put tenant safety and health at immediate risk. While PAMA units suffer from extensive maintenance issues, among the most common are:

• water intrusion from leaking roofs and outdated plumbing; 
• structural damage caused by water intrusion and deferred maintenance;
• malfunctioning plumbing, including surfacing sewage; and 
• cockroach and rodent infestations. 

These violations are not just a mistake; they are part of ongoing business practices. PAMA defers necessary investments in maintenance in favor of quick and cheap repairs; uses unskilled handymen even for specialized work; provides little to no training to staff, many of whom have no experience in property management; and fails to track maintenance requests in any systematic, routine fashion — requests are often lost or never completed. PAMA is aware of these issues and knows their operations lead to uninhabitable conditions, yet these business practices have persisted for years.

Deceptive Lease Terms

The lawsuit also alleges that PAMA and related companies entered into tens of thousands of leases with unlawful and deceptive terms that attempt to invalidate rights guaranteed by law. Such rights include the tenant’s right to sue their landlord and present their case to a jury; to make repairs that the landlord neglected and deduct the cost of such repairs from rent; and to have the landlord exercise a duty of care to prevent personal injury or personal property damage.

PAMA also violated California law by refusing to provide Spanish translations of these leases and other important documents, despite intentionally soliciting Spanish-speaking tenants through dual-language advertising and the hiring of Spanish-speaking employees to fill vacant units and communicate with tenants.  

Discrimination against Tenants with Section 8 Vouchers

The lawsuit further alleges that PAMA and related companies discriminate against applicants with Section 8 vouchers who are looking for a home. Section 8 vouchers help low-income families rent housing from private landlords, allowing the family to pay part of the rent while the government pays the rest. In California, it is unlawful to discriminate against a tenant or housing applicant based on their source of income, including their receipt of Section 8 rental assistance. Management companies related to PAMA have violated the law by telling applicants with vouchers that there is a waiting list for units, or that no rental units are available, even when units are in fact available and are being rented to applicants without Section 8 vouchers. 

Unlawful Rent Increases and Other Misconduct

The Attorney General’s lawsuit also alleges violations of California’s Tenant Protection Act (TPA) at over 2,000 units, where PAMA and related companies shifted certain mandatory utilities costs — which used to be paid by the landlord — onto their tenants. For tenants protected by the TPA, it is unlawful for landlords to ignore the rent cap when requiring tenants to pay new or increased fees or utility charges. The complaint alleges that these companies began charging tenants for shared utilities, like water, through a ratio utility billing system, known as “RUBS,” forcing tenants to pay for utility charges beyond their control. The combination of these new utility fees and annual rent increases resulted in total increases of up to 20% — more than double the TPA’s rent cap. Furthermore, PAMA and related companies violated the TPA’s notice requirements by failing to include in tenants’ leases legally mandated disclosures to let a tenant know whether the TPA’s protections — which include rent-increase controls and limitations on evictions — apply to them. 

In addition to the violations above, the lawsuit alleges that PAMA and related companies issued unlawful eviction notices to dozens or hundreds of tenants, and also that the companies have failed to comply with basic real-estate licensing requirements since 2020.

Anyone – including current or former tenants – who has information that might be relevant to this case are encouraged to share their stories with our office by going to oag.ca.gov/report. To learn more about your rights as a tenant, please visit here.  

A copy of the complaint can be found here. 

A Spanish version of this press release can be found here. 

 Alert emphasizes the importance of lawful and consistent processing of Builder’s Remedy applications across California 

OAKLAND — California Attorney General Rob Bonta today issued a legal alert to help California local officials understand the importance of the consistent statewide interpretation and application of California’s Housing Accountability Act (HAA) — including local governments’ responsibility to timely process Builder’s Remedy applications. In the alert, Attorney General Bonta analyzes two recent court cases involving the cities of La Cañada Flintridge and Goleta to explain these responsibilities and highlight that local governments' faithful and expedient discharge of their duties is essential to resolving California’s housing shortage crisis and making housing more affordable for all Californians. 

 “California courts have been very clear about the interpretation of California housing law and the responsibility of local governments to follow the law and swiftly process Builder’s Remedy applications,” said Attorney General Bonta. “The legal alert today is intended to ensure local governments understand their responsibility to facilitate affordable housing: California expects nothing less and is committed to ensuring that all cities and counties are part of the solution — no exceptions.” 

Background on Housing Element and the Builders Remedy

Under the state’s Housing Element Law, every city and county in California must periodically update its housing element to meet its share of the regional and statewide housing needs. Among other things, a compliant housing element must include an assessment of housing needs, an inventory of resources and constraints relevant to meeting those needs, and a program to implement the policies, goals, and objectives of the housing element. 

Under California’s HAA, failure to adopt a timely and compliant local housing plan triggers the so-called “Builder’s Remedy.” Under the HAA's Builder’s Remedy provision, local governments subject to the Builder’s Remedy may not deny certain housing projects — in particular, those that include certain thresholds of low- or moderate-income units — for inconsistency with zoning or land use designation. While developers have submitted dozens of Builder’s Remedy applications in the past years, many noncompliant jurisdictions have been failing to process those applications in a timely fashion, leaving the state of California no choice but to step in. 

In the legal alert today, Attorney General Bonta highlights the results of two cases that make clear local governments’ responsibility and legal duty to process builders remedy applications. 

Cal. Housing Defense Fund v. City of La Cañada Flintridge 

In 2023, Attorney General Bonta, Governor Newsom, and the California Department of Housing and Community Development (HCD) filed a request to intervene in Cal. Housing Defense Fund v. City of La Cañada Flintridge, in order to uphold California’s housing laws, and reverse the City of La Cañada Flintridge’s denial of a mixed-use affordable housing project after it failed to comply with Housing Element Law between October 15, 2021 and November 17, 2023 —  also the time period in which the project’s application was considered. The affordable housing project, pursuant to the Builder’s Remedy, would bring approximately 80 mixed-income residential dwelling units, 14 hotel units, and 7,791 square feet of office space to the community. 

In 2024, the court held that La Cañada Flintridge did not have a housing element in substantial compliance with state law at the time a Builder’s Remedy application was submitted and ordered the City to process the application in accordance with the law. La Cañada Flintridge appealed this decision and was subsequently ordered to either post an appeal bond of $14 million or dismiss its appeal. La Cañada Flintridge dismissed its appeal. 

The key takeaways in this case include: 

• A Builder’s Remedy application vests at the time of submission of a SB 330 preliminary development application — a city cannot ‘backdate’ its housing element compliance date to an earlier date so as to avoid approving a Builder’s Remedy application.
• The refusal to process a timely Builder’s Remedy application is a violation of the HAA.

Shelby Family Partnership, L.P. v. City of Goleta

In 2024, Attorney General Bonta filed an amicus brief in support of a proposed affordable housing project in Goleta — a city located in Santa Barbara County that is experiencing an acute housing shortage. A housing development project by the Shelby Family Partnership would have created 56 single-family homes, 13 of which would be affordable to lower-income households. In 2023, Goleta unlawfully refused to process an SB 330 preliminary application, seeking to add the aforementioned affordable homes, based on its theory that SB 330 applies only to “new” projects.

On February 26, 2025, the superior court issued an order requiring Goleta to process the at-issue affordable housing project pursuant to state law, finding that:

• SB 330 is not limited only to “new” development projects and does not prevent applicants from amending an existing project — including submitting an application under the Builder’s Remedy; and
• Local governments cannot disapprove qualifying housing development projects, except in narrowly defined circumstances pursuant to the HAA. 

The legal alert goes on to explain consequences for the failure to properly implement in the Builder’s Remedy, such as a referral to and intervention by the Attorney General and penalties under the HAA — including a minimum fine of $10,000 per unit of the proposed project. If a local government appeals a court order finding that the local government violated the HAA, the local government must post an appeal bond or dismiss its appeal. The appeal bond guarantees that a project remains financially viable if the city or county loses the appeal. In 2024, La Cañada Flintridge appealed the decision ordering it to process a lawful builder's remedy application, and was ordered to either post an appeal bond of $14 million or dismiss its appeal. La Cañada Flintridge dismissed its appeal. These consequences emphasize the importance of the HAA and California’s intent to further promote housing development projects. 

The full legal alert can be found here. 

Attorney General Bonta and Newsom Administration file amicus briefs siding with Newport Beach in lawsuits attacking City’s general plan

OAKLAND — California Attorney General Rob Bonta and California Department of Housing and Community Development (HCD) Director Gustavo Velasquez today announced that the Orange County Superior Court has granted their application to file amicus briefs in support of the City of Newport Beach’s efforts to comply with state housing law. Last year, two local organizations sued the City for taking steps to update and implement its housing element, or housing plan, as required under the state’s Housing Element Law. Specifically, the City amended its land use element to allow residential development in more of the City, adopted new overlay zoning districts to create more residential development capacity in six focus areas, adopted a set of objective development standards, and amended the City’s Local Coastal Program to be consistent with the City’s housing element. The local organizations suing the City contend that these changes must be approved by voters before they are effective because of a provision in the City’s charter. In their amicus briefs, Attorney General Bonta and the Newsom Administration agree with the City’s position that the City’s charter provision cannot be used to obstruct the state’s Housing Element Law.

“Too often, my office finds itself needing to hold local governments accountable for failing to follow our state’s housing laws. Right now, Newport Beach is attempting to do the right – and legal – thing, and I want to commend them for it,” said Attorney General Bonta. “In partnership with the Newsom Administration, we sought, and have received, court permission to file amicus briefs supporting the City’s efforts to build its fair share of housing. California is continuing to deal with a housing crisis of epic proportions. Now is the time for leaders at every level of government to say yes to cooperation and yes to more homes.”

“Newport Beach has done the work needed to adopt a compliant housing element, which is foundational to ensuring we meet state housing need for all income levels,” said HCD Director Gustavo Velasquez. “HCD is proud to stand with the City against efforts to stall implementation of its housing plan, and to help ensure the City remains compliant with Housing Element Law.”

The state’s Housing Element Law creates a comprehensive framework for statewide and regional coordination to ensure that each local government accommodates its fair share of new housing. Local governments must adopt general plans, and those general plans must include housing elements that substantially comply with the state’s Housing Element Law. Those housing elements must accommodate the housing “needs of all economic segments of the community.” At issue is Section 423, a provision in the City’s charter that subjects any major amendment to its general plan for voter approval before it can take effect. Critically, Section 423 also states that it “shall not apply if state or federal law precludes a vote of the voters on the amendment.”  

In their amicus briefs, Attorney General Bonta and the Newsom Administration underscore that: 

• In California, state law may preempt local law by implication if the local law contradicts or is inimical to the state law. Here, the City was legally required to complete rezoning to implement its housing element by February 12, 2025. Conditioning implementation of its housing element on the outcome of a Section 423 vote would render compliance with the Housing Element Law infeasible. 
• Vacating the City’s general plan amendment and zoning update with no legally sufficient alternative in place would violate the City’s housing element, which would in turn violate the state’s Housing Element Law. The City could face substantial legal consequences, including losing its permitting, subdivision, and rezoning authority. 
• If the City vacates the changes, it will no longer substantially comply with the state’s Housing Element Law, and the Builder’s Remedy will take effect. The Builder’s Remedy prevents local governments without compliant housing elements from using their local land use laws to deny certain types of new affordable housing developments. 
• The Builder’s Remedy is constitutional. One of the lawsuits argues that the Builder’s Remedy would not apply if the City was ordered to vacate the changes because the Builder’s Remedy violates the City’s home rule authority under the California Constitution. But the Builder’s Remedy is narrowly tailored to address the housing crisis, which is an issue of statewide concern.

A copy of the amicus briefs can be found here and here. A merits hearing is scheduled for June 17, 2025. 

OAKLAND — California Attorney General Rob Bonta today announced co-leading a coalition of 21 attorneys general in filing an amicus brief in support of non-profit housing organizations harmed by the Trump Administration’s unlawful cancellation of Fair Housing Initiatives Program (FHIP) grants. Congress established FHIP in 1988, requiring the U.S. Department of Housing and Urban Development (HUD) to provide funds to non-profit housing organizations that carry out investigatory, enforcement, education, and outreach activities aimed at rooting out discrimination in the provision of housing. Congress has specifically appropriated funds to HUD for this purpose every year since FHIP’s inception. 

On February 27, HUD cancelled 78 preexisting FHIP grants — totaling approximately $30 million — effective immediately and with no prior warning. HUD offered no rationale for its action beyond a blanket assertion that the decision was made at the direction of President Trump and the Department of Government Efficiency because the grants purportedly “no longer effectuate…the program goals or agency priorities.” Three non-profit housing organizations that receive FHIP grants subsequently filed a class-action lawsuit — Massachusetts Fair Housing Center v. HUD — against the Trump Administration on behalf of all similarly situated organizations that had FHIP grants terminated on February 27. California is home to at least 7 fair housing organizations whose FHIP funds would be terminated. 

“As I’ve said over and over again, the Trump Administration is not above the law. My fellow attorneys general and I are proud to be supporting non-profit organizations that Congress tasked to root out housing discrimination in our communities. The termination of these grants was illegal, and they must be reinstated,” said Attorney General Bonta. “The stakes are high — many of these non-profit organizations would be forced to close their doors without the grants and our states would suffer severe harms in tackling housing discrimination.” 

On March 26, 2025, the class of non-profit housing organizations secured a temporary restraining order from the U.S. District Court for the District of Massachusetts requiring the Trump Administration to continue providing the FHIP grants. The court, however, later dissolved the temporary restraining order and the non-profit housing organizations are currently asking that it be reinstated.  

In the amicus brief, which was filed in the U.S. Court of Appeals for the First Circuit, the attorneys general argue that: 

• If allowed to take effect, HUD’s sudden and unlawful action will immediately and severely upend the important work of these FHIP organizations, resulting in more housing discrimination being left undetected and unredressed in their states. 
• In several crucial ways, the work done by the non-profit housing organizations complements the efforts of their states to provide safe, fair, and affordable housing to their residents while easing administrative burdens on their states. For example, a FHIP organization in California brought significant evidence to the California Civil Rights Department demonstrating that a property-management company in the San Francisco Bay Area had adopted overly restrictive rules that effectively barred rental applications from families with young children. Based on that evidence, the Department filed a lawsuit, which yielded a consent decree in 2023 prohibiting these rules and requiring restitutionary payments to affected families. 
• The non-profit housing organizations are likely to succeed on the merits of their claims. HUD’s determination to void 78 preexisting FHIP grants, with no explanation or consideration of the consequences to their states and their residents and communities, was arbitrary and capricious in violation of the Administrative Procedure Act. 

Joining Attorney General Bonta in co-leading today’s amicus brief are New York Attorney General Leticia James and Massachusetts Attorney General Andrea Campbell. They are joined by the attorneys general of Arizona, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Illinois, Maine, Maryland, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, Oregon, Rhode Island, Vermont, and Washington. 

A copy of the amicus brief can be found here.

OAKLAND — California Attorney General Rob Bonta today issued the following statement in response to the decision by the U.S. Court of Appeals for the Ninth Circuit to deny the City of Huntington Beach’s petition for rehearing en banc in its federal lawsuit challenging the constitutionality of certain California housing laws. On October 30, 2024, a three-judge panel of the Ninth Circuit unanimously affirmed the district court’s dismissal of Huntington Beach’s federal lawsuit. The City subsequently petitioned for rehearing en banc, so that the full Ninth Circuit could hear its federal lawsuit. Today’s order notes that “[t]he matter failed to receive a majority of the votes of the nonrecused active judges in favor of en banc consideration.” This leaves in place the Ninth Circuit’s October 30, 2024 decision.  

“We are pleased that Huntington Beach’s latest attempt to exempt itself from our state’s housing laws has failed. All along, Governor Newsom and I have asserted that the City’s federal lawsuit is meritless and a waste of the public’s money,” said Attorney General Bonta. “Like every other city in California, Huntington Beach has a legal obligation to build its fair share of housing. We will be closely monitoring what the City decides to do next. Our state lawsuit against Huntington Beach is also on appeal. We remain confident we will prevail there, too.” 

A copy of the decision can be found here.

HomeOptions must terminate all liens and contracts in California and pay over $570,000 in penalties and restitution to homeowners 

OAKLAND — California Attorney General Rob Bonta today announced reaching a settlement with HomeOptions, a realty company based in Oakland that engaged in a predatory real estate scheme impacting over 500 California homeowners, and its Chief Executive Officer. In partnership with Napa County District Attorney Allison Haley and Santa Barbara County District Attorney John T. Savrnoch, Attorney General Bonta launched an investigation into HomeOptions that found the company lured financially vulnerable homeowners with an immediate payment of a couple hundred to a couple thousand dollars in exchange for the exclusive right to be the homeowner’s real estate listing agent for the next 20 years, entered into unlawful contracts with those homeowners, deceptively recorded liens against the homeowners’ homes, and forced homeowners to pay tens of thousands of dollars in illegal fees to remove those liens so that they could transfer title or obtain home loans. HomeOptions misrepresented the nature of its agreements, included unlawful breach and early termination penalty terms in its contracts, and violated California’s Real Estate Law, state and federal telemarketing laws, and federal lending laws. As part of the settlement, HomeOptions has agreed to terminate all liens and contracts in California, pay full restitution to victims, and pay civil penalties. 

“HomeOptions’ business practices can be summed up in one word: predatory. This settlement holds the company accountable and provides immediate relief to California homeowners,” said Attorney General Bonta. “Homeowners will regain full control over their homes, without having to worry about a HomeOptions lien ever again. And homeowners who have already paid early termination penalties to HomeOptions will get all of their money returned. Let there be no doubt that, in California, we will enforce the law against unscrupulous businesses that exploit vulnerable consumers.”

“Napa will not stand mute to the predation of those who victimize our citizenry,” said Napa County District Attorney Allison Haley. “I am gratified that by our action, all the exclusive listing agreements with California consumers are rendered void and unenforceable.”

“Homeowners are entitled to be safe in their homes and not fall prey to scams intended to extract their home equity,” said Santa Barbara County District Attorney John Savrnoch. “This settlement rightly provides full restitution to all victims and prevents HomeOptions and its CEO from engaging in these practices again.” 

The settlement announced today requires HomeOptions to: 

• Terminate all liens that it recorded on California homeowners’ homes. Because these liens clouded title, homeowners often could not transfer title or obtain home loans without paying HomeOptions to terminate those liens. By requiring termination of all liens, the settlement will likely save impacted homeowners tens of thousands of dollars each.
• Void all contracts that it entered into with California homeowners. These contracts required homeowners to pay steep fees if they did not use HomeOptions real estate agents. By voiding these contracts and requiring HomeOptions to stop any enforcement or collection efforts on these contracts, the settlement allows homeowners to list their homes with any real estate agent of their choosing and releases them from all obligations and payments to HomeOptions.
• Pay full restitution, totaling over $400,000, to homeowners who previously paid HomeOptions illegal fees, including to remove their liens.
• Pay approximately $170,000 in civil penalties.

California has passed legislation to prohibit predatory schemes like the one HomeOptions engaged in. On October 8, 2023, Governor Gavin Newsom signed into law AB 1345, which was authored by Assemblymember Gregg Hart (D-Santa Barbara), sponsored by Attorney General Bonta, and went into effect on January 1, 2024. AB 1345 imposes a two-year limit on residential exclusive listing agreements and prohibits the filing of those agreements with a county recorder. HomeOptions ceased entering into California homeowner agreements in 2024. 

A copy of the complaint can be found here. A copy of the stipulated judgment can be found here.

AB 1248 seeks to protect tenants from unfair and unpredictable fees  

OAKLAND — California Attorney General Rob Bonta, Assemblymember Matt Haney (D-San Francisco), and a prominent coalition of organizations today unveiled Assembly Bill 1248 (AB 1248), legislation that seeks to protect tenants from unpredictable and costly housing fees. In recent years, some landlords have adopted the practice of charging separate piecemeal fees in addition to the rent, which can cost tenants hundreds of dollars more each month on top of the base rent. This practice hinders tenants’ financial stability and ability to budget for housing and other needs — and hurts landlords who do not charge these fees by putting them at a competitive disadvantage and creating an unfair marketplace. The practice of charging separate piecemeal fees has become even more rampant since the enactment of California’s Tenant Protection Act (TPA), which provides statewide rent-increase protections. AB 1248 aims to prevent landlords from unbundling housing services — many of which have traditionally been covered by rent — and then charging additional, often mandatory, fees for those services. AB 1248 makes clear that landlords cannot play games with state rent caps by charging fees that amount to shadow rent increases or advertise a deceptively low rent. By prohibiting added fees, AB 1248 will help ensure that tenants’ housing payments remain stable and predictable, and that people can compare true costs when searching for housing within their budget. 

“When landlords tack on fees on top of rent it makes it almost impossible for families to compare housing costs or plan for monthly expenses. As it stands, the scarcity and high cost of housing means California's 17 million renters spend a significant portion of their paychecks on rent, with an estimated 150,000 people at risk of eviction any given month,” said Attorney General Rob Bonta. “The price of housing should be clear to California tenants in the same way that the cost of a concert ticket or a hotel is clear to California consumers. I thank Assemblymember Haney for introducing legislation to ensure California tenants receive the full protection afforded to them by the Tenant Protection Act. AB 1248 will help Californians’ housing payments remain straightforward, stable, and predictable.”

“Housing costs in California are already high, and added fees only make it harder for renters to budget and stay financially stable. These unfair and unpredictable costs are nothing more than a scam that drives up housing expenses and leaves tenants paying far more than they expected,” said Assemblymember Matt Haney (D-San Francisco). “AB 1248 ensures fairness by making sure the rent tenants agree to is the rent they actually pay. This bill will help protect Californians from misleading pricing practices and create a more honest and predictable rental market."

"Unfair fees in the rental housing market have exploded in recent years — far too many consumers feel the crushing burden of all these unpredictable fees on a monthly basis," said Robert Herrell, Executive Director of the Consumer Federation of California. "This bill by Assemblymember Haney will dramatically improve consumer protections so renters don't get taken advantage of. We are proud to co-sponsor this bill with Attorney General Bonta and other leading consumer housing advocates."

“Low-income renters need certainty in their monthly rent payments. Most of these tenants are already severely rent-burdened and struggling to retain their housing. The exploitive practice of adding on fees after a lease has already been signed or charging for services that had previously been included in rent makes it even harder for people to stay housed,” said Brian Augusta, Legislative Advocate, California Rural Legal Assistance Foundation. “We are proud to co-sponsor this measure with the Attorney General and the Consumer Federation and thank Assemblymember Haney for authoring it.” 

Co-authored by Attorney General Bonta during his time as a state assemblymember, the Tenant Protection Act (TPA) was signed into law by Governor Gavin Newsom in 2019. It created significant statewide protections for most tenants, including by limiting rent increases and prohibiting landlords from evicting tenants without just cause. Under the TPA, landlords cannot raise the gross rental rate more than 10% total or 5% plus the percentage change in the cost of living – whichever is lower – over a 12-month period.

Particularly since enactment of the TPA, an increasing number of landlords, including large corporate landlords, are charging tenants a proliferation of separate fees, including for services that should be and have historically been covered by the rent. For example, some landlords charge monthly fees for pest control, “trash concierge” services, and Ratio Utility Billing System (RUBS) fees where tenants are charged for a portion of the building’s utilities, like water and sewer, based on a complex formula with little transparency and that landlords can often change at any time, resulting in charges that can vary widely from month to month. These fees can add up to hundreds of dollars each month on top of rent.

By engaging in this practice, these landlords place significant burdens on tenants, including uncertainty about monthly housing costs due to variable or increasing fees, and create an unfair and confusing marketplace for prospective tenants and honest landlords — particularly small “mom and pop” landlords — who don’t engage in this deceptive pricing practice. If the combination of rent increases and new fees exceed the TPA’s rent cap, these landlords are also violating California law. 

With the number of various fee and fee increases, it may be difficult for tenants to keep track of their monthly payments. When a landlord applies a tenant’s payment to late fees or other obligations before applying it to the rent and then charges a late fee because they consider the rent to not be fully paid, it can create a spiral of rent debt for the tenant, which increases the risk of eviction for nonpayment of rent.

 AB 1248 would: 

• Require landlords to include all costs in the rent rather than charging separate fees.
• Create more predictable housing costs for existing tenants by preventing landlords from adding new fees during a tenancy.
• Require landlords to apply a tenant’s rent payment to their rent first, which will help prevent landlords from creating a debt spiral for tenants.

Text of this legislation can be found here.

In addition, DOJ has sent more than 700 price gouging warning letters to hotels and landlords

LOS ANGELES — California Attorney General Rob Bonta today announced the filing of charges against a Southern California real estate agent and a landlord for price gouging a victim who was evacuated due to the Eaton Fire. This investigation began when a complaint was filed with the California Department of Justice (DOJ) after the victim took steps to rent a Hermosa Beach home after the Governor’s Emergency Order, which protects against price gouging, went into effect. The investigation revealed that after the Emergency Order was in place, the defendants increased the rental price by 36%, which exceeded the 10% limit laid out in Penal Code section 396. The charge carries a potential penalty of a $10,000 maximum fine and the possibility of 12 months in jail. 

“The California Department of Justice remains focused on putting a stop to price gouging,” said Attorney General Bonta. “Following the devastating fires in Southern California, I have been urging the public to report price gouging to local authorities, or to my office at oag.ca.gov/report or by reaching out to our hotline at (800) 952-5225. Today, we’ve announced price gouging charges against both a real estate agent and a landlord for price gouging in the wake of the Eaton Fire. DOJ will continue relentlessly pursuing those who are trying to capitalize off of the chaos and pain of Southern California’s natural disaster.”  

As part of Attorney General Bonta's work to protect Californians following the Southern California wildfires, DOJ has also sent more than 700 warning letters – and counting – to hotels and landlords who have been accused of price gouging. In addition, the office has more active criminal investigations into price gouging underway.
 
Working alongside our District Attorneys, City Attorneys, and other law enforcement partners, DOJ has opened active investigations into price gouging as it continues to ramp up deployment of resources to Los Angeles County to investigate and prosecute price gouging, fraud, scams, and unsolicited low-ball offers on property during the state of emergency. DOJ has been working diligently to tackle this unlawful and unscrupulous conduct since a state of emergency was declared on January 7, 2025, and to further those efforts, the launch of a website dedicated to its response: oag.ca.gov/LAFires.
 
California law – specifically, Penal Code section 396 – generally prohibits charging a price that exceeds, by more than 10%, the price a seller charged for an item before a state or local declaration of emergency. For items a seller only began selling after an emergency declaration, the law generally prohibits charging a price that exceeds the seller's cost of the item by more than 50%. This law applies to those who sell food, emergency supplies, medical supplies, building materials, and gasoline. The law also applies to repair or reconstruction services, emergency cleanup services, transportation, freight and storage services, hotel accommodations, and long- and short-term rental housing. Exceptions to this prohibition exist if, for example, the price of labor, goods, or materials has increased for the business. 

Violators of the price gouging statute are subject to criminal prosecution that can result in a 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. The Attorney General and local prosecutors can enforce the statute.

TIPS FOR REPORTING PRICE GOUGING, SCAMS, FRAUD AND OTHER CRIMES:

1. Visit oag.ca.gov/LAfires or call our hotline at: (800) 952-5225.
2. Include screenshots of all correspondence including conversations, text messages, direct messages (DMs), and voicemails
3. Provide anything that shows what prices you were offered, when, and by whom.
4. If you’re on a site like Zillow, you can also send screenshots of the price history and a link to the listing. 
5. Include first and last names of the realtors, listing agents, or business owners you spoke to. Be sure to include phone numbers, email addresses, home and business addresses, websites, social media accounts.
6. Don't leave out any information that can help us find and contact the business or landlord.

Californians who believe they have been the victim of price gouging should report it to their local authorities or to the Attorney General at oag.ca.gov/LAfires. To view a list of all price gouging restrictions currently in effect as a result of proclamations by the Governor, please see here.

A copy of the complaint can be found here. 

OAKLAND — California Attorney General Rob Bonta today, alongside the U.S. Department of Justice and a bipartisan coalition of 10 attorneys general, filed an amended complaint against RealPage and the nation’s largest property management companies for maintaining an unlawful pricing alignment scheme that artificially raised rents and increased rent revenue across the board. Today’s amended complaint names five of the previously unnamed property management companies as defendants — including Camden, Cushman & Wakefield/Pinnacle, LivCor, Willow Bridge and Greystar — and seeks claims under California’s Unfair Competition Law against all defendants. Last August, the Attorney General filed a lawsuit against RealPage, alleging that its unlawful pricing alignment scheme and illegal sharing of confidential pricing and supply information harmed consumers by decreasing competition among landlords, limiting price negotiation, and increasing prices in the rental housing industry. This price alignment scheme affected rental housing throughout the country including in California —especially in multifamily buildings in Southern California including in Orange County, Anaheim, Santa Ana, Irvine, Los Angeles, Long Beach, Glendale, Riverside, San Bernardino, Ontario, Corona, Rancho Cucamonga, Upland, Temecula, Murrieta, San Diego, Coronado, and Carlsbad.

“When it comes reducing the cost of living for Californians, the California Department of Justice is all in. Today’s amended complaint against RealPage and some of the largest property management companies in the country, alleges that the companies artificially inflated rent prices and illegally maintained a minimum pricing floor against market trends, and that not only RealPage, but the landlords that profited from this scheme must be held accountable,” said Attorney General Bonta. “If you are in the renting business you are responsible for knowing and abiding by California laws. The housing affordability crisis hurts renters and those with the lowest incomes the hardest; the profits from these illegal schemes come out of the pockets of the people that can least afford it. California is stronger when we protect tenants and a competitive economy."

RealPage is in the business of generating rent increases and growing revenue for landlords by using algorithmic models to recommend price increases to subscribers. It does so by amassing competitively sensitive data from competing landlords through its pricing algorithms and sharing this data among subscribers. Landlords understand that their nonpublic data will be used to recommend prices not just for their own units, but also for competitors who use the programs, and agree to provide this information because they understand they will benefit from the information of their rivals. In other words, RealPage knows what competing landlords are charging and can increase profits for landlords by using that information to recommend landlords set or raise their prices uniformly, thereby eliminating competition, and leaving renters no choice but to pay artificially high prices.

Over the last four decades, housing needs have significantly outpaced housing production in California. Housing costs have skyrocketed, making it harder for Californians to keep a roof over their heads. California's 17 million renters spend a significant portion of their paychecks on rent, with an estimated 700,000 Californians at risk of eviction.    

The amended lawsuit filed today alleges that RealPage, Camden, Cushman & Wakefield/Pinnacle, LivCor, Willow Bridge and Greystar’s conduct violates both federal antitrust laws and California’s Unfair Competition Law. 

In filing the amended lawsuit, Attorney General Bonta joins the U.S. Department of Justice and the attorneys general of Colorado, Connecticut, Illinois, Massachusetts, Minnesota, North Carolina, Oregon, Tennessee, and Washington.

The amended complaint can be found here. 

OAKLAND — California Attorney General Rob Bonta today announced settlements with tenant screening company, RealPage, and property developer and manager, Holland (formally known as Holland Residential (California)), for violations of the COVID-19 Tenant Relief Act (Tenant Relief Act). The complaints allege that RealPage provided screening reports to housing providers, including Holland, which identified rental debt accrued due to the COVID-19 pandemic as a negative factor in violation of the Tenant Relief Act, and that many applicants were denied housing as a result. As part of the proposed settlements, RealPage must pay $625,000 in penalties and restitution, and both RealPage and Holland must comply with strong injunctive terms.

“As California navigates an unprecedented housing crisis, it’s critical that those most at risk of losing their homes are afforded the rental protections they deserve. COVID-19 rental debt cannot be used against tenants when they apply for housing,” said Attorney General Bonta. “Our settlements against RealPage and Holland underscore the responsibility that screening agencies and landlords hold in making sure they fully comply with California law. As the People’s Attorney, I am committed to using the full force of my office to ensure more Californians have access to safe and secure housing.”

In response to the pandemic, California enacted a series of emergency bills, collectively known as the COVID-19 Tenant Relief Act, to stabilize the housing market. These provided significant eviction protections to tenants, including creating restrictions on credit reporting and use of COVID-19 rental debt in rental screening. The Tenant Relief Act prohibits any housing provider, tenant screening company, or other entity that evaluates tenants on behalf of a housing provider from using COVID-19 rental debt as a negative factor in assessing a residential tenant application. 

RealPage violated the Tenant Relief Act by considering COVID-19 rental debt as a negative factor when screening over 2,500 tenant applicants in California, including several that were performed for Holland. As a result of the investigation by the California Department of Justice, RealPage and Holland have now modified their screening processes to ensure that they filter out COVID-19 rental debt. 

Under the settlements today, RealPage must pay $625,000 in penalties and restitution, and both RealPage and Holland must comply with strong injunctive terms, including, but not limited, to:  

• Regularly confirming the existence of proper filters for COVID-19 rental data with their data sources or filtering the data themselves, before using it in any tenant screening process.
• Tracking consumer disputes and reporting systemic issues to the Office of the Attorney General.
• Taking steps to investigate claims that a screening report may have contained COVID-19 rental debt and to ensure eligible tenants are not denied housing.
• Providing annual training to their employees regarding requirements under the Tenant Relief Act and related consumer reporting laws.
• Complying with the provisions of the Tenant Relief Act.

Attorney General Bonta is committed to ensuring tenants are treated fairly in accordance with the law and understand their rights. In October 2024, Attorney General Bonta issued consumer alerts regarding the maximum annual rent increase permitted under state law and summarizing several local rent control or rent stabilization laws throughout California. Alerts are available in various languages and can be found here.  

In August 2024, Attorney General Bonta, alongside the U.S. Department of Justice, filed a lawsuit against RealPage, alleging the company enabled landlords to artificially raise rents by participating in a pricing alignment scheme that increased prices in the rental housing industry. This lawsuit is ongoing and is unrelated to today’s settlement. 

In February 2024, Attorney General Bonta announced a settlement with two separate local Bakersfield landlords and their property management company, Clemmer & Company, for multiple violations of the Tenant Protection Act and for violation of the Fair Employment and Housing Act. Also in February 2024, Attorney General Bonta issued five consumer alerts advising California tenants of their rights and protections under state law and alerting property managers and landlords of their obligations to tenants. In January 2024, Attorney General Bonta announced a settlement with Invitation Homes resolving its alleged violations of the Tenant Protection Act and California’s anti-price gouging law, affecting approximately 1,900 households.

A copy of the complaints and final judgments against RealPage and Holland Residential (California) can be found here, here, here, and here, respectively.