Managing your own rental property in Los Angeles may seem like a way to save money. However, it can expose you to a complex maze of state and local regulations. One overlooked rule, missed deadline, or improper notice? You're facing expensive penalties, lawsuits, and even losing your right to rent altogether.
Landlords who fail to comply with California and Los Angeles rent control laws risk severe financial penalties, lawsuits, and reputational harm. The following cases demonstrate real-world consequences faced by property owners in the Los Angeles area.
$3.7 Million Settlement for Rent-Gouging
Case: Invitation Homes was ordered to pay $3.7 million in penalties and restitution. They were caught illegally raising rents above the state cap for 1,900 tenants between 2019 and 2022. Even the nation’s largest single-family home rental company can violate the laws.
Details: The California Attorney General found that the company increased rents beyond the 5% plus local CPI annual cap mandated by law. Under the settlement, Invitation Homes had to refund excess charges plus interest and pay substantial civil penalties.
Lesson: Even large institutional landlords are not immune from investigation and heavy fines for overcharging rent beyond legal limits. It also speaks to the benefit of having a more hands on property manager. Dividing focus across the nation can make it difficult to keep up with state mandates.
LA Rent-Gouging During Emergencies
Context: During declared emergencies, Los Angeles prohibits rent increases above 10%. There have been reports of landlords attempting rent hikes of up to 60% in Venice and over 100% in Santa Monica in the wake of wildfires. Proposed and actual fines can range from $10,000 up to $30,000 per violation.
Consequences: Violators of rent gouging laws during emergencies may face not only civil penalties and restitution, but also jail time in some cases. The city periodically increases fines to deter exploitative behaviors. Current wildfire protections were extended in 2025.
Lesson: As a property owner, one needs to be aware of the current laws as they relate to natural disasters. Exploiting a situation for profit may seem like a good idea. However, exploiting people in the short-term always leads to long-term blowback.
Tenant Lawsuits and Financial Penalties
Automatic Treble Damages: If landlords overcharge rent (or make improper, unjustified increases) then tenants may sue for the return of overpaid rent. This can sometimes be charged with interest. In certain cases, courts have awarded triple the damages to tenants.
Example: While the well-known Duncan v. Kihagi case originated in San Francisco, similar causes of action (wrongful eviction, harassment, and overcharging) regularly lead to multimillion-dollar judgments.
Penalties for Registration and Compliance Failures
Example: Under LA’s Rent Stabilization Ordinance, landlords failing to properly register rental units or pay annual fees are subject to stiff late penalties. Repeated failure can cause legal action by both the city and tenants. These will result in fines and possible disqualification from the ability to rent units.
Lawsuits Over Rent Freeze and Rent Control
Case: Landlords filed suit against the City of Los Angeles over the city’s rent freeze ordinance. The suit alleges that the freeze became “confiscatory” and denied landlords due process. While the result impacts landlords’ ability to contest rent control, it also highlights the complex legal landscape and the risks for those who attempt to circumvent (or misunderstand) city ordinances.
Real-life cases make it clear that violating rent control laws can result in millions in fines. Tenant lawsuits and government enforcement actions can do lasting damage to a landlord’s business and reputation. Strict compliance and professional guidance are vital. Anyone managing residential properties in California, and Los Angeles in particular, must be aware of the current laws. That's why having a boots on the ground property management team is so important.
