Owner of Santa Rosa luxury apartment complex to pay $60,000 to settle price-gouging case

The owner of a luxury apartment complex in Santa Rosa has been ordered by a Sonoma County judge to pay nearly $60,000 in penalties and restitution on charges of price gouging in the wake of the 2017 wildfires.

FG Meadows, LLC, operator of the Meadows at Fountaingrove apartments, agreed to the settlement last month, according to the Sonoma County District Attorney’s Office.

Prosecutors said the company and its site managers hiked rents paid by roughly 20 tenants more than the 10% cap allowed by the state, as set by the state of emergency declared for the Northern California wildfires two years ago.

“This case is part of the ongoing efforts of my office to ensure that victims of the fire and residents are not further victimized by landlords taking advantage of the challenging rental market in Sonoma County,” District Attorney Jill Ravitch said in a statement.

The owner blamed a prior management company for the mistake and cooperated with prosecutors after a former tenant filed the price-gouging complaint, according to Caroline Fowler, a Sonoma County deputy district attorney.

“This was not the most egregious we’ve had,” said Fowler, a lead prosecutor on the case along with Deputy District Attorney Matt Cheever. “Once we notified them of having violating the law, they quickly?remedied the issue ?with their tenants.”

Judge Elliot Daum’s order resolves the allegations of unlawful business practices, specifically, price gouging, according to the District Attorney’s Office. FG Meadows, based in Santa Rosa, agreed to pay $40,000 in civil penalties, $13,000 in restitution to the affected tenants and $5,000 in investigation costs to the District Attorney’s Office.

The Meadows at Fountaingrove, located at 3587 and 3589 Round Barn Blvd., is a complex of two- and three-story buildings and includes one- and two-?bedroom apartments and two-bedroom townhomes. The large complex, located near Nagasawa Park and Thomas Lake Harris Open Space, also offers residents a heated pool, sun deck and fitness center.

A call to FG Meadows’ Santa Rosa office and an email requesting an interview resulted in an emailed statement from the company’s new site manager in Fountaingrove, Petaluma-based Basin Street Properties.

“These events occurred before Basin Street Properties took over management of FG Meadows in May 2018,” Jennifer Rahman, property manager at Meadows at Fountaingrove, said in the prepared statement. “The staff that was in place when this occurred no longer works at FG Meadows. We are committed to providing fair and safe housing, and invest in keeping our team trained on best practices.”

Under California law, a rent increase may not exceed 10% during a declared state of emergency. Violations can result in up to a year in jail and $10,000 in fines for criminal charges, and up to $5,000 in civil penalties for each charge.

The consumer protection was included in Gov. Jerry Brown’s declaration of emergency on Oct. 9, 2017, a day after the destructive Northern California firestorms erupted. The consumer protection measure has since been extended several times.

The state’s anti-gouging provision is set to expire Friday. Outside of Sonoma County, it covered Lake, Mendocino, Napa, Santa Barbara, Shasta and Siskiyou counties. Both Santa Rosa and Sonoma County have extended their own measures through at least July 21, meaning the rental caps will remain in effect through that time.

Current listings at the Meadows at Fountaingrove range from $2,300 for a 750-square-foot, one-bedroom unit to $2,500-plus for a 1,400-square-foot, two-bedroom townhome, according to the complex’s website.

The District Attorney’s Office continues to investigate two additional price-gouging cases against large apartment complexes, Fowler said. The resolution announced Thursday follows a similar case against Novato-based Admiral Callaghan Professional Center, LLC for rents over the legal limit on two complexes it owns in Santa Rosa and Rohnert Park. Those cases, resolved last year, resulted in more than $60,000 in civil penalties.

Ravitch’s office has taken the regional lead on investigation and filing of price-gouging allegations stemming from the 2017 fires. It has filed seven criminal cases against individuals under the law. Most of those were resolved through diversion programs that included tenant reimbursements, renegotiated leases at legal limits and community service hours.

The office pursued civil cases against FG Meadows, LLC and the Novato-based apartment owner because that option often leads to relief for affected tenants and restitution, Fowler said.