The Ellis Act in California is the topic of this blog post. The Ellis Act provisions are found in Government Code sections 7060 through 7060.7 and are a state law which provides that landlords have the unconditional right to evict tenants to essentially go out of business.
For an Ellis Act eviction, the landlord must remove all of the units in the building from the rental market, this means that the landlord must evict all the tenants and can not single out that one tenant who may be paying a lower rent than every other tenant and/or remove just one unit from the rental market.
In the inevitable struggle between the right of a landlord to own and use their property as they wish to, and the right of a tenant to maintain their tenancy without interference from the landlord, California and, more particularly, the San Francisco Bay Area has been a battle ground for decades.
This battle has been fueled by a very expensive real estate market which encourages real estate investment and a growing population needing housing, a shortage of affordable housing has become a constant refrain of governments, tenant groups and proponents of restrictions on rent such as rent control and subsidized housing.
The legal restrictions on condominium conversion have resulted in a vibrant new market for joint living arrangements in the same building which are not condominiums but consist of multiple tenants in common occupying the same building. Tenancies in common are much cheaper and are much less subject to governmental scrutiny therefore they have been increasing in numbers drastically in the last decade or so and are now moving outside of the San Francisco Bay Area.
Tenants in California, particularly in the Bay Area and San Francisco in particular will find the information in this blog post useful as knowing your rights gives you the power to assert those rights.
When a landlord invokes the provisions of the Ellis Act, the apartments can not be re-rented, except at the same rent the evicted tenant was paying, for five years following the evictions. While there are restrictions on ever re-renting the units, there are no such restrictions on converting them to ownership units such as tenancies in common or condos.
In most cases Ellis Act evictions are used to change the planned use of the building. Most Ellis evictions are used to convert rental units to condominiums or tenancies in common. Also, the Ellis Act is used to convert multi-unit buildings into large single family homes, basically McMansions.
There are two simultaneous actions that a landlord must take to (1) legally and properly evict the tenants and (2) legally remove the building from the rental market.
The courts in California have ruled that the tenant’s eviction notice period can not expire before the building is considered withdrawn from the rental market. A building is considered withdrawn 120 days after the landlord files a Notice of Intent to Withdraw Units. During the 120 day period, the withdrawal remains only an intent and the landlord retains the option of changing their mind. In 120 days, the intent becomes a fact and the buildings is considered Ellised or withdrawn with the Ellis restrictions then filed at the County Recorder.
Ellis Procedure is as follows:
1. The landlord issues all tenants eviction notice effective 120 days after the landlord files the Notice of Intent (see item 2 below).
2. Landlord files Notice of Intent To Withdraw Units From The Rental Market with the Rent Board. Note how these work closely together. In other words if the landlord serves the eviction notice and files the Notice of Intent simultaneously the same day for example, then the eviction notice can be 120 days. If the eviction notice is given on July 1 and the Notice of Intent is filed July 10, it must be a 130 day notice. All Tenants facing an Ellis eviction need to carefully determine the exact date when the Notice of Intent is filed since any deficiencies or discrepancies can be objected to in Court. In other words, the eviction notice can not expire before the building is withdrawn. I also want to point out that the adequacy of the Notice of Intent is no longer assessed by the Rent Board but instead is determined by the courts as part of the Unlawful Detainer process if such legal action becomes necessary. In California most courts are very strict in enforcing the provisions of the notice requirements.
3. Within 15 days of filing Notice of Intent, landlord informs tenants in writing that the Notice of Intent was filed and of the tenants’ reoccupancy and relocation rights. The landlord usually does this in the eviction notice itself. The Rent Board at some point in the process will also inform tenants of the filing, relocation rights and reoccupancy rights (as well as a form).
4. Within 120 days of the filing of the Notice of Intent, the landlord records with the County Recorder a Memorandum summarizing the Notice of Intent.
5. 120 days after the Notice of Intent is filed with the Rent Board, the building is considered legally removed from the rental market.
6. Once the building is legally withdrawn from the rental market, in other words once 120 days have passed after filing of the Notice of Intent, the landlord can initiate Unlawful Detainer procedures.
7. The Rent Board records Ellis constraints at County Recorder within 30 days of withdrawal (within 150 days of the landlord filing of the Notice of Intent).
Key Rights of Tenants After Ellis
I want to stress that local laws in many locations in California may require additional protections for tenants facing an Ellis act eviction so tenants are advised to check their local laws.
Eviction of Tenants under Ellis
Ellis Act evictions require a one year notice for seniors over the age of 62 and disabled tenants who have lived in their accommodations for at least one (1) year prior to the date of delivery to the public entity of the notice of intent to withdraw and 120 days for all others. The tenant must give written notice to the building owner within 60 days of his or her entitlement to an extension to the owner within 60 days of the date of delivery to the public entity of the notice of intent to withdraw. See Government Code Section 7060.4(b).
In some cases local rent control laws may provide for relocation benefits for owner or family occupancy evictions so tenants should check their local laws.
Contents of Notice of Intent
The owner must serve tenants with notices of termination of tenancies requiring the tenants to quit the premises on the effective date of withdrawal, which is 120 days after the Notice of Intent is filed with the Rent Board.
Many cities in California, particularly cites with strong rent control laws require additional rights to be offered to existing tenants, such as the first right to purchase the condominium or tenancy in common, etc. And many times the Notice itself must clearly delineate those rights.
The Ellis Act procedure is very complicated so any tenants facing an Ellis eviction should carefully review the statutes that comprise the Ellis Act to make sure that the owner is strictly complying with all requirements, particularly the notice requirements.
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The author of this blog post, Stan Burman, is an entrepreneur and freelance paralegal that has worked in California and Federal litigation since 1995 and has created over 300 sample legal documents for California and Federal litigation.
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Please note that the author of this blog post, Stan Burman is NOT an attorney and as such is unable to provide any specific legal advice. The author is NOT engaged in providing any legal, financial, or other professional services, and any information contained in this blog post is NOT intended to constitute legal advice.
The materials and information contained in this blog post have been prepared by Stan Burman for informational purposes only and are not legal advice. Transmission of the information contained in this blog post is not intended to create, and receipt does not constitute, any business relationship between the author and any readers. Readers should not act upon this information without seeking professional counsel.