The Ellis Act gives landlords the power to evict tenants when they want to take properties off the market. Learn about California rental property laws here.
Are you hoping to demolish your rental properties or take them off the market? If so, a California law called the Ellis Act can give you the ability to evict tenants as part of this process.
Still, evicting tenants under this law may be more complex than you’d expect. But if you take some time to read up on the Ellis Act and other California rental property laws, you shouldn’t have too much trouble getting your properties back.
What Is the Ellis Act?
The Ellis Act is defined in California Government Code Chapter 12.75. This law, which has been in place since 1985, lets landlords evict residential tenants and recover their properties in certain circumstances.
Under this act, landlords can take these actions when they plan to “go out of business” by:
- Demolishing a property
- Permanently removing a property from use as rental housing
Know How to Remove Rental Units From the Market
Based on guidance from the Los Angeles Housing Department (LAHD), property owners in LA can take housing units off the market by following these steps:
Step One: Record a Memorandum Summarizing Non-Confidential Provisions of a Notice of Intent to Withdraw Units from Rental Housing Use
The first step is to fill out a simple form which lists the owner’s name, the property address, and states the owner’s intent to withdraw the property from rental housing use. That can be filed at the Norwalk County Recorders Office and this will officially begin the Ellis Act process.
Step Two: CITY OF LOS ANGELES ONLY – Schedule an Appointment
Next, if your property is located within the City of Los Angeles, you will need to make an appointment with an LAHD Analyst. You can set up your appointment through the LAHD Online Appointment System by picking a date/time and choosing “Ellis” as your service.
Step Three: Prepare Your Documents
Before your appointment, you must also have several documents (and corresponding administrative fees) ready. Even in cities other than Los Angeles, you’ll want to compile most of the documents listed below before you serve your 120-day notice to the tenant. These documents include:
- Copy of Grant Deed
- Copy of Notice to Tenant of Pending Withdrawal for each occupied unit – (note, you cannot withdraw anything less than every unit at the property)
- Copy of the Memorandum you filed in step one
- Copy of Articles of Organization/Partnership Agreement/Articles of Incorporation (if units aren’t owned by a natural person)
- Copy of Notice terminating tenancy (to serve to affected tenants)
- Notice of Intent to Withdraw Units from Rental Housing Use
- Copy of LADBS Clearance Summary Worksheet (i.e., a demolition permit for conversion/demolition applications), including proof tenants were given relocation assistance in keeping with the Rent Stabilization Ordinance (RSO)/Resident Protections Ordinance (RPO)
- Copy of approval letter from the LAHD Housing Development Bureau (if you plan to demolish units for new construction and selected relocation option 2 or 3 as defined in B. Relocation Assistance Bulletin: Eviction for Demolition for New Construction Under the Resident Protections Ordinance)
The documents you submit to the LAHD will not be returned after your meeting. With that in mind, plan on making copies of these documents for your records.
Step Four: Inform Your Tenants
After meeting with an LAHD Analyst, you’ll need to let tenants know you’re planning to take your properties off the market. Under California state law, you must serve them with a 120-day termination Notice at this point (or a six-month Notice if you plan to demolish your property for new construction, in keeping with the Housing Crisis Act as amended through Assembly Bill 1218).
To comply with the Ellis Act and RSO, you’ll also have to give each affected household a complete Notice to Tenant of Pending Withdrawal and a Notice of Interest in Renewing Tenancy. You’ll want to do this on the same day as your appointment with LAHD, if the property is located within the City of Los Angeles.
In addition to submitting these Notices, you’ll have to:
- Pay relocation assistance. This needs to be paid within 15 days after serving the eviction Notice. You can make these payments to tenants directly or via an escrow account.
- Deal with extended tenancy claims. If any of your tenants makes a claim for entitlement to extended tenancy, you’ll have to let LAHD know by filling out a Notice to City of Claims for Extended Tenancy.
- Let tenants know if you extend your withdrawal date. If you choose to extend the withdrawal date by up to a year for households that wouldn’t be entitled to this extension otherwise, be sure to share a Notice to City of Extended Dates of Withdrawal with the LAHD.
What Do You Need to Do After Withdrawing Property?
Once you file a Notice of Intent to Withdraw, you might still have to provide these documents:
- Notice of Interest in Renewing Tenancy. Did your tenant fill out the blank Notice you gave them earlier? If so, you must give a copy of the completed form to LAHD.
- Notice of Intention to Re-Rent Withdrawn Accommodations. If you want to re-rent units you had previously withdrawn, you’ll need to submit this form.
- Annual Property Status Report. You need to complete this form once a year for seven years after submitting your Notice of Intent to Withdraw (or until the LAHD says your reporting requirements have been met).
Understanding Registration Fee Requirements
After you’ve filed all the forms you need to file, you’ll still have to keep SCEP/RSO registration fee requirements in mind. Here’s what you should know about paying fees for:
Occupied Units
If a unit is occupied, you’ll need to continue paying registration fees on it for the full billing year – even if it is only occupied for a single day of that year. That requirement applies whether or not you filed a Notice of Intent to Withdraw earlier. Occupied units are not eligible for exemptions, either.
Vacant Units
When your property is vacant and has been taken off the market, you should fill out a Conditional Exemption Application and claim exemption #“P4A” from your registration fees. Then, the LAHD will check to ensure the withdrawal process is complete. (Note that you only need to fill this form out once for a long-term registration fee exemption.)
You’ll continue to get an annual registration bill until your Conditional Exemption Application has been approved. If your units are vacant, you can deal with this by filing a Temporary Exemption Application for “no rent collected.” This form is enclosed with registration bills, and completing it until you stop getting these bills will help you avoid penalties.
Get Help With the Ellis Act and More
California rental property laws can get tricky, especially when you’re trying to take properties off the market. Of course, tackling this job with zero assistance will just make things harder for you.
Working with the experts at California Property Law Group is the simplest way to steer clear of this headache. Better yet, our services don’t begin and end with legal guidance – we can represent you in court whenever you’re dealing with landlord tenant matters. Set up a free consultation to get started!
