Ellis Act Evictions

 

Relocation Payments: Tenants evicted for the Ellis Act have a right to the larger of the relocation payment of (from 3/1/14-2/28/15) $5,265.10 up to a maximum of $15,795.27 per household and $3,510.06 additional for tenants who are senior or disabled. Previously, the tenant was paid for the larger of the relocation payment or a Rental Payment Differential. However, the law requiring a Rental Payment Differential has been overruled in federal court. (Levin v. City and County of San Francisco)

 

The "Ellis Act" is a state law which says that landlords have the unconditional right to evict tenants to "go out of business." For an Ellis eviction, the landlord must remove all of the units in the building from the rental market, i.e., the landlord must evict all the tenants and cannot single out one tenant (for example, with low rent) and/or remove just one unit out of several from the rental market. The Ellis Act is included in the just causes for eviction under the Rent Ordinance as Section 38.9(a)13).

Ellis Act evictions generally are used to change the use of the building. Most Ellis evictions are used to convert rental units to condominiums, using loopholes in the condo law. If your Ellis stems from a condo conversion see the "Condo & TIC Conversions" section. Also, Ellis evictions are used to convert multi-unit buildings into single family homes that are mansions. For fighting these, see "Mergers & Demolitions."

Beware of Ellis Threats

Filing an Ellis Act with the Rent Board means that the re-rental restrictions will be recorded on the deed of the property (this is regardless of whether or not the landlord completes the Ellis withdrawal. Thus landlords are motivated to issue Ellis "warnings" and "advisories" to the tenants–these are not legal eviction notices but nonetheless are perceived as eviction notices by tenants. They usually warn that an Ellis will be coming in a month or two. (Especially when they want to simply sell a building since realtors report that vacant buildings are worth 20% more). The Daly eviction threats law has made this more difficult to do, as have changes in state law and Rent Board procedures but some landlords still try it—don't move based on a bluff!


Fighting Ellis Evictions

Tenants who fight the Ellis eviction win surprisingly often. Tenants who don't win often drag out the eviction for well over a year and get into a position where they can settle on their terms. The first rule of an Ellis is not to panic but to become resolved to fight for your home.

Organize as a Group
If one tenant can successfully claim any of the following defenses, then the eviction is stopped for the entire building since the landlord is then prevented from withdrawing all of the units. (However, one tenant claiming disability or senior status that requires notice of one year would not prevent eviction of the other tenants after 120 days.) If the landlord buys out enough units so that there are only two units that are tenant occupied, the landlord may be able to market the building as a landlord move-in for one unit and a close relative move-in for the other unit with fewer restrictions, decreasing the tenants’ fighting power.

It can also be useful to put public pressure on a landlord who is doing an Ellis Act eviction. Since the landlord isn’t even claiming to be doing anything socially redeeming after the evictions are completed, neighbors and the media can often be made to see the tenant’s side clearly.

Procedural Defenses
A landlord cannot do a partial Ellis eviction—all of the tenants in the entire building are given eviction notices simultaneously, e.g., not just one tenant.

Senior (age 62) and disabled tenants (generally, disability being defined as" having a condition that limits a major life activity," click here for link to definition) must receive a one year notice of eviction. All other tenants must receive 120 days notice.

Courts have ruled that since the Ellis Act procedures are so strict, the landlord must exactly adhere (both content and dates) to all of the required Rent Board filings. Tenants should go to the Rent Board and review the landlord's filings and the dates they were received. For example, the eviction notice (120 days after service to the tenant) cannot expire before the building is withdrawn from the rental market (120 days after filing the petition to withdraw if there are no senior or disabled tenants). Given that Ellis notices are 120 days and that most Ellis evictions are done by real estate speculators seeking to cash in on a hot market, forcing landlords to reissue 120 day notices can force the speculator to rethink whether they even want to do the Ellis.

A ruling by the California Bureau of Real Estate said that TIC conversions in 5+ unit buildings must go through the state subdivision process. Tenants have defeated Ellis evictions in 5+ unit buildings because the landlord was offering the units but had not received California Bureau of Real Estate subdivision approval. If you live in a building being Ellised which has five or more units, make sure the landlord know about this ruling. If the landlord is actively selling the units as TIC units, you can also file a complaint with the California Bureau of Real Estate.

The landlord may not Ellis during the term of a fixed period lease.

Intent of the Landlord
What the landlord intends to do with the building following the withdrawal from the rental market can be (but is not always) a defense. If, for example, the landlord says she will be moving into the building, it will make no difference to argue that the landlord really intends to sell the building. However, if the landlord says they plan to do something with the building which they cannot do until they receive government permission or permits, tenants can successfully argue that the landlord may, in fact, not be able to remove the building from the rental market.

Retaliation and discrimination (usually defenses to any eviction under state law) can only be raised as a defense if the tenant challenges the landlord's "good faith" intention to take the units off the rental market AND can prove there is bad faith. This is pursuant to a California Supreme Court decision (Drouet Case). The Drouet Case was also notable in that the Supreme Court established a "good faith" standard for Ellis evictions. Previously, tenants could not claim that the landlord was acting in bad faith (essentially this means that the landlord does not really intend to stop renting the units). This will be somewhat more difficult to prove in an Ellis since tenants will have to prove that the landlord is going to re-rent.

Re-Rental Restrictions
If a building is "Ellised" (i.e., removed from the rental market), there are vacancy rent control restrictions on re-rental of the units. The landlord is not "forbidden" from re-renting (as is often characterized). Rather, if the units are re-rented:

Re-Rental Must Be At Same Rent Evicted Tenants Paid: For a period of five years, if the units are re-rented to anyone, the maximum rent which can be charged is the same rent the evicted tenant in that unit was paying, plus any increases which would be otherwise allowed under rent control.
Evicted Tenants Get First Right To Return. The tenant who was evicted has the first right of return at their same rent (plus any increases which would have been allowed under rent control) for a period of five years; evicted tenants get a first right to return for the first ten years, but only at the same rent they were paying for the first five years. Tenants must notify the landlord and the Rent Board if they want to avail themselves of this option.

The re-rental restrictions above are binding on current and future owners. Also, if the building is demolished and units in a newly constructed building are offered for rent within five years of the date of withdrawal, restrictions will apply.


Process of an Ellis Eviction

Ellis evictions require a one year notice for senior and disabled tenants, 120 days for all others.

It might be helpful to understand the concept of "Ellising" a building. There's two generally simultaneous actions a landlord must take: (1) evict the tenants and (2) legally remove the building from the rental market.

Courts have ruled that the tenant's eviction notice cannot expire before the building is "withdrawn" from the rental market. A building is "withdrawn" 120 days (or one year if there is a senior or disabled tenant) after the landlord files a "Notice of Intent To Withdraw Units." During the 120 day period, the withdrawal remains an "intent" and the landlord retains the option of changing his/her mind. In 120 days, the intent becomes a fact and the buildings is "Ellised" or "withdrawn" with the Ellis restrictions then filed at the County Recorder.

The process is as follows:

  1. Landlord issues tenants eviction notice effective 120 days after the landlord files the Notice of Intent (see number 2), and half of the relocation payment. The other half is paid when the tenant vacates the unit.
  2. Landlord files Notice of Intent to Withdraw Units from the Rental Market with the Rent Board. The two notices work hand in hand: if the landlord serves the eviction notice and files the Notice of Intent simultaneously (e.g., the same day), 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 at least a 130 day notice. Tenants are advised to determine when the Notice of Intent is filed since discrepancies can make the eviction invalid. The eviction notice cannot expire before the building is withdrawn.
  3. Within 15 days of filing the Notice of Intent, landlord informs tenants that the Notice of Intent was filed and of the tenants' reoccupancy and relocation rights. The Rent Board at some point in the process will also inform tenants of the filing, relocation and reoccupancy rights.
  4. Within 120 days (or 1 year if there is a senior or disabled tenant) 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 (or 1 year if there is a senior or disabled tenant) 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 (i.e., 120 days 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).

Relocation Payments
Tenants evicted for the Ellis Act have a right to a relocation payment.


Right To Re-Rent At Same Rent
Within 30 days of vacating, tenants are required to notify the landlord of their current address and their wish to re-occupy the unit at the same rent, if it is rented again. Tenants should notify the landlord and the landlord's attorney.
The Rent Board will also provide tenants with a form to fill out and maintain a registry of tenants who wish to return including their current addresses, etc.


Re-Rental of Ellised Rental Units

Tenants who have rented an apartment which the landlord has previously withdrawn from the rental market under the Ellis Act may be paying too much rent, because of the re-rental restrictions imposed by Ellis. If you think you may be living in such a unit, come in to the Tenants Union drop in clinic and talk to a counselor.

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