Ellis Act Evictions

 

Relocation Benefits for 3/1/11-2/28/12: the amounts are $5,105.20 per tenant, up to a maximum of $15,315.56, plus an additional $3,403.45 for tenants who are senior or disabled.

 

The "Ellis Act" (download copy of law) 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 can not single out one tenant (with low rent) and/or remove just one unit from the rental market. When a landlord invokes 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 (e.g., tenancies in common or condos).

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 See Fighting TIC Conversions. Also, Ellis is used to convert multi-unit buildings into single family homes—mansions. For fighting these, see Mergers.

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 buildings 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!

FIGHT THE ELLIS: Defenses may be limited but 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.

Fighting Ellis Act Evictions
An Ellis Act eviction is for the purpose of removing all of the rental units in the building from the rental market. The right to evict to remove units from the rental act stems from state law (the Ellis Act). The Ellis Act is included in the just-causes as 38.9(a)(13).

A landlord can not do a partial Ellis eviction—all of the tenants in the entire building must be evicted simultaneously, e.g., not just one tenant.
Pursuant to new state legislation, effective January 1, 2000, senior (age 62) and disabled tenants (the definition of disability is broad and recent amendments to state disability laws have made it even broader starting in 2006, 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 at least 120 days notice.

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 it's 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 allowable 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.


These 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, these units are covered by rent control (despite the post-79 exemption).

Process
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 can not expire before the building is considered "withdrawn" from the rental market.
A building is "withdrawn" 120 days 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 2 below).
2. Landlord files Notice of Intent To Withdraw Units From The Rental Market with the Rent Board.
Note how these 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 a 130 day notice. Tenants should be advised to determine when the Notice of Intent is filed since discrepancies can be demurrable. In other words, the eviction notice can not expire before the building is withdrawn. Also note that the adequacy of the Notice of Intent will no longer be assessed by the Rent Board but will instead be determined by the courts as part of the UD process.
3. Within 15 days of filing Notice of Intent, landlord informs tenants 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 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. 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).

Defenses
•Procedural defenses are the most effective. Courts have ruled that since Ellis is so strict then the landlord must exactly adhere (both content and dates) to all of the required Rent Board filings (see Process, above). 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 receipt) can not expire before the building is withdrawn from the rental market (120 days after filing the petition to withdraw). 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.
•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 can't do until they receive government permission or permits, tenants can argue that the landlord may, in fact, not be able to remove the building from the rental market.
Note: A January, 2001, ruling by the state Department 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 DRE 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 state Dept. of Real Estate (http://www.dre.cahwnet.gov/subs_sub.htm)

•An Ellis eviction in general, though, is not allowed:
–To withdraw some but not all of the units
–During the term of a fixed period lease
•Retaliation and discrimination (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 an August, 2003, California Supreme Court decision (Drouet Case)
.
•Bad Faith–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.

Wrongful Eviction Remedies
Many buildings Ellised will come back as re-rentals—at higher rents. Landlords have been trying to keep this option available to them by getting tenants to sign waivers of their right to return at the same rent or to sue if the units are re-rented. Tenants who have signed such waivers have questionable rights to sue for wrongful eviction or for the right to return; some attorneys think they maintain the right and some don't.

Relocation Benefits
The landlord must pay a relocation benefit of (these amounts are for 3/1/09-2/28/10): $4,945.46 per tenant, up to a maximum of $14.836.35 per unit, plus an additional $3,296.96 for tenants who are senior or disabled. Relocation benefits increase each year based on inflation. Click here for link to Rent Board information on latest amounts.

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 also notify the landlord and landlord's attorney.
The Rent Board will also provide tenants with a form to fill out and the Rent Board will maintain a registry of tenants who wish to return, their current addresses, etc.

Re-Rental of Ellised Apartments
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. See Ellis Sites for addresses.

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