The Ellis Act is found in California Government Code Section 7060, et seq. It was enacted by the California legislature in 1986 to require municipalities to allow property owners to go out of the residential rental housing business.
Pursuant to the Ellis Act, San Francisco has enacted a procedure in the Rent Ordinance that owners must follow if they are going to evict tenants so that they can go out of the rental housing business. The following procedures are required:
Step 1: The owner must serve the tenants with notices of termination of tenancy requiring the tenants to quit the premises on the effective date of withdrawal, which is 120 days after the Notice of Intent To Withdraw Residential Units from the Rental Market is filed with the Rent Board as required in Step 2. The notice of termination must inform tenants of the right to relocation assistance, one-half of which must be paid at the time of service of the notice of termination.
Step 2: The owner must file a Notice of Intent To Withdraw Residential Units from the Rental Market (“Notice of Intent”) with the Rent Board.
Step 3: Within fifteen days of filing the Notice of Intent, the owner must inform the tenants that the Notice of Intent was filed with the Rent Board, that the tenants have certain re-occupancy rights, that the tenants have the right to relocation assistance, and that elderly or disabled tenants who have lived in the unit for at least one year have the right to extend the date of withdrawal from 120 days to one year.
Step 4: Within sixty days of filing the Notice of Intent, elderly or disabled tenants must give written notice to the owner of their entitlement to an extension of the date of withdrawal from 120 days to one year.
Step 5: Within thirty days of receipt of a tenant’s claim to an extension of the date of withdrawal, the owner must give written notice of the claim to the Rent Board.
Step 6: Within ninety days of filing the Notice of Intent, the owner must give written notice to the Rent Board and the tenants as to whether or not the owner disputes a tenant’s claim to an extension and the revised date of withdrawal of the property if the owner does not dispute a tenant’s claim of extension. The notice must also state whether the owner is extending the tenancies for other units in the building.
Step 7: Prior to the effective date of withdrawal, the owner shall record a Memorandum summarizing the Notice of Intent with the County Recorder. A tenant may assert the owner’s failure to record the Memorandum as a defense to an eviction action. The Rent Board will record a Notice of Constraints notwithstanding the owner’s failure to record the Memorandum.
Step 8: Withdrawal of the property is effective 120 days after the filing of the Notice of Intent, or one year if the date of withdrawal of the property has been extended by the owner. The second half of the required relocation assistance shall be paid when the tenant vacates the unit.
Step 9: Within thirty days after the effective date of withdrawal, the Rent Board will record a Notice of Constraints with the County Recorder.
Pursuant to the Ellis Act, the Notice of Constraints imposes a 5-year period of vacancy control from the effective date of withdrawal. If the Ellis filing is rescinded, the 5-year period of vacancy control runs from the date of filing of the Notice of Intent with the Rent Board. Upon written request to the owner, the displaced tenant has the right of first refusal if the unit is put back on the rental market within 10 years of the effective date of withdrawal – the owner can charge only the rent-controlled rent within the first five years, but can charge market rent during the next five years. In addition, on July 18, 2022, the Rent Ordinance was amended to state that if any unit is returned to the rental market during the 10-year period of constraints, the entire property must be returned to the market, with exceptions for certain owner-occupied units.
The Rent Board maintains a list of rental units withdrawn from rent or lease and the names of the displaced tenants. If the tenants want to be notified if the withdrawn units are offered again for rent within ten years of withdrawal, tenants must request notice and provide current addresses to the owner and the Rent Board. Tenants may complete a Notice of Interest in Renewed Accommodations form and return it to the owner and the Rent Board. The Notice of Interest in Renewed Accommodations form can be found in the Ellis Tenant Packet in the Forms Center on our website.
In addition, certain tenants that received a notice on or after January 1, 2012 that the owner plans to withdraw the tenant’s rental unit from the rental market under the Ellis Act may be entitled to preference in occupying units or receiving assistance under housing programs administered by the City. For more information about such assistance, you may contact the Mayor’s Office of Housing. The Mayor’s Office of Housing and other resources are available through the Referral Listing on our website.
Owners are required to pay relocation expenses to tenants who are being evicted under the Ellis Act. Pursuant to Ordinance Section 37.9A, each authorized occupant, regardless of age, is entitled to a relocation payment of $10,000.00 (as of September 1, 2022), with a maximum payment of $30,000.00 per unit. In addition, each elderly tenant who is 62 years or older, and each disabled tenant, is entitled to an additional payment of $6,700.00. Each year on March 1st, the amount of these relocation payments, including the maximum relocation expenses per unit, is adjusted for inflation.
Information regarding current relocation payment amounts are available in the Forms Center of our website. A list of relocation payment amounts is also available at our office.
Violation of the provisions governing the withdrawal of units under the Ellis Act may subject the owner to liability for actual and punitive damages. Please refer to Ordinance Sections 37.9(a)(13) and 37.9A for more information.
Tags: Topic 205