Evicting a tenant is a tough and challenging process. This is especially true for owners of rent-controlled units, where local ordinances provide those tenants an extra level of protection against evictions and rent hikes.
California adopted the Ellis Act to allow landlords to evict tenants for the purpose of going out of business as a landlord to sell their property to another party. In other words, the current landlord sells the property so that he will not be a landlord in the future. Under the Ellis Act, the landlord has another option to convert the building from a rental property to owner-utilized housing, as opposed to selling the property completely.
The Ellis Act provides that the landlord will not use the building as a rental business for five years. Thus, after evicting the tenants, the landlord cannot rent the property for five years. If the landlord violates the Act, they must allow the former tenants to rent the property back at the same rate, adjusted for inflation. This discounted rate is upheld even if the former tenants do not reoccupy the unit.
However, if the landlord waits the five years to rent the property, they may charge the fair market value for the property at that time.
There are many permissible changes of use of property available to a landlord under the Ellis Act. Examples of these changes include:
- A landlord owns an apartment complex consisting of three buildings, each having four units. Zoning permits the landlord to have professional offices on the property. Under the Act, the landlord may then remove the front building from residential use, remodel it, and rent it out for professional offices.
- A landlord owns two duplexes on a single parcel of land. They live in one of the duplexes and wish to remove the adjoining attached unit from the rental market. Since the duplexes contain three or fewer units, the landlord must remove both duplexes from the rental market to be protected under the Act. Therefore, in addition to the tenants leaving the property, the landlord also must leave the property.
There are various types of notice requirements that must be carried out by a landlord in order for the eviction to qualify as a proper eviction under the act. Depending on the circumstances, the following notice requirements must be satisfied:
- Notice for Termination with Cause: There are three types of termination notices required by landlords when eviction is requested for a reason.
- Pay Rent or Quit Notices: When a tenant has not paid their rent, the tenant may be provided with a three- or five-day notice to pay or move out.
- Cure or Quit Notices: If a tenant violates a term or condition of their lease agreement, such as a failure to adhere to a no-pet clause or violating a noise restriction, the tenant will be given this notice. The notice provides a time frame the tenant has to “cure” or fix the violation. If they fail to remedy the violation, the tenant must either move or face an eviction lawsuit if they refuse to leave the premises.
- Unconditional Quit Notice: These notices require the tenant to leave the premises with no chance to pay rent or correct a lease violation. These types of notices are typically only permitted in certain situations where a tenant has violated a significant clause in the lease agreement, been late with rent on multiple occurrences, damaged the premises, or engaged in illegal activity on the rental property.
- Notice for Termination Without Cause: Notice for termination without cause usually come in the form of a 30-Day or 60-Day Notice to Vacate: These notices usually end a month-to-month lease. These are usually not permitted when there is a term lease for a period of time, such as one or two years. However, after a lease term has ended and a tenant stays on the property, the lease changes into a month-to-month lease.
No. The Ellis Act maybe modified by the municipalities of California. Thus, each city may have a slightly different one. For example, in San Francisco, the landlord must pay each tenant at least $5,153 for their relocation expenses. In Santa Monica, the landlord must obtain a re-occupation permit before using the renovated building, even if it means that they are the person moving in. Lastly, in Los Angeles, the city will force this new building apply its old rent control rules.
If you are a property owner and are interested in learning how to evict your tenants under the Ellis Act, then you should consult a California real estate lawyer. A consultation with an attorney will aid in creating a proper eviction notice for tenants and represent your needs.