What the “Ellis” Going on here?

Are you a landlord with an apartment in the rental market? Are you looking to do something with your property other than rent it? Are you a tenant who rents an apartment in California? Have you been evicted? In evicting you, did your landlord invoke the Ellis Act? What is the Ellis Act and when can a landlord invoke it? What are your rights as a tenant?

The “Ellis Act” (California Government Code §7060-7060.7; modified by San Francisco Rent Ordinance Section 37.9A et. seq.) allows apartment landlords to evict legally all of their tenants, when the landlord has the express purpose of removing his or her property from the rental market. It provides landlords, who no longer wish to have their property in the rental market, a reasonable exit. In practice, landlords often utilize Ellis Act eviction to put up their properties for sale “free and clear” of any tenant issues or to convert their properties into condominiums to be resold at higher values. Some landlords however, misuse the Ellis Act, as a means to eliminate problem tenants.

The Ellis Act does not allow landlords to pick and choose tenants to be evicted. Even if a landlord has an “unprofitable” tenant (i.e. the tenant has a lower rental rate versus other tenants), or an “unprofitable” unit (i.e. the unit has a lower rental rate versus other units), the landlord cannot single them out and invoke the Ellis Act only on said tenants and/or units, respectively. If the landlord decides to invoke the Ellis Act, all tenants from all units in the property must be evicted.

When it was first introduced in 1998 many landlords abused the Ellis Act, evicting hundreds and hundreds of “below market” tenants. The result was that many low-income tenants were evicted and left stuck in between a rock and a hard place. Not only could they not afford the high costs of an attorney to fight the Ellis Act eviction, they were faced with the difficult and expensive task of relocation (packing, searching for a new place, moving and then settling into their new residence).

To combat these perceived abuses, the San Francisco Rent Board passed laws to offset some of the burdens of the Ellis Act by requiring relocation payments to certain categories of tenants. For instance, under San Francisco Rent Ordinance Section 37.9A(e)(1), landlords must pay “low-income tenants”, as defined in California Health and Safety Code §50079.5, $4,500 in relocation costs. The “low income” test appears to be defined on a “unit by unit” basis but is somewhat ambiguous, arguably it could be on a “tenant by tenant” basis. Second, under San Francisco Rent Ordinance Section 37.9A(e)(3), landlords must pay $3,000 to tenants who are mentally or physically disabled, as defined in California Government Code §12955.3, or 62 years of age or older. The section 37.9A(e)(3) tests and its associated payments are clearly on a “tenant by tenant” basis.

About Adishian Law Group, P.C.

Adishian Law Group is a California law firm with a statewide practice in the areas of Corporate law, Employment law, Real Estate law and Mediation Services. Adishianlaw.com is one of the oldest continually operating law firm websites on the Internet. The firm serves its clientele via three offices located in the major business hubs of El Segundo, Palo Alto and San Francisco. As of March 2013, Adishian Law Group, P.C. has represented individual and corporate clients located across 20 California counties, 4 States outside of California and 9 foreign countries — in over 340 legal matters.

For more information about this topic or to speak with Chris Adishian:

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