The Ellis Act (California Government Code Chapter 12.75) [1] is a 1985 California state law that allows landlords to evict residential tenants to "go out of the rental business" in spite of desires by local governments to compel them to continue providing rental housing.
The legislature passed the Ellis Act in response to the California Supreme Court's decision in Nash v. City of Santa Monica [2] (1984) 37 Cal. 3d 97 that held that municipalities could prevent landlords from evicting their tenants to "go out of business" in order to withdraw their property from the rental market. [3] : 1
The Ellis Act prohibits local entities, such as cities, from having rent control ordinances that prevent owners of housing from evicting tenants if the landlord is required to continue providing housing. The Act does not limit ordinances that control landlords who continue renting. For example, an ordinance may prevent a landlord from evicting a tenant and then renting to another tenant.
To take advantage of the Ellis Act, a landlord must terminate all residential tenancies and withdraw all "accommodations," which roughly means all "residential rental units." The landlord cannot, for instance, terminate the tenancies of rental units with lower, rent-controlled, rents and maintain market rate tenancies at the same time.
Local entities are permitted to place various restrictions on the landlord's ability to go out of business. For instance, cities may require landlords to file a "notice of intent to withdraw," provide the city with information about the tenancy (such as names of tenants, dates of commencement, and rental rates). Cities may require the payment of relocation assistance "to mitigate any adverse impact on persons displaced" or an extension of the termination date of tenancies from the standard 120 days to a full year from the commencement of the withdrawal process if tenants claim to be at least 62 or disabled.[ citation needed ]
The city may also impose restrictions against the future rental use of the property. It may require that if the landlord offers the withdrawn units for lease within ten years of withdrawal, the unit must be offered to the displaced tenant(s), and that if the unit is offered within the first five years, it must be offered to the displaced tenant(s) at the former rental rate.[ citation needed ]
The law requires that landlords act in "in good faith to take the unit permanently off the rental market" when withdrawing a property from the rental market. A family in Los Angeles successfully sued the landlord and, in a jury trial, won the right to remain in the rental, because they demonstrated that the landlord was not acting in good faith. [4]
The Ellis Act is named after Republican State Senator (1981-1988) James "Jim" L. Ellis, a former representative of San Diego.
The California legislature passed the Ellis Act in response to the California Supreme Court's ruling in Nash v. City of Santa Monica [2] that municipalities could prevent landlords from evicting their tenants to "go out of business" in order to withdraw their property from the rental market. [3] : 1
Implementing statutes vary by city and so there are different requirements in each jurisdiction:
San Francisco requires compensation, [5] which increases along with CPI. [6] As of 2019, it was $6,985.23 per tenant, with an additional $4656.81 per disabled or elderly tenant, capped at $20,955.68 per unit. [7]
In 2014 and 2015, San Francisco Supervisor David Campos authored two pieces of legislation to attempt to increase the relocation payments to provide for two years of market rate subsidy to displaced tenants. [8] The first attempt in 2014 with unlimited total payment amount and no requirement that the money be spent on relocation was declared an unconstitutional violation of property rights by a federal court. [9] : 1 [10] : 1 [11] [12] In 2015, the second piece of legislation was a scaled back version of the 2014 legislation which this time limited the relocation to a maximum of $50,000 per tenant and required that the monies be spent on relocation. [13] : 1 That law was struck down by a state court because it "placed a prohibitive price on a landlord's right to exit the rental market." [13] : 1 [14] : 1
An amendment to the Ellis Act for San Francisco County was proposed in 2014 in the California State Legislature, SB1439. [15] If enacted, SB 1439 would have required property owners who have filed an Ellis eviction to wait five years before doing so with another building. [16] The measure did not pass. [17]
Santa Monica requires an owner get a reoccupation permit before the building can be used for any purpose after Ellis Act evictions. [18]
Los Angeles applies rent control provisions to units built on the same property up to five years later. [19] : 1
If withdrawn residential units can no longer be rented, property owners invoking the Ellis Act often sell apartments as individual tenancy-in-common ("TIC") units. Some cities, such as San Francisco, impose strict restrictions on withdrawn property (such as preventing condominium conversion or the adding of Accessory Dwelling Units [20] : 1 ). However, a 2016 decision by the First District Court of Appeals upheld a challenge against San Francisco's ordinance preventing Ellis Act "mergers" of units and found that state law occupies the field of substantive eviction controls "for owners attempting to withdraw units from the residential rental market" and suggested that the Ellis Act may impose a limit on post-withdrawal "penalties" that seek to discourage the use of that right under state law.
Tenant groups in San Francisco and Los Angeles claim that California landlords commonly misuse the Ellis Act "to bypass rent control" [21] [22] and to cash in during peak housing market periods [23] by managing rent-stabilized properties to vacancy, when they might demolish buildings to build pricey condominiums, retenant newly-vacated units at top-market rents, or resell buildings at much higher prices than they bought, once they are no longer value-encumbered by the presence of long-term, rent-stabilized tenants.
In 2014, State Senator Mark Leno introduced bill SB 1439, legislation that would prevent landlords from being able to use the Ellis Act for five years after buying a property. Salesforce, Twilio, as well as tech companies like Accela, AfterCollege, Peerspace, Squaretrade and Xoom came out in support of SB 1439. [24]
In the United States, rent control refers to laws or ordinances that set price controls on the rent of residential housing to function as a price ceiling. More loosely, "rent control" describes several types of price control:
A landlord is the owner of a house, apartment, condominium, land, or real estate which is rented or leased to an individual or business, who is called a tenant. When a juristic person is in this position, the term landlord is used. Other terms include lessor, housing provider, and owner. The term landlady may be used for the female owners. The manager of a pub in the United Kingdom, strictly speaking a licensed victualler, is referred to as the landlord/landlady. In political economy it refers to the owner of natural resources alone from which an economic rent, a form of passive income, is the income received.
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A leasehold estate is an ownership of a temporary right to hold land or property in which a lessee or a tenant has rights of real property by some form of title from a lessor or landlord. Although a tenant does hold rights to real property, a leasehold estate is typically considered personal property.
Property management is the operation, control, maintenance, and oversight of real estate and physical property. This can include residential, commercial, and land real estate. Management indicates the need for real estate to be cared for and monitored, with accountability for and attention to its useful life and condition. This is much akin to the role of management in any business.
Landlord harassment is the willing creation, by a landlord or their agents, of conditions that are uncomfortable for one or more tenants in order to induce willing abandonment of a rental contract. This is illegal in many jurisdictions, either under general harassment laws or specific protections, as well as under the terms of rental contracts or tenancy agreements.
CitiApartments was one of the largest real estate companies in San Francisco, California, which at its peak owned and managed more than 300 buildings directly and through a number of affiliates. In recent years the companies suffered a financial downturn, and have been the subject of intense criticism and litigation for allegedly illegal business practices as a residential landlord.
A security deposit is a sum of money held in trust.
Rent regulation in New York is a means of limiting the amount of rent charged on dwellings. Rent control and rent stabilization are two programs used in parts of New York state. In addition to controlling rent, the system also prescribes rights and obligations for tenants and landlords.
Landlord–tenant law is the field of law that deals with the rights and duties of landlords and tenants.
A section 21 notice in England and Wales also known as a section 21 notice of possession or a section 21 eviction, is the notice under the Housing Act 1988 section 21, which a landlord must give to their tenant to begin the process to take possession of a property let on an assured shorthold tenancy without providing a reason for wishing to take possession. The expiry of a section 21 notice does not bring a tenancy to its end. The tenancy would only be ended by a landlord obtaining an order for possession from a court, and then having that order executed by a County Court bailiff or High Court enforcement officer. Such an order for possession may not be made to take effect earlier than six months from the beginning of the first tenancy unless the tenancy is a demoted assured shorthold tenancy. If the court is satisfied that a landlord is entitled to possession, it must make an order for possession, for a date no later than 14 days after the making of the order unless exceptional hardship would be caused to the tenant in which case possession may be postponed to a date no later than six weeks after the making of the order. The court has no power to grant any adjournment or stay of execution from enforcement unless the tenant has a disability discrimination, public law or human rights defence, or the case is pending an appeal.
Rent regulation is a system of laws, administered by a court or a public authority, which aims to ensure the affordability of housing and tenancies on the rental market for dwellings. Generally, a system of rent regulation involves:
Rent regulation in England and Wales is the part of English land law that creates rights and obligations for tenants and landlords. The main areas of regulation concern,
The Costa–Hawkins Rental Housing Act ("Costa–Hawkins") is a California state law, enacted in 1995, which places limits on municipal rent control ordinances. Costa–Hawkins preempts the field in two major ways. First, it prohibits cities from establishing rent control over certain kinds of residential units, e.g., single-family dwellings and condominiums, and newly constructed apartment units; these are deemed exempt. Second, it prohibits "vacancy control", also called "strict" rent control. The legislation was sponsored by Democratic Senator Jim Costa and Republican Assemblymember Phil Hawkins.
The Housing Act 1988 is an Act of Parliament in the United Kingdom. It governs the law between landlords and tenants. The Act introduced the concepts of assured tenancy and assured shorthold tenancy. It also facilitated the transfer of council housing to not-for-profit housing associations, which was then carried out partly through the system of Large Scale Voluntary Transfer.
Eviction in the United States refers to the pattern of tenant removal by landlords in the United States. In an eviction process, landlords forcibly remove tenants from their place of residence and reclaim the property. Landlords may decide to evict tenants who have failed to pay rent, violated lease terms, or possess an expired lease. Landlords may also choose not to renew a tenant's lease, however, this does not constitute an eviction. In the United States, eviction procedures, landlord rights, and tenant protections vary by state and locality. Historically, the United States has seen changes in domestic eviction rates during periods of major socio-political and economic turmoil—including the Great Depression, the 2008 Recession, and the COVID-19 pandemic. High eviction rates are driven by affordable housing shortages and rising housing costs. Across the United States, low-income and disadvantaged neighborhoods have disproportionately higher eviction rates. Certain demographics—including low income renters, Black and Hispanic renters, women, and people with children—are also at a greater risk of eviction. Additionally, eviction filings remain on renters' public records. This can make it more difficult for renters to access future housing, since most landlords will not rent to a tenant with a history of eviction. Eviction and housing instability are also linked to many negative health and life outcomes, including homelessness, poverty, and poor mental and physical health.
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§37.9A(a)(3): "… relocation payments shall be paid to the tenants as follows:"
§37.9A(a)(3)(D): "… shall increase annually at the rate of … Consumer Price Index…"