Opinion ID: 2585536
Heading Depth: 2
Heading Rank: 1

Heading: The Ellis Act

Text: The Ellis Act (Act) sets forth the procedure by which a landlord may go out of business by removing rental units from the market. Its intent is to supersede any holding or portion of any holding in Nash v. City of Santa Monica (1984) 37 Cal.3d 97, 207 Cal.Rptr. 285, 688 P.2d 894 (Nash ) to the extent that the holding, or portion of the holding, conflicts with this chapter, so as to permit landlords to go out of business. (Gov.Code, § 7060.7.) Nash involved a section of the Santa Monica City Charter that prohibited landlords from withdrawing rental units from the market absent a removal permit from the Santa Monica Rent Control Board. To obtain a removal permit, a landlord had to show that removal would not and could not displace low- or moderate-income persons, that removal would not adversely affect the city's supply of housing, and that the landlord could not make a fair return on investment by retaining the unit. ( Nash, supra, 37 Cal.3d at pp. 100-101, fn. 3, 207 Cal.Rptr. 285, 688 P.2d 894.) In Nash, we rejected a due process challenge to this procedure (id. at p. 103, 207 Cal.Rptr. 285, 688 P.2d 894), even though (as the dissent observed) it compelled a landlord to remain in business against his will and gave him only the alternative of a forced sale. (Id. at p. 111, 207 Cal.Rptr. 285, 688 P.2d 894 (dis. opn. of Mosk, J.).) In contrast to Nash, the Act provides that no statute, ordinance, regulation, or administrative action shall compel the owner of any residential real property to offer, or to continue to offer, accommodations in the property for rent or lease (Gov.Code, § 7060, subd. (a)), even if the landlord could make a fair return, the property is habitable, and the landlord lacks approval for future use of the land. ( Los Angeles Lincoln Place Investors, Ltd. v. City of Los Angeles, supra, 54 Cal. App.4th at p. 61, 62 Cal.Rptr.2d 600.) The right articulated in the Act, however, is expressly made subject to certain other laws. For example, the Act is not intended to interfere with local authority over land use, including regulation of the conversion to condominiums or nonresidential use (Gov.Code, § 7060.7, subd. (a)), or to preempt local environmental or land use regulations governing the demolition or redevelopment of the property (id., subd. (b)). Nor does the Act permit a landlord to withdraw from rent or lease less than all of the accommodations in a building. (Id., subd. (d).) The Act further states that if the units withdrawn from the market are subsequently offered again for rent, local governments may require landlords to offer the units at the lawful rent in effect at the time the notice of intent to withdraw was filed. (Gov.Code, § 7060.2, subd. (a)(1).) Local governments may also require landlords who intend to re-rent the units within 10 years after their withdrawal from the market to offer the units first to the displaced tenants. (Id., subd. (c).) The Act also specifies the means by which local governments may require landlords to provide notice of their intention to withdraw the units from the rental market. (Gov.Code, § 7060.4.) The accommodations can be withdrawn from rent or lease 120 days after delivery in person or by first class mail of the notice to the appropriate public entity. ( Id., subd. (b).) [1] If (as here) the tenants do not quit the premises by the date the accommodations have been withdrawn from the market, the landlord may institute an action for unlawful detainer. The Act provides that the tenant in such a proceeding may assert by way of defense that the owner has not complied with the applicable provisions of this chapter.... (Gov.Code, § 7060.6.) The Act also states that it does not supersede any provision of ... Title 5 (commencing with Section 1925) of Part 4 of Division 3 of the Civil Code.... (Gov. Code, § 7060.1, subd. (d).) Title 5 includes Civil Code section 1942.5, which (as stated) contains a prohibition against retaliatory evictions. And, while permitting the landlord to go out of business, the Act is not otherwise intended to [o]verride procedural protections designed to prevent abuse of the right to evict tenants. (Gov. Code, § 7060.7, subd. (c).)