Ellis Act California Requirements: Withdrawing Rental Units From the Market

TL;DR — Key Takeaways

• The Ellis Act California requirements begin with a limit on government, not an eviction remedy. Government Code section 7060(a) forbids a public entity from compelling an owner of residential real property to offer, or continue to offer, accommodations for rent. Section 7060.7 states the purpose: to supersede Nash v. City of Santa Monica “so as to permit landlords to go out of business.”
• It cannot be used to clear one apartment. Section 7060.7(d)(1) provides that the chapter does not permit withdrawing less than all of the accommodations, which section 7060(b)(1) defines by structure – every unit in a detached structure of four or more, or, where a structure has three or fewer, those units plus any on the same parcel.
• The eviction still runs on the ordinary statutes. Section 7060.1(d) provides that the chapter does not supersede the Civil Code hiring chapter, the unlawful detainer chapter, the Fair Employment and Housing Act, or the Unfair Competition Law.
• Where a city has rent controls and has legislated for it, the withdrawal date is 120 days after the notice of intent reaches the entity, extendable to one year for a tenant at least 62 or disabled with a year’s residence.
• The restrictions outlast the eviction by years: rent restricted for five years, actual and exemplary damages for re-renting within two, a right of first refusal a city may run to ten, and a 30-day re-rental offer if an owner vacates an owner-occupied unit inside ten years.

The Direct Answer

The Ellis Act, at Government Code sections 7060 to 7060.7, stops a California city forcing a residential landlord to stay in the rental business. It is not a right to evict. It applies only to all the accommodations in a structure, never one unit, and leaves the eviction to the ordinary notice and unlawful detainer statutes.

Ellis Act California Requirements: What the Statute Actually Does

Government Code section 7060(a) is a limit on government, not a grant of power to a landlord. No public entity shall, by statute, ordinance, regulation, or administrative action, compel the owner of any residential real property to offer, or to continue to offer, accommodations in the property for rent or lease. A narrow exception covers guestrooms and efficiency units in certain older residential hotels: the hotel must be in a city and county or a city over 1,000,000 in population, hold a permit of occupancy issued before January 1, 1990, and not have delivered a notice of intent to withdraw before January 1, 2004.

Section 7060.7 supplies the purpose in the Legislature’s own words: to supersede any holding or portion of any holding in Nash v. City of Santa Monica, 37 Cal.3d 97, to the extent it conflicts with the chapter, “so as to permit landlords to go out of business.”

Two consequences follow, both in the text.

The chapter does not authorize an eviction. Section 7060.1(d) provides that nothing in the chapter supersedes a list of other laws. The list includes the Civil Code hiring chapter, where the just cause and notice statutes live, the unlawful detainer chapter of the Code of Civil Procedure, the Fair Employment and Housing Act, the Unfair Competition Law at Business and Professions Code section 17200 and following, and the relocation assistance chapter at Government Code section 7260 and following. Withdrawal supplies the reason; the ordinary statutes still supply the process.

The chapter does not override anti-abuse protections. Section 7060.7(c) provides that the act is not intended to override procedural protections designed to prevent abuse of the right to evict tenants. Section 7060.1(e) adds that no party is relieved of any lease obligation under the chapter.

Which Units Can Be Withdrawn From the Rental Market?

All of them in the structure, or none. This is the most consequential rule in the chapter and the most often misunderstood.

Section 7060(b)(1) defines “accommodations” as either the residential rental units in any detached physical structure containing four or more of them, or, where a detached physical structure contains three or fewer, the units in that structure and in any other structure on the same parcel of land, including any four-or-more structure.

Section 7060.7(d)(1) then closes the door: the act does not permit an owner to withdraw from rent or lease less than all of the accommodations as so defined.

So withdrawing units from the rental market California law permits is a set operation: a six-unit building goes out entirely, and a duplex plus a cottage on one parcel go out together. No version of it removes one tenant and leaves the rest rented.

For owners, that makes the Ellis Act a business decision rather than a tenancy decision. The question is not whether one tenancy has become difficult; it is whether the whole property is leaving the rental market for at least two years, and realistically longer given the five-year rent restriction and ten-year first-refusal exposure below.

For tenants, the corollary is a useful test. If neighbours in the same building are still renting, or being offered new tenancies, the withdrawal does not match what the statute permits, and section 7060.6 makes non-compliance a defense in the unlawful detainer.

Two related limits. Section 7060(b)(2) defines “disabled” by reference to Government Code section 12955.3, which includes any physical or mental disability as defined in section 12926. And section 7060.7(f) provides that the chapter does not alter Government Code section 65863.7 or Civil Code section 798.56(f) on mobilehome parks – a different regime.

Ellis Act Notice Requirements California Cities Impose

Nothing in the chapter requires a notice by itself. The notice machinery exists only where a public entity has rent controls by valid exercise of its police power and has legislated for it, by statute, ordinance, or a section 7060.5 regulation.

Where it has, section 7060.4(a) lets the entity require the owner to notify it of an intention to withdraw, with statements under penalty of perjury giving the number of units, their address or location, tenant names, and the rent for each unit. Tenant names, per-unit rent, and the total number of units must be treated as confidential under the Information Practices Act of 1977.

Section 7060.4(b) supplies the clock. Where the ordinance requires the owner to record a memorandum with the county recorder summarising the notice’s non-confidential provisions, with a certification that actions have been initiated to terminate existing tenancies, the date on which the accommodations are withdrawn is 120 days from delivery of that notice to the public entity, in person or by first-class mail.

A tenant who is at least 62 years of age or disabled, and has lived in the accommodations for at least one year before the delivery date, may extend their own withdrawal date to one year after delivery, provided they give the owner written notice of the entitlement within 60 days of delivery. During the extension the tenancy continues on the terms existing at delivery, subject to adjustments otherwise available under the system of control. The owner may elect to extend other tenancies up to a year as well, and has 30 days from the tenant’s notification to tell the public entity of the claim and 90 days from delivery to notice any election and the revised withdrawal date.

Then the sting in subdivision (b)(6): the withdrawal date for the accommodations as a whole – which is what starts every clock in section 7060.2 – is the latest termination date among all the tenants. One qualifying 62-year-old tenant moves the whole property’s five-year and two-year clocks out by roughly eight months. A further voluntary extension beyond the noticed dates does not move the withdrawal date.

Section 7060.4(c) lets the entity require the owner to tell displaced tenants that the entity was notified, what rent figure was reported, their right of first refusal, and the 62-or-disabled extension. Subdivision (d) covers notice of an intention to return the units to the market.

What Rent and Re-Rental Restrictions Apply After Withdrawal?

Four, running two, five and ten years. All depend on the local entity having legislated under section 7060.2.

Five years of rent restriction. Under section 7060.2(a), for all tenancies commenced during the five years after a notice of intent is filed – whether or not the notice is rescinded or the withdrawal completed – or the five years after withdrawal, the units must be offered and rented at the lawful rent in effect when the notice was filed, plus annual adjustments available under the system of control. Paragraph (a)(3) provides that this prevails over any conflicting law authorizing the landlord to set the rate on initial hiring. That is an express override of vacancy decontrol.

Two years of damages exposure. Under section 7060.2(b)(1), if the accommodations are offered again for residential rent or lease within two years of withdrawal, the owner is liable to any displaced tenant for actual and exemplary damages, in an action brought within three years of the withdrawal. Paragraph (b)(2) lets the public entity sue for exemplary damages on the same clock.

A right of first refusal, two years by statute and up to ten by ordinance. Under section 7060.2(b)(3), an owner offering the units again must first offer each unit to the tenant displaced from it, if that tenant advised the owner in writing within 30 days of displacement of a desire to consider an offer and furnished an address. The offer goes by registered or certified mail, postage prepaid, describing its terms, and the tenant has 30 days from deposit to accept. Under subdivision (c), a public entity may extend that requirement to a period not exceeding ten years from withdrawal, with punitive damages capped at six months’ contract rent for failure – and paying them does not extinguish the obligation to comply.

The owner-occupancy trap at ten years. Section 7060.7(d)(2) provides that the act does not permit an owner to decline to make a written re-rental offer to a tenant who occupied a unit when the notice of intent was given. Two units are carved out: one that was the principal residence of an owner or an owner’s family member at withdrawal and continues to be on return, and one that is the owner’s principal residence when the accommodations return to the market. Subparagraph (B) adds the obligation people miss: if the owner vacates that unit within ten years from the date of withdrawal, the owner shall, within 30 days, offer to re-rent where the paragraph requires it.

So the ellis act re-rental restrictions California owners live with are not a two-year inconvenience: a decade-long condition on one unit, and a five-year condition on the rent of all of them.

One more, for buyers. Section 7060.3 provides that where a public entity applies section 7060.2 constraints to a successor in interest, it must record a notice with the county recorder, indexed in the grantor-grantee index, describing the property, the dates the constraints apply, and the owner of record. A bona fide purchaser for value who acquires title after withdrawal is not a successor in interest if that notice was not recorded at least one day before the transfer of title. Anyone buying a recently withdrawn building should read that index first.

Relocation, Eviction, and the Statutes That Still Apply

The Ellis Act supplies a reason to end tenancies. Everything else comes from elsewhere, and this is where owners most often assume the chapter does more work than it does.

The just cause ground. Civil Code section 1946.2(b)(2)(B) lists withdrawal of the residential real property from the rental market as a no-fault just cause. That is the provision the termination notice rests on for a covered tenancy.

The relocation payment. Section 1946.2(d) requires, on any no-fault termination and regardless of the tenant’s income, either a direct relocation payment or a written waiver of the final month’s rent before it comes due, in an amount equal to one month of the rent in effect when the notice issued. A direct payment must be made within 15 calendar days of service. Failure to strictly comply renders the notice void. So the ellis act relocation payment California law requires comes from two places at once: this state minimum, and whatever the local ordinance adds. Subdivision (d)(3)(C) credits the state payment against relocation assistance required by any other law rather than stacking it, and section 7060.1(c) leaves intact a public entity’s power to mitigate the impact on displaced persons, which is where local relocation schedules come from.

The notice period. Civil Code section 1946.1 requires 60 days’ notice from the owner to end a periodic tenancy, or 30 days where the tenant has occupied for less than a year.

Everything the chapter expressly leaves alone. Section 7060.7(a) preserves local authority over land use, including regulation of the conversion of withdrawn housing to condominiums, other subdivided interests, or non-residential use. Subdivision (b) preserves local environmental and land use controls over demolition and redevelopment. Subdivision (e) grants no new price-control power. And section 7060.2(d) subjects new units to price controls on a fair and reasonable return basis, notwithstanding any exemption for new construction, where the accommodations are demolished and replacements built on the same property and offered for rent within five years of withdrawal.

Section 7060.1(a) is the one an owner should check before starting. The chapter does not prevent a public entity from enforcing a contract by which the owner agreed to offer the accommodations for rent in consideration for a direct financial contribution – defined to include contributions under Government Code section 65916 and any interest rate subsidy or tax abatement provided to facilitate acquisition or development. A density bonus or a subsidised acquisition can carry a rental commitment the Ellis Act does not dissolve.

What Remedies Do Displaced Tenants Have?

Three, and the first is procedural rather than a claim.

A defense in the unlawful detainer. Section 7060.6 provides that where an owner seeks by unlawful detainer to displace a tenant from accommodations withdrawn under the chapter, the tenant may appear and answer or demur under Code of Civil Procedure section 1170, and may assert by way of defense that the owner has not complied with the applicable provisions of the chapter, or with the statutes, ordinances, or regulations adopted by a public entity to implement it. It is a compliance defense, and it reaches the local ordinance as well as the state chapter.

Damages for premature re-rental. Section 7060.2(b)(1) gives a displaced tenant actual and exemplary damages where the units are offered again within two years of withdrawal, in an action brought within three years of it. The paragraph expressly preserves any alternative remedy available under the law.

The remedies section 1946.2 supplies. Subdivision (g) voids a termination notice that fails to comply with any provision of that section, and (d)(4) does the same for the relocation requirements. Subdivision (h) gives actual damages, discretionary attorney’s fees and costs, up to three times actual damages on a showing of willfulness or of oppression, fraud, or malice, and punitive damages, where an owner attempted to recover possession in material violation. The Attorney General, a city attorney, or county counsel may seek an injunction.

For tenants, the practical sequence is: keep the notice, note the date it was delivered to the city, put the first-refusal request in writing within 30 days of displacement with an address, and watch the building. Re-rental inside two years, or a neighbour still renting after a supposed withdrawal, are compliance failures the statute names.

When to Bring Counsel In

Four moments. Before filing a notice of intent, because withdrawal is a set operation under section 7060.7(d)(1) and the five-year rent restriction attaches from the filing date whether or not the withdrawal completes. When a tenant claims the 62-or-disabled extension, because it moves the withdrawal date for the whole property under section 7060.4(b)(6) and triggers the owner’s own 30-day and 90-day notice obligations. Before returning any unit to the market, because the two-year damages window, the first-refusal procedure, the five-year rent restriction and the ten-year owner-occupancy obligation run on different clocks. And on any purchase of a recently withdrawn building, because section 7060.3’s recording rule decides whether the constraints follow the title.

Several adjacent questions are covered separately: how an owner or family move-in eviction differs from withdrawing a property, how the statewide rent cap and just cause rules work in full, how local ordinances stack on top of state law, and what defenses arise once an eviction has been filed.

Work with Bay Legal

Bay Legal, PC advises California owners on Ellis Act withdrawals, the notice and recording steps a local ordinance requires, and the multi-year rent and re-rental constraints that follow, and represents tenants displaced by a withdrawal that did not comply. If a withdrawal is being planned or a notice has arrived, call (650) 668-8000 in Northern California or (213) 668-8000 in Southern California, or schedule a consultation at https://baylegal.com/contact-us/.

Frequently Asked Questions

What is the Ellis Act and what does it actually allow?

It is Government Code sections 7060 to 7060.7, and it prevents a public entity from compelling a residential landlord to offer or continue offering accommodations for rent. The Legislature’s stated purpose is to supersede Nash v. City of Santa Monica so as to permit landlords to go out of business. It is not an eviction remedy: the chapter expressly does not supersede the Civil Code hiring provisions, the unlawful detainer chapter, the Fair Employment and Housing Act, or the Unfair Competition Law, and does not override procedural protections against abuse of the right to evict.

Which units can be withdrawn from the rental market?

All of the accommodations in the structure, never a subset. The statute defines accommodations as every residential rental unit in a detached structure containing four or more units, or, where a structure has three or fewer, those units together with the units in any other structure on the same parcel. A separate subdivision states outright that the act does not permit withdrawing less than all of them. A six-unit building leaves entirely; a duplex plus a cottage on one parcel leave together.

What notice must be given to the city and to tenants?

Nothing under the chapter alone – the notice machinery applies only where a city has rent controls and has legislated for it. Where it has, the city may require a notice of intent with statements under penalty of perjury listing units, addresses, tenant names and rents, the names and rents confidential. Where a recorded memorandum is required, the withdrawal date is 120 days after that notice reaches the city. A tenant at least 62 or disabled with a year’s residence may extend their own date to one year.

What rent and re-rental restrictions apply after withdrawal?

Where the local ordinance provides for them: rent on any tenancy commenced within five years of the notice of intent or of withdrawal is capped at the lawful rent in effect when the notice was filed plus permitted adjustments, overriding vacancy decontrol; re-renting within two years exposes the owner to actual and exemplary damages, claimable for three; a displaced tenant who asked in writing within 30 days has a right of first refusal a city may extend to ten years; and an owner who keeps a unit as a principal residence and vacates within ten years must offer to re-rent within 30 days.

What remedies do displaced tenants have?

First, a statutory defense: in an unlawful detainer to displace a tenant from withdrawn accommodations, the tenant may answer or demur and assert that the owner did not comply with the chapter or with the local ordinance implementing it. Second, damages: actual and exemplary damages where the units are re-rented within two years of withdrawal, brought within three, with any alternative remedy preserved. Third, the just cause statute’s own remedies, including a void notice where the relocation requirements were not strictly met and treble damages for a material violation.