Localities in California are allowed to regulate the price of rental housing and even to impose restrictive conditions on evictions. However a locality cannot force a residential rental property owner to stay in the apartment leasing business. The state’s Ellis Act allows the landlord to exit the business by evicting all tenants for redevelopment or some other purpose with only 120 days notice. Senior and disabled tenants can stay in their home for up to a full year. That additional time is useful for finding replacement housing and it provides additional leverage if the household negotiates a cash buyout. Here is what you need to know.
What is ‘Ellis’?
The Ellis Act allows the landlord to terminate a tenancy with only 120 days (four months) notice. This applies to any residential tenancy — even rent-stabilized units — unless there is a fixed-term lease in effect. The principle is codified in California Government Code Chapter 12.75 (aka the ‘Ellis Act’) which allows a residential landlord to exit the apartment leasing business and therefore terminate tenancies involuntarily.
From a public policy perspective, Ellis is a problem because a rental property that is withdrawn from the rental market means the loss of relatively-affordable rental housing. In fact an Ellised property can sit empty for years. When the supply of rental housing is diminished the cost of rental housing for everybody else will rise.
From a tenant’s perspective, an Ellis eviction means the loss of home. Most tenants will be unable to find comparably affordable rental housing in Beverly Hills; some may no longe qualify for an apartment even at the same rent. Those tenants will likely leave the city and perhaps the region.
The implications of a no-fault eviction have led Beverly Hills to attach longer noticing periods (such as one year for major remodeling) however the city continues to allow 120 for an Ellis eviction. However renting household with a relatively senior occupant (62+ years of age) or a disabled occupant is entitled to more than 120 days notice. If the household notifies the landlord in timely fashion of their eligibility, the household may continue the tenancy for a full year on the same terms.
The longer noticing period is crucial especially for households that will have a difficult time finding replacement housing. For this reason we strongly recommend households with a senior or disabled occupant not to accept a cash buyout immediately but instead carefully consider the implications of that agreement.
The Ellis process is prescribed in great detail in rent stabilization ordinance section 4–6–6(L). This is the key subsection:
If the tenant or lessee is at least sixty two (62) years of age or is disabled, and has lived in his or her apartment unit for at least one year prior to the date of delivery to the City of the notice required by subsection L2a of this section, then the date of withdrawal of that apartment unit shall be extended to one year from the date of delivery of the notice to the City, provided that the tenant or lessee has given the landlord written notice of his or her entitlement to the extension within sixty (60) days of delivery to the public entity of the notice of intent to withdraw the apartment unit from the rental market. — B.H.M.C. 4–6–6(L)(2)(d)
The ordinance says that any occupant who is aged 62 or older, and who has lived in the apartment for at least one year prior to the landlord’s formal notice to the city of termination, makes that household eligible to continue their tenancy for a full year on the same terms before eviction. The birth date matters: if the occupant is one day shy of her 62nd birthday (at the time of the landlord’s notice to the city) then she would not be entitled to anything more than 120 days before termination.
Often a landlord or his representative will come around to sniff out tenants about accepting a buyout. These initial feelers inevitably come with a lowball offer. Our advice to an eligible occupant: say nothing about age or any inclination toward a buyout. The less the landlord knows the better. Only after the landlord has formally notified the city of his intent to terminate pursuant to Ellis should a tenant speak up and self-identify as a member of the protected age class. Not a day before that notice is official!
Disability requires a little more clarification. Subsection 4–6–0(c) of our rent stabilization ordinance defines disability this way:
Any person who is receiving benefits from a Federal, State, or local government, or from a private entity on account of a permanent disability that prevents the person from engaging in regular, full time employment.
However where it comes to Ellis a different definition applies as rent stabilization ordinance section 4–6–6(L) notes cryptically:
For the purpose of this section…the term “disabled” shall mean a person with a disability, as defined in section 12955.3 of the California Government Code. – B.H.M.C. 4–6–6(L)(10)
So we have a look at §12955.3 of the Government Code:
For purposes of this part, “disability” includes, but is not limited to, any physical or mental disability as defined in Section 12926.
So we then turn to Government Code §12926 which concerns discrimination in employment and housing.
The definition of physical disability there is quite open to interpretation!
“Physical disability” includes, but is not limited to, all of the following: (1) Having any physiological disease, disorder, condition, cosmetic disfigurement, or anatomical loss that does both of the following:(A) Affects one or more of the following body systems: neurological, immunological, musculoskeletal, special sense organs, respiratory, including speech organs, cardiovascular, reproductive, digestive, genitourinary, hemic and lymphatic, skin, and endocrine. (B) Limits a major life activity. — §12926(m)
Subsection (m)(1)(b) later clarifies the key terms ‘limits’ and ‘major life activities’:
(i) “Limits” shall be determined without regard to mitigating measures such as medications, assistive devices, prosthetics, or reasonable accommodations…. (iii) “Major life activities” shall be broadly construed and includes physical, mental, and social activities and working.
In other words, a limitation which is mitigated is nevertheless a limitation for the purposes of qualifying for additional time prior to eviction under the Ellis Act. Moreover subsection §12926(m)(2) expands the definition of physical disability even further to include “Any other health impairment…that requires special education or related services.”
Mental disability as a qualifying condition is defined in §12926 also:
(j) “Mental disability” includes, but is not limited to, all of the following: (1) Having any mental or psychological disorder or condition, such as intellectual disability, organic brain syndrome, emotional or mental illness, or specific learning disabilities, that limits a major life activity…. or Any other mental or psychological disorder or condition not described in paragraph (1) that requires special education or related services.
Again, major life activity is defined to include physical, mental, and social activities and working. And to underscore how broadly the state is interpreting the definition of disability, Government Code section §12926.1 further clarifies conditions that qualify:
Physical and mental disabilities include, but are not limited to, chronic or episodic conditions such as HIV/AIDS, hepatitis, epilepsy, seizure disorder, diabetes, clinical depression, bipolar disorder, multiple sclerosis, and heart disease.
Moreover, disability in regard to employment and housing is not to be interpreted as narrowly as the federal definition would have it:
In addition, the Legislature has determined that the definitions of “physical disability” and “mental disability” under the law of this state require a “limitation” upon a major life activity, but do not require, as does the federal Americans with Disabilities Act of 1990, a “substantial limitation.” This distinction is intended to result in broader coverage under the law of this state than under that federal act. Under the law of this state, whether a condition limits a major life activity shall be determined without respect to any mitigating measures, unless the mitigating measure itself limits a major life activity, regardless of federal law under the Americans with Disabilities Act of 1990. Further, under the law of this state, “working” is a major life activity, regardless of whether the actual or perceived working limitation implicates a particular employment or a class or broad range of employments. — Government Code §12926.1(c)
That adds up to an expansive definition of disability that may make all the difference to a household that will want to qualify for one year’s notice prior to an Ellis eviction instead of the Act’s 120 days. A landlord can extend that year to other non-qualified households, pursuant to the Beverly Hills rent stabilization ordinance, but in reality a landlord will prefer to buy-out the qualified household or else simply let the other units sit empty. The additional rent is not meaningful in the larger financial picture and those surrounding empty units can help to persuade the qualified household to vacate sooner rather than later.
Multifamily housing is in short supply these days and rents are rising at double-digit percentages. The word on the rental industry street is that multifamily is the next big investment play. That means speculators are already circling. There are several large residential multifamily projects in the early stages. Tenants who haven’t already received (or accepted) a buyout may well see an Ellis eviction notice in the near future now that no-fault evictions will resume upon expiration of the Beverly Hills moratorium on May 31st.
If the landlord comes calling with a buyout it is a good idea to know your rights and specifically whether the household qualifies for additional time in the apartment by virtue of age or disability. Having a full year in the apartment when the landlord is itching to move on a redevelopment project is a powerful incentive for the landlord to negotiate. Know your options! And read more about buyouts:
Cash-for-Keys Buyouts: What You Need to Know.