Ellis Act California: How to Remove Tenants to Sell Your Property
California Government Code §§ 7060-7060.7 gives landlords the right to permanently exit the rental business. Here is exactly how it works, what it costs, and what you cannot do after.
The California Ellis Act (Government Code §§ 7060-7060.7) is a statewide law that lets landlords permanently exit the residential rental business. If you own a rent-controlled building in Los Angeles, the Ellis Act is the legal path that allows you to remove all tenants and sell or convert the property. It does not let you remove one tenant to replace them with another. Every unit in the building must come off the rental market permanently.
Used correctly, the Ellis Act gives you a defined legal process with predictable timelines. Used incorrectly, it exposes you to significant liability, including tenant reinstatement, actual damages, and punitive damages. In 13 years of working with California landlords who want out, I have seen both outcomes. This guide walks you through every step so you understand exactly what you are getting into before you file anything.
The Ellis Act varies significantly by local jurisdiction. While California Government Code §§ 7060-7060.7 sets statewide baseline rules, cities including Los Angeles, San Francisco, Berkeley, and others have layered additional requirements on top. This article provides general education. Before filing any Ellis Act documents, work with a California real estate attorney who knows your specific city's ordinances. Call Justin Borges at (213) 262-5092 to coordinate with the right legal team.
- 01What Is the Ellis Act and Who Can Use It?
- 02What the Ellis Act Does (and What It Doesn't)
- 03Step-by-Step: The Ellis Act Process
- 04Notice Requirements: 120 Days vs. 1 Year
- 05Relocation Assistance Requirements
- 06Re-Rental Restrictions: 2, 5, and 10-Year Rules
- 07Selling During the Ellis Act Process
- 08What Happens If You Get It Wrong
- 09Ellis Act vs. Other Exit Strategies
- 10How Justin Coordinates Ellis Act Sales
- 11Frequently Asked Questions
- 12Quick Reference Cheat Sheet
What Is the Ellis Act and Who Can Use It?
The Ellis Act was passed by the California Legislature in 1985 in response to a California Supreme Court decision that allowed cities to require landlords to remain in the rental business indefinitely. Legislators determined that forcing someone to be a landlord against their will was a constitutional problem. The Ellis Act, codified at California Government Code §§ 7060 through 7060.7, established a statewide right for any residential property owner to exit the rental housing market permanently.
Any owner of residential rental property in California can use the Ellis Act. There are no minimum ownership periods at the state level, though some cities have imposed local waiting periods. In Los Angeles, the Ellis Act applies to properties covered by the Rent Stabilization Ordinance (RSO), which generally means buildings with two or more units built before October 1, 1978, plus certain additions to those buildings (LAMC §§ 151.22-151.28, LAHD, 2025).
The key distinction in Los Angeles is whether your building is subject to the RSO. Single-family homes and condos are generally exempt from the RSO (and therefore from the Ellis Act process in LA, though they may have other tenant protections). If you own a multi-unit building built before October 1978, you almost certainly need to follow the Ellis Act process to remove tenants who have lived there under a long-term rental arrangement.
Want to know if your specific property is covered by the RSO and subject to the Ellis Act process?
Text Justin: (213) 262-5092 Browse LA PropertiesWhat the Ellis Act Actually Does (and What It Does Not Do)
The Ellis Act gives landlords the right to exit the residential rental business permanently. That phrase "permanently" is doing a lot of work. The law was designed to protect landlords who genuinely want out of the rental business, not those who want to cycle tenants or temporarily take units off the market to do a quick renovation and re-rent at higher rates.
What it does: The Ellis Act allows you to serve notice on all tenants in a building, withdraw all units from the residential rental market, and then sell the property vacant (or during the notice period), convert it to condominiums, develop it, or leave it vacant. Once the process is complete, you are legally out of the rental business for that property.
What the Ellis Act ALLOWS
- Permanent withdrawal of all rental units
- Removal of all tenants, including long-term RSO tenants
- Sale of the property during or after the process
- Condo conversion (combined with other approvals)
- Development or demolition of the building
- Owner personal use of the property
What the Ellis Act DOES NOT Allow
- Removing just one tenant while keeping others
- Temporary removal with intent to re-rent (within 2 years)
- Targeting specific tenants for discriminatory reasons
- Re-renting above displaced-tenant rates within 5 years
- Re-renting without offering right of first refusal for 10 years
- Skipping relocation assistance payments
The most common misuse of the Ellis Act that I see: landlords who want to remove one difficult tenant while keeping the others. That is not how this works. The Ellis Act applies to an entire building. If you file an Ellis Act Notice of Intent to Withdraw, every residential unit in that building must be vacated. If you only want to remove one tenant, you need a different approach (lease violation eviction, owner move-in, or a negotiated buyout).
The Ellis Act's notice requirements and relocation assistance obligations apply primarily to rent-stabilized (RSO) buildings in Los Angeles. Non-rent-controlled properties have different rules under AB 1482 (the California Tenant Protection Act). If you own a building built after 1978, you may be in a completely different legal framework. Confirm with an attorney before assuming the Ellis Act applies.
Step-by-Step: The California Ellis Act Process
The Ellis Act process in Los Angeles follows a defined sequence. Skipping any step, or doing steps out of order, can expose you to wrongful eviction liability. Here is the process as it applies to RSO-covered buildings in the City of Los Angeles (LAHD, 2025):
Retain a Real Estate Attorney
Before anything else. Ellis Act compliance is complex and local ordinances vary. Attorney fees now are far cheaper than tenant litigation later.
File Notice of Intent with LAHD
In LA, file the Notice of Intent to Withdraw with LAHD before serving tenants. The postmark date is your official filing date. LAHD reviews and approves the forms.
Serve Written Notices to All Tenants
Serve 120-day notices to all tenants simultaneously. Use the approved LAHD notice form. Do not serve different tenants on different dates.
Pay 50% Relocation Immediately
Half of the required relocation assistance must be paid at the time of serving the notice. The other half is due when the tenant vacates.
Manage Extended Notice Periods
Senior (62+) or disabled tenants who request an extension have up to 1 year. Track each tenant's deadline carefully.
List and Sell (or Develop)
You can list the property for sale during the notice period. The buyer takes the property subject to the Ellis Act and must honor all remaining obligations.
| Step | Trigger Event | Timeline | Tenant Right | Landlord Obligation |
|---|---|---|---|---|
| File with LAHD | Landlord decision to exit | Before serving any notice | None at this stage | File all approved LAHD forms; postmark = start date |
| Serve 120-day Notice | LAHD approval received | Day 0 (filing date) | Right to receive written notice | Serve all tenants simultaneously; pay 50% relocation at service |
| Extension Request Window | Receipt of 120-day notice | 60 days from notice | Senior/disabled tenants may request 1-year total notice in writing | Grant extension to qualifying tenants who timely request it |
| Standard Tenant Vacates | 120-day notice period ends | Day 120 minimum | Right to relocation assistance balance | Pay remaining 50% relocation when tenant vacates |
| Protected Tenant Vacates | 1-year notice period ends | Day 365 maximum | Right to full relocation assistance | Pay remaining 50% relocation; cannot seek possession before date |
| Property Fully Vacant | Last tenant vacates | 4-15 months typically | Right of first refusal (up to 10 years if re-rented) | Observe 2-year re-rental ban; deed restriction recorded |
One thing many landlords do not realize: the re-rental restrictions get recorded against the deed of the property. This means they transfer to any future buyer. If you sell the building after the Ellis Act process and the new owner tries to re-rent within the restricted period, the obligation still exists. Make sure any buyer's purchase agreement addresses this explicitly (CA Government Code § 7060.2).
Questions about the Ellis Act process timeline for your specific property? Let's talk through it.
Text (213) 262-5092 Call Justin NowNotice Requirements: 120 Days vs. 1 Year
California Government Code § 7060.4 requires landlords to provide written notice of withdrawal from the rental market. The baseline notice period is 120 days. However, there is an important exception that catches a lot of landlords off guard: tenants who are 62 or older, or who are disabled, AND who have lived in the unit for at least one year can request a full year of notice.
They must make this request in writing, and they must do so within 60 days of receiving the 120-day notice. If they do not request it within that 60-day window, they lose the right to the extended notice period. Once you receive a valid written request for the extension, you must honor it. You cannot refuse.
| Tenant Category | Notice Period | Qualifying Conditions | Request Deadline |
|---|---|---|---|
| Standard tenant | 120 days | Any residential tenant in covered building | N/A |
| Senior (62+) | 1 Year (365 days) | Age 62 or older; lived in unit 1+ year; must request in writing | Within 60 days of 120-day notice |
| Disabled tenant | 1 Year (365 days) | Disability as defined by state law; lived in unit 1+ year; must request in writing | Within 60 days of 120-day notice |
| Senior or disabled (no request) | 120 days | Qualifies for extension but does not request it in writing within 60 days | Extension right waived |
In practice, this means you could have a building where some tenants vacate at 120 days and one protected tenant stays until 12 months. Your timeline to a fully vacant property depends on the specific mix of tenants you have. In any building with elderly residents, budget for the full year before you can take possession from all units.
I always tell landlord clients: assume the longest timeline. If you have any tenants who are 62+ or disabled, plan on 12 months from filing. That affects your carrying costs, your listing strategy, and your expected close date. Build that into your financial model before you file anything.
Relocation Assistance Requirements
California law requires relocation assistance for Ellis Act displacements of tenants in rent-controlled buildings. The specific amounts depend on your city's ordinance. In the City of Los Angeles, relocation assistance for Ellis Act withdrawals is governed by the RSO and is administered by LAHD. Amounts are updated annually on July 1 (LAHD, 2024-25 Relocation Assistance Bulletin).
The LA City amounts for 2024-2025 (effective July 1, 2024 through June 30, 2025) are:
| Tenant Category | Under 3 Years Tenancy | 3+ Years Tenancy |
|---|---|---|
| Standard Eligible Tenant | $10,300 | $13,500 |
| Qualified Tenant (senior 62+, disabled, or family with minor children) | $21,750 | $25,700 |
For the 2025-2026 period (effective July 1, 2025), LAHD updated amounts to approximately $10,650 / $13,950 / $22,450 / $26,550 respectively, based on annual CPI adjustments. Always confirm current amounts directly with LAHD at (866) 557-7368 before filing, as these numbers update each July.
Half of the relocation assistance must be paid at the time of serving the Ellis Act notice. The other half is due when the tenant actually vacates. This is not optional. Failure to pay the initial 50% at the time of notice service is a procedural defect that can invalidate your Ellis Act process and expose you to wrongful eviction claims. Have the checks ready when you serve the notices.
Outside Los Angeles city limits, the rules differ. Cities like Berkeley require higher minimums (Berkeley Rent Board sets relocation at $19,413 or more per household). San Francisco requires $10,000 per eligible tenant up to $30,000 per household, plus additional amounts for seniors and disabled tenants. Unincorporated LA County and cities without rent control ordinances may have different or minimal relocation requirements at the state level. (ABAG, Tenant Relocation Assistance Profile, April 2025)
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Reserve Your Free SeatThe Re-Rental Restrictions: What You Cannot Do After Ellis
Once you have filed a Notice of Intent to Withdraw under the Ellis Act, California Government Code § 7060.2 imposes a set of re-rental restrictions that stay with the property for up to 10 years. These restrictions apply even if you sell the building. They are recorded against the deed. Any buyer who purchases an Ellis Act property takes it subject to these restrictions.
| Time Period After Withdrawal | What You CANNOT Do | Consequence of Violation |
|---|---|---|
| 0 to 2 Years | Cannot re-rent any unit to anyone under any circumstances | Tenant reinstatement at prior rent; actual damages; possible punitive damages (CA Gov. Code § 7060.2) |
| 2 to 5 Years | If you re-rent, must give displaced tenant right of first refusal. Cannot charge more than the rent the displaced tenant paid (plus allowable RSO increases). | Displaced tenant may claim unit at original rent; damages for excess rent collected |
| 5 to 10 Years | If you re-rent, must offer right of first refusal to displaced tenant. Can offer to others if tenant declines. | Displaced tenant may sue for right of first refusal and damages |
| After 10 Years | Re-rental restrictions expire | No Ellis Act re-rental restrictions (other rent control rules may still apply) |
The re-rental restrictions are the part of the Ellis Act that sellers and their buyers most often underestimate. I have had transactions where a buyer was planning to renovate and re-rent units as a value-add play, only to find out mid-escrow that the building had been through an Ellis Act withdrawal five years earlier. The restrictions transferred with the deed, and the buyer's business model collapsed.
If you are selling a property that has been through an Ellis Act withdrawal, disclose it. If you are buying one, check the title chain. The withdrawal is recorded, but it is easy to miss if no one is specifically looking for it.
Landlords who sold their Ellis Act properties and then the new owners attempted to re-rent within the restricted period have faced significant liability. The re-rental obligation runs with the property, not the person who filed the Ellis Act. Do not assume that selling the building erases the restrictions for the new owner.
Thinking about buying a property that went through an Ellis Act withdrawal? Let's check the title chain and map out the restrictions before you close.
Text (213) 262-5092 Browse LA Multi-Family PropertiesSelling During the Ellis Act Process
One of the most useful features of the Ellis Act, from a landlord-seller perspective, is that you do not have to wait until the building is fully vacant to sell it. You can list the property for sale from the moment you file the Notice of Intent to Withdraw. The building sells tenant-occupied, with the buyer stepping into your shoes as the party responsible for completing the Ellis Act process.
In practice, this means buyers who purchase Ellis Act properties are taking on several obligations: they must honor the remaining notice periods for all tenants, they must pay the remaining 50% of relocation assistance when each tenant vacates, and they take the property subject to all the re-rental restrictions. This significantly limits the buyer pool to experienced investors and developers who understand what they are buying.
For properties in Highland Park, Glassell Park, Silver Lake, and other NELA neighborhoods where I work frequently, tenant-occupied Ellis Act buildings typically sell at a discount to vacant equivalent value. The discount reflects the buyer's calculation of remaining relocation costs, notice period carrying costs, and the complexity premium of an active legal process. That discount can range from 10-25% depending on the number of units and how far into the process you are when you sell.
One structure I coordinate regularly: the seller initiates the Ellis Act, completes service of notice on all tenants, pays the initial 50% relocation at service, and then sells with the property in-process. The purchase agreement specifies exactly which obligations transfer to the buyer and which the seller has already satisfied. This structure requires careful drafting but can work well when both parties understand what they are doing.
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Get My Free Property ValuationFor more context on selling tenant-occupied properties in Los Angeles without using the Ellis Act, see my complete guide: How to Sell a Tenant-Occupied Property in California. And for the probate angle, my article on selling a house in probate in California covers the estate sale process, which sometimes intersects with Ellis Act situations when an inherited building has long-term tenants.
What Happens If You Get It Wrong
A wrongful Ellis Act eviction is not a parking ticket. The potential liability is serious enough that courts and local housing boards in Los Angeles take these cases aggressively. There are several ways the process goes wrong, and each carries its own set of consequences.
| Violation Type | What Went Wrong | Potential Consequences | Severity |
|---|---|---|---|
| Selective withdrawal | Filed Ellis Act but only served some tenants; kept others in place | Process voided; tenant reinstatement; wrongful eviction damages | Critical |
| Pre-mature re-rental | Re-rented units within the 2-year prohibition period | Tenant reinstatement at prior rent; actual damages; possible punitive damages; LAHD enforcement action | Critical |
| Relocation non-payment | Failed to pay 50% relocation at time of notice service | Notice may be defective; tenant can challenge Ellis Act filing; delays entire process | Critical |
| Notice timing error | Served notice before LAHD approved and returned the filing | Notice may be invalid; restart process; additional carrying costs | High |
| Protected tenant denied extension | Refused valid written extension request from senior or disabled tenant | Tenant has right to stay full year; if forced out, wrongful eviction damages; potential punitive damages | Critical |
| Re-rental at higher rent (0-5 years) | Re-rented within 5 years at rent above what displaced tenant paid | Displaced tenant can claim unit at original rent; refund of excess rent collected; damages | High |
Tenant attorneys in Los Angeles know the Ellis Act compliance checklist cold. They look for procedural defects specifically because a single error can unwind the entire process. The LAHD also has authority to file civil actions against landlords for exemplary and punitive damages in cases of fraudulent Ellis Act evictions (Stimmel Law, Ellis Act Analysis, 2024).
The bottom line: the Ellis Act gives you a legal path out of the rental business, but it is not self-executing. You do not file the paperwork and then coast. Every step has timing requirements, payment obligations, and documentation standards. This is why I always work in coordination with a real estate attorney on any Ellis Act sale. My job is to position the property correctly, manage the sale timing, and coordinate the listing strategy around the legal milestones your attorney sets.
Ellis Act vs. Other Exit Strategies for California Landlords
The Ellis Act is one of several paths available to California landlords who want to sell tenant-occupied property. Understanding how it compares to alternatives helps you choose the right approach for your situation. Each strategy has different costs, timelines, restrictions, and risk profiles.
| Factor | Ellis Act | Cash for Keys (Buyout) | Owner Move-In (OMI) | Sell Tenant-Occupied |
|---|---|---|---|---|
| Statewide legal authority | Yes (Gov. Code §7060) | Negotiated (private contract) | Yes (RSO allows OMI evictions) | N/A (no eviction needed) |
| Applies to entire building? | Yes, mandatory | Can be unit-by-unit | No, one unit only | N/A |
| Typical timeline to vacant | 4 to 15 months | 30 to 90 days (if tenant agrees) | 60 days minimum; varies | No vacancy needed |
| Mandatory relocation payment | Yes, set by city ordinance | Negotiated (often higher) | Yes, set amounts (1-3 months rent) | None |
| Re-rental restrictions | 2-year ban; 10-year first refusal; recorded on deed | None (unless negotiated) | Owner must occupy for 36 months | None |
| Buyer pool impact | Narrows to developers/sophisticated investors | Widens (vacant = broader buyer pool) | Limited (owner-occupant only) | Investors seeking income properties |
| Risk of tenant legal challenge | High (complex process; many failure points) | Low (voluntary; tenant signs release) | Moderate (OMI requirements are strict) | Low (no eviction) |
| Attorney required? | Strongly yes | Recommended | Yes | Standard real estate counsel |
| Best for... | Multi-unit buildings where all tenants need to vacate and buyout negotiations have failed | Single tenants or small buildings where landlord-tenant relationship is workable | Owner who genuinely wants to occupy one unit | Landlords who want out of management but do not need vacant possession |
In my experience working with landlords across Los Angeles County, the most common pattern is: attempt a negotiated tenant buyout first, and use the Ellis Act as a fallback if buyout negotiations fail. The buyout approach is faster, leaves no deed restrictions, avoids the LAHD filing process, and in many cases, costs less than the mandatory relocation amounts because you can negotiate the terms. For more on the buyout approach and how it compares to other exit strategies, see my article on selling an inherited house in California which covers multiple exit paths for property owners who need to sell.
When buyout negotiations break down, or when tenants are savvy about their rights and know that a voluntary buyout gives them negotiating power to demand large sums, the Ellis Act gives you a defined legal right with predictable (if expensive) cost. That predictability has value when your alternative is an open-ended negotiation with a tenant who has no incentive to move.
Not sure if Ellis Act, cash for keys, or selling occupied is right for your building? Let's run the numbers on each option.
Text (213) 262-5092 Get Free Property ValuationHow I Coordinate Ellis Act Sales
I want to be direct about what my role is and what it is not. I am a Realtor, not an attorney. In 13 years of working with California landlords on complex tenant situations, I have learned that the most expensive mistakes happen when someone tries to save money by not involving the right professional at the right stage. My job is to coordinate the real estate side of an Ellis Act sale, and I always do that in partnership with a real estate attorney who handles the legal filings.
Here is what that coordination looks like in practice. When a landlord comes to me with an Ellis Act situation, the first call I make is to my network of California real estate attorneys who specialize in RSO and landlord-tenant law. We map out the timeline together: when LAHD filing occurs, when notices are served, when the first relocation payment is due, when tenants are expected to vacate, and when the building will be ready for market. I build the listing strategy around those legal milestones, not the other way around.
Property valuation pre- and post-Ellis Act vacancy. BPO and comparative market analysis for investor buyer pool. Disclosure drafting (the re-rental restrictions, deed-recorded limitations, and tenant obligations must all appear clearly in the purchase agreement). Buyer vetting to confirm they understand and can handle an Ellis Act property. Escrow coordination to ensure relocation payment obligations are correctly structured. Timeline management so the legal process and listing strategy stay aligned.
The properties where I have seen Ellis Act sales go smoothly are the ones where the landlord, their attorney, and their real estate agent are all working from the same timeline and talking regularly. The ones that go sideways are almost always situations where the landlord handled the legal filings themselves, or worked with an agent who had never done an Ellis Act sale before, or skipped attorney review on the purchase agreement.
If you own a rent-controlled building in Los Angeles, are ready to exit the rental business, and want to sell, call me at (213) 262-5092. We will talk through your specific situation, I will connect you with the right legal team, and we will build a plan that accounts for every step from LAHD filing to close of escrow. The Ellis Act has strict compliance requirements. Getting it wrong can cost you tens of thousands of dollars. The right team makes that avoidable.
For landlords dealing with other complex situations, I also handle probate sales and inherited property sales across all of Los Angeles County. And if you are dealing with a divorce situation on top of a rental property, see my guide on selling a house during divorce in California.
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California Ellis Act: Statewide Law vs. Local Ordinance Variations
One of the most important things to understand about the Ellis Act is that it establishes a floor of landlord rights, not a ceiling of tenant protections. California Government Code §§ 7060-7060.7 gives every California landlord the right to exit the rental business. But individual cities can and do layer additional requirements on top of the state law. If you own property in a city with a local rent ordinance, you are subject to both layers simultaneously.
Los Angeles is the most common context I deal with, but the Ellis Act applies across all of California. If you own rental property in San Francisco, Berkeley, Santa Monica, West Hollywood, or any other city with a local rent stabilization ordinance, your relocation amounts and procedural requirements are going to differ significantly from LA City. Always confirm with a local attorney who knows the specific city's rules.
| Jurisdiction | Governing Local Rule | Relocation Assistance | Notable Local Additions |
|---|---|---|---|
| California Statewide | Gov. Code §§ 7060-7060.7 | State law does not mandate specific amounts; defers to local ordinances | Baseline notice rights (120 days / 1 year); re-rental restrictions (2/5/10 years) |
| City of Los Angeles | LAMC §§ 151.22-151.28 | $10,300-$25,700 (2024-25); adjusted July 1 annually by LAHD | Must file Notice of Intent with LAHD before serving tenants; postmark date = filing date |
| San Francisco | SF Admin Code § 37.9A | $10,000+ per eligible tenant; up to $30,000 per household; additional for seniors/disabled (SFRB, 2024) | Six-month advance filing with Rent Board; complex relocation calculation including moving costs |
| Berkeley | Berkeley Rent Ordinance | $19,413+ per household (Berkeley Rent Board, 2024) | Higher base relocation than LA; detailed procedural requirements with Rent Board filing |
| Santa Monica | SMMC Chapter 4.36 | Two months' rent minimum; higher for long-term/senior/disabled tenants | Filed with Santa Monica Rent Control Board; specific application forms required |
| West Hollywood | WeHo Rent Stabilization Ordinance | Three months' rent minimum; varies by tenancy length and tenant status | File with WeHo Rent Stabilization Commission |
| Unincorporated LA County | LA County RSO (limited) | County RSO applies to some unincorporated areas; check specific parcel | Many unincorporated areas are not subject to local rent control; state AB 1482 may apply instead |
The key takeaway from this table: if you own rental property anywhere in California, do not assume the LA City rules apply to your property. The specific amounts, filing agencies, procedural requirements, and local protections on top of the state law vary significantly by city. Before filing anything anywhere, the first call is to a real estate attorney who practices in that specific jurisdiction.
For properties in the San Gabriel Valley cities I cover most frequently, including Pasadena, Alhambra, San Gabriel, Temple City, and Arcadia, most are incorporated cities with their own municipal codes. Some have local rent stabilization ordinances layered on top of state law. Others rely primarily on AB 1482 (the California Tenant Protection Act of 2019) for rent control, which has different rules and different exit procedures than the RSO-era ordinances.
If your building was built after January 1, 2005, or is a single-family home or condo, it is likely subject to AB 1482 rather than a local RSO (with some exceptions). AB 1482 is a statewide just-cause eviction law, not a local rent control ordinance. The rules for removing tenants under AB 1482 differ from the Ellis Act process under the RSO. Do not assume the Ellis Act procedure described in this article applies to your building without confirming which law actually governs it. Call Justin at (213) 262-5092 or contact your city's housing department.
Own rental property outside LA City? Get clarity on which laws apply to your specific building and city before filing anything.
Text Justin: (213) 262-5092 Call (213) 262-5092Ellis Act California: Quick Reference Cheat Sheet
The key numbers and rules at a glance
| Topic | Rule / Amount | Source |
|---|---|---|
| Governing law | CA Government Code §§ 7060-7060.7 | State of California |
| LA City local law | LAMC §§ 151.09.A.10, 151.22-151.28 | LAHD, 2025 |
| Standard notice period | 120 days written notice to all tenants | CA Gov. Code § 7060.4 |
| Extended notice (senior/disabled) | 1 year (365 days), upon written request within 60 days | CA Gov. Code § 7060.4 |
| LA relocation (standard, under 3 yr) | $10,300 (2024-25); $10,650 (2025-26 est.) | LAHD Relocation Bulletin, 2024-25 |
| LA relocation (standard, 3+ yr) | $13,500 (2024-25); $13,950 (2025-26 est.) | LAHD Relocation Bulletin, 2024-25 |
| LA relocation (qualified, under 3 yr) | $21,750 (2024-25); $22,450 (2025-26 est.) | LAHD Relocation Bulletin, 2024-25 |
| LA relocation (qualified, 3+ yr) | $25,700 (2024-25); $26,550 (2025-26 est.) | LAHD Relocation Bulletin, 2024-25 |
| Relocation payment timing | 50% at time of notice service; 50% when tenant vacates | LAHD, 2025 |
| Re-rental prohibition | 2 years from withdrawal date (absolute ban) | CA Gov. Code § 7060.2 |
| Re-rental rent restriction | 5 years; cannot exceed displaced tenant's rent (plus allowed increases) | CA Gov. Code § 7060.2 |
| Right of first refusal | 10 years from withdrawal date | CA Gov. Code § 7060.2 |
| LAHD filing agency (LA City) | Los Angeles Housing Department, (866) 557-7368 | LAHD, 2025 |
| Can sell during process? | Yes; buyer takes property subject to all Ellis Act obligations | CA Gov. Code § 7060 |
Ellis Act Carrying Costs: What to Budget Before You File
The Ellis Act process is not free. Beyond the mandatory relocation assistance payments, you carry the property through an extended notice period without the rental income you were collecting before. For any landlord considering the Ellis Act, a clear-eyed financial projection before you file is not optional. It is the difference between a planned exit and a financial crisis.
Here is a realistic cost model for a two-unit RSO building in Los Angeles City where both tenants are long-term (3+ years) and one tenant qualifies for the senior/disabled extension. This is not an unusual scenario in Highland Park, Glassell Park, Silver Lake, or Atwater Village, where many RSO buildings have had the same tenants for a decade or more.
| Cost Category | Sample 2-Unit Building | Notes |
|---|---|---|
| Relocation (Tenant 1, standard, 3+ yrs) | $13,500 | 2024-25 LAHD amount; half at service, half at vacate |
| Relocation (Tenant 2, qualified/senior, 3+ yrs) | $25,700 | Senior extension to 12 months; higher relocation tier |
| Total Mandatory Relocation | $39,200 | Minimum. No negotiation on this amount in LA City. |
| Attorney fees | $3,000-$8,000 | Ranges widely; complex tenant situations push higher |
| Carrying costs during notice period | $8,000-$20,000 | Mortgage, taxes, insurance for 4-12 months post-filing without rental income |
| Property prep for sale | $5,000-$30,000 | Deferred maintenance, staging, deep clean; varies by condition |
| Estimated Total Cost | $55,200-$97,200 | Before standard selling costs (agent commission, transfer taxes, escrow) |
These numbers make it clear why the decision to use the Ellis Act versus selling tenant-occupied is not straightforward. A vacant building in Los Angeles typically sells for 15-20% more than the same building with tenants in place, according to industry data cited by California landlord attorneys. But that vacant premium only makes financial sense if it exceeds the total cost of getting there. For a $1.2M building, a 15% vacant premium is $180,000, which comfortably exceeds $97,200 in total Ellis Act costs. For a $600,000 building, the math is much tighter.
I run this analysis for every landlord client who calls me about an Ellis Act situation. Sometimes the numbers support going through the process. Sometimes they point to selling occupied. The answer is almost never obvious without actually modeling it out with your specific property value, tenant mix, and timeline. Text me at (213) 262-5092 and we will run your numbers.
If you have owned your rental property for many years, the sale will likely trigger capital gains taxes. California taxes capital gains as ordinary income (up to 13.3% state rate, plus federal). If you have a low cost basis from a long hold, the tax hit can significantly affect your net proceeds. Talk to a CPA before finalizing your exit strategy. Some landlords in this situation explore a 1031 exchange if they want to redeploy capital into another investment property rather than cashing out. See my guide on 1031 exchanges in Los Angeles for context.
Ellis Act California: FAQs
Can I use the Ellis Act to remove just one tenant so I can sell?
No. The Ellis Act requires you to withdraw ALL rental units in the building from the rental market permanently. You cannot selectively remove one tenant while keeping others. If you only want to remove a specific tenant, you need a different legal tool: a lease violation eviction (if there is a valid cause), an owner move-in eviction (if you plan to occupy), or a negotiated cash-for-keys buyout.
How much notice do I have to give tenants under the Ellis Act?
Standard tenants receive 120 days of written notice under California Government Code § 7060.4. Tenants who are 62 or older, or who are disabled, and who have lived in the unit for at least one year, may request an extension to a full year (365 days). They must make this request in writing within 60 days of receiving the notice. If they do not make the request within that window, the standard 120-day period applies.
How much relocation assistance do I owe tenants in Los Angeles?
In LA City (RSO-covered units), relocation amounts for 2024-2025 range from $10,300 for tenants with under 3 years of tenancy to $25,700 for qualified tenants (seniors, disabled, families with children) with 3+ years. These amounts update annually on July 1. Half must be paid when the notice is served; the other half is due when the tenant vacates. Always verify current amounts with LAHD at (866) 557-7368.
Can I sell my property while the Ellis Act process is still going on?
Yes. You can list and sell the property while tenants are still living there during the notice period. The buyer purchases the property subject to the existing Ellis Act process and must honor whatever time remains on the tenants' notice periods. The Ellis Act restrictions, including re-rental prohibitions, run with the deed and transfer with the property.
What happens if I re-rent the units too soon after an Ellis Act withdrawal?
Under California Government Code § 7060.2, you cannot re-rent any unit for 2 years after withdrawal. If you re-rent within 5 years, the rent cannot exceed what the displaced tenant paid (plus allowable increases). Displaced tenants have a right of first refusal for up to 10 years. Violations can result in tenant reinstatement, actual damages, and punitive damages enforced by LAHD or through private tenant action.
Is the Ellis Act the same as a regular eviction?
No. A standard eviction removes a tenant for cause (nonpayment, lease violation, end of lease term). The Ellis Act is a no-fault withdrawal from the rental market entirely. It cannot be used against a specific problem tenant while keeping other tenants in place. The legal process, notice timelines, relocation obligations, and post-vacancy restrictions are completely different from a standard eviction.
Do I need to file paperwork with a government agency to start the Ellis Act process?
Yes. In Los Angeles, you must file a Notice of Intent to Withdraw with the LA Housing Department (LAHD) before serving notices on tenants. LAHD reviews the filing, and the postmark date of your approved forms is the official start date of the process. The notice of termination that you serve on tenants must be issued the same day as the postmark date on your LAHD filing. Other cities with rent control ordinances have similar filing requirements.
Should I try a tenant buyout agreement before going the Ellis Act route?
In most situations, yes. Tenant buyouts (cash for keys) are faster, less adversarial, leave no deed restrictions on future re-rental, and give you more flexibility on negotiated terms. The Ellis Act is more appropriate when buyout negotiations have failed, when a tenant is holding out for an unreasonable amount, or when you are committed to permanent withdrawal regardless. Call Justin Borges at (213) 262-5092 to talk through which approach fits your building.
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