What Is the Ellis Act and How Can I Use It in Los Angeles?

The Ellis Act gives Los Angeles landlords a legal pathway to exit the rental business—but the process is heavily regulated. If you own a rent-controlled property and are considering removing it from the rental market, here’s what you need to know about using the Ellis Act in Los Angeles.

What is the Ellis Act?

The Ellis Act is a California state law (Government Code Sections 7060–7060.7) that allows property owners to permanently withdraw their property from the rental market—even if tenants currently live there. It’s commonly used when landlords want to:

• Demolish rent-controlled units for redevelopment.

• Convert apartments to condos or owner-occupied units.

• Repurpose the property for a different use (e.g., hotel, commercial).

Important: You must remove all units in the building—not just one or two.

🔗 Ellis Act - Government Code 7060

How the Ellis Act Works in Los Angeles

Los Angeles has its own rules layered on top of the Ellis Act to protect tenants. Here's how it plays out:

• Full Building Eviction Required: You must evict all tenants in the building—partial withdrawals are not allowed.

• Relocation Assistance: Landlords are required to pay between $8,500 and $21,200 per unit, depending on tenant income, age, and how long they've lived there.

• Re-Rental Restrictions:

  • You cannot re-rent the units for at least 5 years.

  • If you do re-rent within 10 years, displaced tenants have a right to return at their previous rent.

• Good Faith Requirement: Landlords must actually intend to leave the rental business. If you don’t follow through, tenants can sue.

Steps to Legally Use the Ellis Act

1. File Notice of Intent to Withdraw

   • Submit this to the Los Angeles Housing Department (LAHD).

   • Notify all tenants within strict legal timelines.

2. Provide Relocation Payments

   • Calculate based on tenant circumstances.

   • Pay on time to avoid legal penalties.

3. Comply with Re-Rental Restrictions

   • You must keep units off the rental market or face steep consequences.

   • If re-renting later, offer units back to original tenants first.

4. File with the County Recorder

   • Record a declaration showing the property was withdrawn under the Ellis Act.

5. Consult Legal Help

   • Ellis Act cases are complex and high-stakes—always work with a qualified attorney.

Should You Use the Ellis Act?

Pros:

• Exit the rental business completely.

• Clear the property for redevelopment or resale.

• Legal alternative when buyouts or owner move-ins are not possible.

Cons:

• High upfront relocation costs.

• Mandatory multi-year rental restrictions.

• Potential tenant lawsuits.

• Public scrutiny or tenant organizing.

Real Example

An LA landlord wanted to demolish a 4-unit rent-controlled building and build new condos. Instead of offering cash-for-keys, they filed under the Ellis Act. They paid $80,000+ in relocation fees and had to wait 5+ years before selling or renting again—but ultimately doubled their property value through redevelopment.

Thinking about using the Ellis Act to remove your LA property from the rental market? The Borges Real Estate Team can walk you through your options and connect you with trusted legal help. Let’s talk.