How to Stop Being a Landlord in Pasadena: Your 4 Exit Options Compared
Pasadena landlords have four exit paths: sell with tenants in place (fastest, but 15-25% lower price), Ellis Act withdrawal (removes property from rental market, requires $6,720-$22,075+ per unit in relocation), owner move-in (50% ownership required, plus 36-month residency commitment), or negotiate tenant buyouts (regulated process with 45-day tenant cancellation right). The right choice depends on your timeline, budget, property type, and how much you need from the sale.
When Being a Landlord Stops Making Sense
You got into rental property ownership for a reason: income, appreciation, tax benefits, maybe all three. But circumstances change.
Maybe the 2.25% rent cap is not keeping pace with your rising costs. Maybe a difficult tenant situation has worn you down. Maybe you inherited a property you never wanted to manage. Maybe you have done the math and realized your money could work harder elsewhere.
Whatever the reason, you are asking a question many Pasadena landlords eventually face: how do I get out?
The answer is not simple. Measure H's tenant protections mean you cannot just decide to stop being a landlord and expect tenants to leave. Each exit path has different costs, timelines, and trade-offs.
The 4 Exit Paths at a Glance
| Option | Timeline | Cost | Best For |
|---|---|---|---|
| Sell with tenants | 30-90 days | 15-25% lower price | Speed, avoiding relocation costs |
| Ellis Act | 4-12 months | $6,720-$22,075+ per unit | Personal use, redevelopment |
| Owner move-in | 2-6 months | Relocation costs | Living in the property yourself |
| Negotiated buyout | Variable | Variable (often similar to relocation) | Mutual agreement, flexibility |
Not sure which path fits your situation? I can run the numbers for your specific property.
📞 (213) 444-22251Sell With Tenants in Place
You list and sell the property while tenants remain. The buyer becomes the new landlord, inheriting all existing leases, rent levels, and tenant protections.
✓ Pros
- Fastest path to exit (30-90 days)
- No relocation costs
- No eviction process
- Straightforward transaction
✗ Cons
- 15-25% lower sale price
- Limited to investor buyers
- Tenant cooperation needed for showings
- Difficult tenants can sabotage sale
Best when: You need to exit quickly, relocation costs would exceed the price discount, your tenants are paying close to market rent, or the property needs significant work anyway.
2Ellis Act Withdrawal
The Ellis Act is a California state law that allows landlords to "go out of business" by removing all units in a property from the rental market. It is the one exit path that Pasadena cannot block.
The Process
- File notice of intent with the Rental Housing Board
- Provide tenants 120-day notice (1 year for seniors/disabled tenants with 1+ year tenancy)
- Pay full relocation assistance to all tenants
- Property cannot be re-rented for at least 5 years (10 years in some cases)
- Original tenants have right of first refusal if you return to rental market
The Costs
Relocation assistance ranges from $6,720 to $22,075+ per unit, depending on unit size, tenancy length, and special circumstances (seniors, disabled, children, low-income, 10+ year tenants).
For a 4-unit building with typical tenants, budget $50,000-$80,000 for relocation alone. Add legal fees ($3,000-$10,000), lost rent during notice period (4-12 months), and potential complications if tenants challenge.
If you Ellis Act and later return to the rental market, original tenants have first right of refusal at their previous rent levels. This restriction can last up to 10 years.
Best when: You want to convert to personal residence, you are planning demolition or major redevelopment, or the property value vacant far exceeds value occupied.
3Owner Move-In
You (or an immediate family member) move into the unit as your primary residence, evicting the existing tenant through a no-fault eviction process.
Requirements
- Ownership threshold: Must own at least 50% of the property as a natural person
- Residency commitment: Must live in the unit for at least 36 consecutive months
- Move-in deadline: Must move in within 60 days of tenant vacating
- Good faith: Must genuinely intend to use as primary residence
- No comparable vacant unit: If you have a similar vacant unit, you cannot displace a tenant
If you do not actually move in within 60 days or do not stay for 36 months, you must offer the unit back to the original tenant at their previous rent and pay their moving expenses. You may also face penalties and potential lawsuits for wrongful eviction.
Best when: You genuinely want to live in the property, you are downsizing, you want to occupy one unit of a multi-unit building, or a family member needs housing.
4Negotiated Tenant Buyout
Instead of formal eviction, you negotiate directly with your tenant. You offer cash (and sometimes other assistance) in exchange for them voluntarily surrendering their tenancy.
Pasadena's Buyout Regulations
Pasadena regulates tenant buyout agreements under Measure H Section 1810. Key requirements:
- Written agreement with specific disclosures on official Rental Board form
- 45-day cancellation period during which tenant can change their mind without penalty
- No coercion or harassment
- Tenant has right to consult attorney before signing
- Copy must be filed with Rental Housing Board within 60 days
There is no fixed formula for buyout amounts, but they often cost similar to or more than relocation assistance. Tenants have leverage because they know the alternative (staying) costs you nothing.
Best when: You have a good relationship with your tenant, both parties want a clean resolution, or the tenant has reason to want to move anyway.
Considering an exit strategy? Let's discuss what makes the most financial sense for your property.
📱 (213) 444-2225The Math That Matters: A Real Example
Let's say you own a 1970s duplex in Pasadena. Both units are rented below market.
Property details:
- Market value (vacant): $1,200,000
- Unit A: 2BR, 5-year tenant, paying $2,100 (market: $2,800)
- Unit B: 1BR, 2-year tenant, paying $1,600 (market: $2,200)
Option A: Sell With Tenants
Option B: Ellis Act
The comparison: Ellis Act nets approximately $190,000 more, but takes 6+ months longer and requires managing the process. Whether that is worth it depends on your circumstances.
If Unit A tenant qualified for multiple special circumstances (senior + disabled + 10+ years), relocation could jump to $25,000+ for that unit alone, changing the math significantly.
Ready to Run the Numbers for Your Property?
Every property is different. Let me analyze your specific situation and show you exactly what each exit path would look like, with real numbers.
Free exit strategy consultation - no obligation
Frequently Asked Questions
How do I stop being a landlord in Pasadena?
You have four options: sell with tenants in place (fastest, 30-90 days), Ellis Act withdrawal (removes property from rental market, 4-12 months), owner move-in (if you want to live there, 2-6 months), or negotiate a tenant buyout (variable timeline). Each has different costs, timelines, and requirements under Measure H.
Can I just not renew my tenant's lease in Pasadena?
No. After 12 months of tenancy, Pasadena tenants have just-cause eviction protection under Measure H. You need a qualifying reason (non-payment, lease violation, owner move-in, Ellis Act, etc.) to end the tenancy. Simply declining to renew is not permitted.
How much does Ellis Act cost in Pasadena?
Relocation assistance ranges from $6,720 to $22,075+ per unit depending on unit size, tenancy length, and special circumstances (seniors, disabled, children). A typical 4-unit building might cost $50,000-$100,000+ in relocation alone, plus legal fees and lost rent during the 4-12 month process.
What's the fastest way to exit as a Pasadena landlord?
Selling with tenants in place is the fastest exit, typically 30-90 days. No eviction process, no waiting periods, no relocation costs. However, expect 15-25% lower sale price than a vacant property and a buyer pool limited to investors.
Can I pay my tenant to leave in Pasadena?
Yes, through a negotiated buyout. Pasadena regulates these agreements under Measure H Section 1810. The agreement must be in writing, the tenant gets a 45-day cancellation period, and the agreement must be filed with the Rental Housing Board within 60 days.
Is owner move-in a real option in Pasadena?
Only if you genuinely intend to live in the property for at least 36 consecutive months. You must own at least 50% of the property as a natural person and move in within 60 days of the tenant vacating. Using owner move-in as a pretext violates the law and can result in significant penalties.
What happens if I don't actually move in after an owner move-in eviction?
If you do not move in within 60 days or do not stay for 36 months, you must offer the unit back to the original tenant at their previous rent and pay their moving expenses. You may also face penalties, fines, and potential lawsuits for wrongful eviction.
How long must I keep property off rental market after Ellis Act?
The property cannot be re-rented for at least 5 years (potentially 10 years under certain circumstances). Original tenants have right of first refusal if you return to the rental market, and the rent would be limited to what they were paying when displaced.
