Assembly Bill 854 Passes First Committee: Restricts Use of Ellis Act
On January 12th, Assembly Bill 854 passed the state’s Assembly Housing and Community Development Committee after substantial testimony both for and against. The proposed bill passed the Committee on a 6-2 party line vote and will now move onto the state Assembly’s Appropriations Committee.
If it were to become law, Assembly Bill 854 would prohibit rental property owners who have owned their property for less than five (5) years from using or threatening to use the Ellis Act to withdraw rental accommodations from the market, and places other limits on the use of the Ellis Act. Specifically, this proposed bill:
- Prohibits an owner of a rental property from using the Ellis Act to file a notice to withdraw accommodations, prosecute an action to recover possession of accommodations, or threaten to do either, unless the owner has owned the property for at least five years.
- Requires that, if the owner is not an individual person, then all persons or entities with an ownership interest in the property must have held the property for at least five continuous years.
- Prohibits an owner who files intent to withdraw a property with the public entity under the Act from subsequently withdrawing another property, prosecuting an action to recover possession, or threatening to do either of these things, if the other property is purchased within ten years of the prior filing.
- Requires an owner notifying a public entity about an intention to withdraw a property under the Act to include in the notice, the identity of each person, entity, and members of an entity, with an ownership interest in the property. Further specifies that this information shall not be confidential and shall be available for public inspection.
- Provides that a violator of any of these provisions is liable to the tenant for actual damages, special damages of at least $2,000 for each violation, and reasonable attorney fees and court costs as determined by the court.
The “Ellis Act” is a state law which says that landlords have the unconditional right to evict tenants to “go out of business.” For an Ellis eviction, the landlord must remove all of the units in the building from the rental market, i.e., the landlord must evict all the tenants and cannot single out one tenant (for example, with low rent) and/or remove just one unit out of several from the rental market.