Court rejects SF law requiring exorbitant tenant relocation fees

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Thanks to a court ruling, San Francisco landlords who use the Ellis Act to leave the rental housing business won’t have to pay tens of thousands of dollars in additional tenant relocation fees.

Under a San Francisco ordinance authored by Supervisor David Campos, landlords using the Ellis Act were required to pay tenants up to $50,000 to cover any rent increases the evicted tenants incur over a two-year period.

Superior court Judge Ronald Quidachay, however, determined that the terms of Campos’ ordinance were unreasonable.

Read more about it in this San Francisco Chronicle  article.

The state Ellis Act, passed in 1985, bars local governments from making property owners stay in the rental housing business.

Before the Ellis Act, rent-controlled cities — like Santa Monica — were forcing landlords to stay in business, even if they were losing money or experiencing other hardships.

Over the years, the Ellis Act has blocked government intrusion, providing a veritable escape hatch for owners who can no longer thrive – or even survive — in rent-controlled communities.

The act does require landlords to provide relocation assistance to displaced tenants and abide by specific notice periods and deed restrictions on the future use of the property.

The court ruled, however, that the ordinance by Campos called for relocation assistance far beyond the reasonable requirements found in Ellis.

Tagged: San Francisco Apartment Association