Rent regulation & tenants
Ellis Act
Gov. Code §§ 7060–7060.7: an owner's right to exit the rental business by withdrawing all units, subject to notice, relocation, and re-rental penalties.
Definition
The Ellis Act (Gov. Code §§ 7060–7060.7) guarantees that no local government can force a residential landlord to stay in the rental business: an owner may withdraw all accommodations in a building from the rental market despite local rent and eviction controls — all or nothing, no cherry-picking units.
The exit is conditioned. Tenants get at least 120 days' notice — a full year if 62 or older or disabled with a year's tenancy — and cities layer filing, recording, and relocation requirements on top. Re-rent within five years and the withdrawn rent (plus intervening adjustments) snaps back, with displaced tenants holding first refusal; displaced tenants keep re-occupancy rights for ten years; and rental units built on the site within five years can inherit the former rent control.
Why it matters in an underwrite
Ellis is the legal gateway for exiting or redeveloping a rent-controlled building, and its tail is the underwriting problem: the 5–10 year re-rental and right-of-return constraints, six-figure local relocation schedules in LA and SF, and Ellis-history screens in the state's production statutes (typically 10–15 year lookbacks) that can disqualify the successor project from density bonus and streamlining tools. Diligence every acquisition for a recorded withdrawal — the constraints and the tenant-notification list run with the property.
Sources & related guides
See also
See the term in the law itself
Read the controlling text in the Code Library, or ask the AI how it applies to your project.
Last reviewed 2026-07-29. General information, not legal advice.