OUTRAGEOUS GOINGS ON AROUND TOWN (page
2 of 4)
Ellis
Update 2001
While most owners were sleeping in the joy of higher rents and
holiday spirits, the state legislature was at work fighting to
reduce the power of the Ellis Act once again. Now what they have
done is drastically rewrite the definition of "disabled person"
for purposes of which tenants can stay the full year if their
building gets Ellised. Under Ellis, if you remember, an owner
who has had enough of the rent control religion can go out of
business by evicting all tenants and keeping an empty building.
Not much help you think? Well, to owners who have monthly rents
in the low $300’s, it is cheaper to empty the building than
keeping it in shape with that kind of rent. Don’t forget
there’s the City and the Tenant Harassment Law on owners’
tails to worry about too. In 1999, the state decided that the
Ellis process should allow a tenant at least 4 months to vacate
after the owner filed for Ellis, and if a "disabled"
tenant were living in the unit, that tenant should get at least
12 months to vacate. At the time a "disabled" tenant
was tightly defined. Starting in 2001, there is a new expanded
definition of "disabled" for purposes of which tenants
can demand to stay 12 months after the Ellis is filed. This expanded
version is defined in Government Code Section 12955.3, which now
directs the reader to Gov. Code Section 12926. Section 12926 contains
two types of disability: Mental 12926 (i) (aren’t we all
after 20 years of rent control) and Physical 12926 (k). While
the definition gets a bit sticky to understand, it basically states
having a disorder or condition that limits a major life activity
(i.e. it makes achieving that activity difficult). A major life
activity could be physical, mental or social. However, the law
excludes illnesses based on sexual behavior disorders, gambling,
kleptomania, pyromania (thank heavens) and some drug abuse (but
not all). So if you are thinking about Ellising that building,
remember, it may be that you will have more tenants staying the
full 12 months than you thought before.
Now this
may be bad and it may be good. To developers, who wish to obtain
building permits, the extra year of income (12 months after they
filed their Ellis documents with the Board) will help carry the
mortgage while they are in the city hall processing system. To
those who would just rather empty out their buildings and get
on with it, the 12-month delay causes problems. The answer may
be to approach the qualifying disabled tenants and attempt to
purchase them out with a bonus move out payment. Don’t forget,
it is legal to offer your tenants money to move out, but be careful
that the tenants don’t complain to the City Attorney’s
office that the buyout
proposition is harassment on your part.
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