Years and years of collecting rent, making repairs and dealing with tenants have taken their toll on Larry Landlord. He and his wife Lisa have decided that it is best for him to retire from the landlord/tenant game and focus on his hobby of building model helicopters. Trouble is, they like the income they are getting from the rental and want to keep it coming.

Larry finds out from a friend of his who works at Global College that they are looking for a building to convert into a dormitory for their international students. The area in which they are looking is serendipitously within miles of Larry's property. Larry approaches the dean of Global College and they strike a deal to pay Larry to transform Larry's building into a dormitory.

Q: Can Larry pull his property off of the rental market?

A: Yes. Larry has two options for repurposing his property:

He can make deals with each of the individual tenants and have an attorney draft a Voluntary Vacancy Agreement to make the deal official; or
He can follow the procedure prescribed by California's Ellis Act.

The first option, a Voluntary Vacancy Agreement, allows landlords and tenants a lot of flexibility. Agreements can include anything from free rent to time to relocation payments. This option is preferred by most parties because it affords them the ability to craft an agreement that is tailored to their needs.

The Ellis Act is a longer process that requires precision in following through each of its steps. The steps are as follows:

a. Complete and record the Memorandum Summarizing Non-Confidential Provisions of a Notice of Intent to Withdraw Units from Rental Housing with the County recorder.

b. File a Notice of Intent to Withdraw Units from Rental Housing Use and the certified, stamped copy of the Memorandum described in step a with LAHD.

a. NOTE: All tenants will be eligible for receiving relocation fees. Some tenants may be considered “Qualified” if they have one or more children living with them, are disabled, are low-income or are seniors. Qualified tenants are more costly to relocate.

c. Serve tenants with a notice terminating their tenancy. They must have at least 120 days notice from the date you filed the Notice of Intent to Withdraw with LAHD.

d. Complete and serve a Notice to Tenant of Pending Withdrawal for each unit. Serve them concurrently with a blank Notice of Interest in Renewing Tenancy. Noticing must take place within 5 days of filing the Notice of Intent with LAHD.

e. Place relocation funds for each unit in escrow for said tenants within 15 days of serving tenants with the Notice to Terminate Tenancy.

f. Tenants will have 60 days from service to fill out their Notice of Interest in Renewing Tenancy and send it to you. You will then have 30 days to provide LAHD notice of their claims.

g. If tenants do not move within the allotted 120 days, they will not receive their relocation fees and will be subject to eviction by court proceeding.

The attorneys at The Rad Firm, APC can help you navigate through the process of repurposing your rental property. Call us today to find out the right option for you and your investment.