We are looking to buy a duplex in the City of Los Angeles in which both units are currently occupied. If we were to sign a contract with each of the tenants agreeing to pay them, say $10,000 in return for which they agreed to move out, say, 30 days after we took over ownership of the property, would such a contract be enforceable if either or both of the tenants were to renegue? In other words, say one or both of the tenant(s) signed a contract with us but then decided after we purchased the duplex that they wanted to stay. What recourse would we have if they were to tell us, "We're sorry but you can keep the $10,000. We decided we want to stay."
The Los Angeles Rent Stabilization Ordinance (RSO) is a fairly complicated law to understand, even for lawyers who practice in Los Angeles.
The landlord seeks in good faith to recover possession of the rental unit for use and occupancy by the landlord, or the landlord's spouse, children, or parents, grandparents, or grandchildren is one of the "just cause" reasons for being able to recover possession of the rental unit. (LAMC 151.09) Under the provisions of Section 151.30 B, the new occupant must move in within 3 months of vacancy and intend to occupy the rental unit for at least 2 years.
Once every three years, a qualifying landlord (“Mom and Pop”) can pay a reduced relocation fee for a good faith eviction for occupancy by the owner, family member or a resident manager, provided that certain requirements are met as prescribed in Section 151.30 of the LAMC. In these instances, the required relocation assistance is $7,000 for a eligible tenants and $14,000 for qualified tenants.
You will need to file a “Landlord Declaration of Intent to Evict” form with the Los Angeles Housing Department if you wish to take the rental unit out of the rental market.
In California, the Ellis Act enables a landlord who is going out of business to evict the tenants without fault and withdraw from the rental market all of the accommodations which he owns. The Ellis Act was the direct result of the California Supreme Court decision entitled Nash v. City of Santa Monica (1984) 37 Cal. 3d 97.
Under the Ellis Act, "going out of business" means "changing occupations" or "cease to do business as a landlord". The purpose of the Ellis Act was to allow a landlord, who did not want the personal burdens of being a landlord and didn't want to be a landlord anymore, to evict the tenants without cause and withdraw all of the accommodations he owned. Only landlords who are going completely out of the residential rental business can use the Ellis Act.
Frank W. Chen is licensed to practice law in the State of California. The information presented here is general in nature and is not intended, nor should be construed, as legal advice. This posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, consult your own attorney.
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