California tenants are protected by something called the Ellis Act. This is a fair way to allow landlords to retire or change the use or even sell a property that had been used for residential living without selling to another real estate investor for rental.
Basically changing the function of a rental property often comes down to dollars and common sense… Rental properties are investments, when the owner of the investment needs or wants to sell or otherwise do something different with their property for any reason they should be allowed to, this includes making a profit on the rental property. This needs to be the same with other assets like stock, or even personal property.
Some may say – just raise the rent, well the issue where the selling the rental property is the hottest is in rent controlled areas that are unprofitable, because the rents do not keep up with costs associated with the property and the owner is losing money. Couple that with additional regulation from the government and the landlords are being driven out of business.
The landlord has specific responsibilities to the tenants under the Ellis Act where they monetarily assist the tenant to relocate to a new living situation. This allowance recently was increased in April 2014.
Ammiano in San Francisco proposed an overreaching legislation that was alost completely shot down recently because it was too restrictive to the landlord and it superceeded the Ellis Act provisions.
Below is the California Apartment Associations response to the recent results of the new bill not passing.
CAA win: Ammiano’s anti-Ellis Act bill gutted
By MIKE NEMETH
The California Apartment Association and CAA members who took part in Tuesday’s annual Legislative Conference helped gut a bill that would have stripped a landlord’s right to leave the rental housing business.
What remains of AB 2405, by Assemblyman Tom Ammiano, D-San Francisco, is wording that protects a tenant’s credit score should the renter be evicted under California’s Ellis Act.
The bill, however, no longer threatens the Ellis Act itself. Passed by the state Legislature in 1985, Ellis says no local government can require that a rental property owner continue to offer his or her housing for rent. The act is especially important in cities with rent control, where the cost of doing business can leave owners losing money.
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