TO: INTERESTED PROPERTY OWNERS
SUBJECT: INFORMATION PACKET AND FORMS FOR COMPLYING WITH THE ELLIS IMPLEMENTATION ORDINANCE REQUIREMENTS
This packet provides information and forms needed to comply with the requirements of the Ellis Act (Government Code §7060 et seq.) and the City of Berkeley's Ellis Implementation Ordinance (Berkeley Municipal Code (BMC) Chapter 13.77).
The packet contains:
- This informational letter and a table for how and when to use the forms in this packet.
- The forms to be used to comply with the City of Berkeley's Ellis Implementation Ordinance.
- A copy of the Ellis Implementation Ordinance (BMC Chapter 13.77).
The Ellis Implementation Ordinance establishes the process for withdrawing residential rental property from the rental housing market. To comply with the Ordinance, you must meet the following conditions and obligations:
- You must withdraw all accommodations on your property from the rental market. Accommodations are defined as “the residential rental units in any detached physical structure containing four or more residential rental units” or “[w]ith respect to a detached physical structure containing three or fewer residential rental units, the residential rental units in that structure and in any other structure located on the same parcel of land…” (See Govt Code §§ 7060 and 7060.7 and BMC § 13.77.050.A.1.)
- You must pay a fee of $300 for the first two units to be withdrawn from the market and an additional $100 for each additional unit to cover the costs of administering the Ellis Implementation Ordinance. These fees must be paid before the Notice of Intent to Withdraw Accommodations is given to the tenants, otherwise the Notice is invalid. (BMC § 13.77.070.)
- You must give your tenants at least 120 days notice of your intent to withdraw your units from the rental market. The notice period is one year for senior and/or disabled tenants who have lived in a unit for one year or more. (See BMC § 13.77.050.A.8.)
- You must deposit with the Rent Board an initial relocation assistance payment of $8,700 for the household of each accommodation that is withdrawn from the market and an additional $5,000 for any units for which the tenancy began prior to January 1, 1999. You will subsequently be required to deposit an additional $2500 for each tenant household that includes low-income, elderly or disabled tenants or minor children. (BMC § 13.77.055.)
- You must offer to those tenants who expressed an interest, the opportunity to re-establish their tenancy in your property if you elect to re-rent the property within ten years of the date you withdrew the units from the rental housing market. (BMC § 13.77.040.)
- You must notify the City of Berkeley of your intent to re-rent your property.
- Going out of the rental housing business does not confer a right to change the use of your property. (BMC § 13.77.020.B.)
NO VACANCY INCREASE FOR FIVE YEARS
Once a Notice of Intent to Withdraw Accommodations has been filed with the Rent Board, no vacancy rent increase may be taken on the affected rent controlled units during the five year period following the date the notice is filed or the actual date of withdrawal, whichever is later. This prohibition applies even if the Notice of Intent is subsequently rescinded or the withdrawal of the units from the market is never completed. Thus, once a Notice of Intent to Withdraw is filed, the rent on the units covered by the notice may be increased only as authorized by the Rent Board, regardless of how many vacancies occur during the next five years. (BMC §13.77.040.A.)
All households receiving a Notice of Intent to Withdraw Accommodations from Rent or Lease are entitled to a minimum of $8,700 in relocation assistance. Households in units where the tenancy began prior to January 1, 1999, are entitled to an additional $5,000 in relocation assistance. The relocation assistance must be deposited with the Rent Board (checks should be made payable to “City of Berkeley”) when the Notice of Intent to Withdraw Accommodations is filed with the Board and the money will be held in trust for each household until requested by the to be displaced tenants. (BMC § 13.77.055.A.)
Households that have an annual income that is less than 80% of the median annual income for Alameda County, or that include a minor child or a tenant over the age of 60 years or a tenant who is disabled, are entitled to an additional $2500 in relocation assistance from the property owner. To obtain this additional relocation assistance, the qualifying household must submit a written claim of entitlement to the owner and the Rent Board no more than 30 days from the date the Notice of Intent to Withdraw Accommodations is personally delivered or mailed. (BMC §13.77.055.B)
Section 13.77.050.A.1 of the Ordinance requires that the Notice of Intent to Withdraw Accommodations be accompanied by two stamped addressed postcards that the tenant household can complete and return and thereby claim entitlement to relocation assistance. Suggested language for the postcard:
Copy, clip, and affix to the postcard, if desired.
To Whom It Concerns:
My household is entitled to $2500 in additional relocation assistance because:
____ My household’s annual income does not exceed the qualifying limits; or
____ I am over the age of 60.
____ I am disabled.
____ I am the parent of a minor child who lives with me in the unit.
Print Name:__________________ Address:________________________
One of the postcards should be addressed to yourself; the other should be addressed to:
City of Berkeley Rent Stabilization Board
2125 Milvia Street
Berkeley, CA 94704
Upon receipt of a claim for additional relocation assistance, you must, within 10 days of the date the claim is mailed, deposit $2500 with the Rent Board to be held in trust for the household claiming entitlement to the relocation assistance. (BMC § 13.77.055.B.) If you wish to challenge the household’s eligibility for the relocation assistance, you must file a written challenge of the household’s eligibility within 10 days of the date the claim is mailed. (BMC § 13.77.055.B.1.) (Note: Filing a challenge does not stay or excuse the obligation to deposit money into escrow.) If the claim of eligibility is challenged, the deposited money will be held by the Board until the Board receives of an agreement of the parties or a court order stating how the money is to be distributed. (BMC § 13.77.055.B.) If no challenge is filed, the money will be distributed upon receipt of a request from the tenants.
DATE PROPERTY IS WITHDRAWN FROM THE RENTAL MARKET
Generally, a property is legally withdrawn from the rental housing market:
- 120 days after the Notice of Intent to Withdraw Accommodations is filed with or mailed to the Rent Board; AND
- A Certificate and a Memorandum summarizing the Notice to the City of Berkeley of Intent to Withdraw Accommodations are recorded with the Alameda County Recorder’s Office. (BMC § 13.77.050.A.4.)
CONDOMINIUM CONVERSIONS AND THE ELLIS ORDINANCE
Berkeley Municipal Code section 21.28.050.A specifically prohibits the conversion to condominium of dwelling units for the 10-year period immediately following the date of filing of a notice of intent to withdraw accommodations from the rental housing business under the Ellis Act. (Note: There is also a 10-year prohibition on condominium conversion from the date of an owner or relative move-in eviction. (BMC § 21.28.050.B).)
TABLE FOR COMPLIANCE
The attached table may assist you in determining the order in which you should proceed in notifying your tenants and the Rent Board of your intent to withdraw your property from the rental housing market. Generally, there are five steps:
- Pay the administrative fee of $300 for the first two units and $100 for each additional unit;
- Serve the tenants with the Notice of Intent to Withdraw Accommodations, Notice of Termination of Tenancy, and the postcards and forms for asserting entitlement to additional relocation assistance, an extended notice period, or an interest in reoccupying unit;
- Serve Rent Board with Notice to City of Intent to Withdraw Accommodations;
- Deposit relocation assistance with Rent Board as needed; and
- Record Certificate and Memorandum with the County Recorder.
If you have questions concerning these procedures, please contact the Legal Department of the Rent Stabilization Board at 510-981-4930
JAMES J. KELEKIAN