AGENDA REPORT
Meeting Date: January 24, 2023
Item Number:
To: Honorable Mayor & City Council
From: Timothea Tway, AICP, Director of Community Development Helen Morales, DPA, Deputy Director of Rent Stabilization Subject: REQUEST BY COUNCILMEMBER MIRISCH TO CONSIDER
ADOPTING AN ORDINANCE TO PROHIBIT LANDLORDS FROM
BRINGING AN ACTION TO RECOVER POSSESSION OF AN
APARTMENT UNIT FOR DEMOLITION AND CONDOMINIUM
CONVERSIONS AS PROVIDED FOR IN THE BEVERLY HILLS
MUNICIPAL CODE
Attachments: 1. BHMC 4-5-511
2. BHMC 4-6-6 (J)
3. BHMC 4-5-513
4. BHMC 4-6-6 (L)
RECOMMENDATION
At the request of Councilmember Mirisch, this report provides information regarding the provisions of the Rent Stabilization Ordinance (RSO) that allow an owner to recover possession of an apartment unit, through eviction, for demolition and/or condominium conversion as provided for in the Beverly Hills Municipal Code (BHMC) Sections 4-5-511 (Attachment 1) and 4-6-6 (J) (Attachment 2). Staff recommends the City Council review the RSO provisions that allow a landlord to evict a tenant for demolition and/or condominium conversion and advise staff regarding the elimination of these provisions.
INTRODUCTION
PROCEDURAL HISTORY
On October 18, 2018, the City Council adopted an Urgency Ordinance that removed the No-Cause eviction provisions from Title 4, Chapter 6 of the Beverly Hills Municipal Code.
As part of those revisions, permissible grounds for evicting tenants, including for demolition and/or condominium conversion that already were present in Chapter 5, were adopted for Chapter 6.
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Meeting Date: January 24, 2023
DISCUSSION
BHMC Sections 4-5-511 and 4-6-6 (J) allow a landlord to bring an action to recover possession of an apartment unit if the landlord seeks in good faith to recover possession to demolish, move the building, or convert apartment units into condominiums, stock cooperatives, or community apartments so long as the landlord meets certain requirements. These requirements include, but are not limited to, proper noticing and payment of relocation fees to tenants; the filing, approval, and issuance of necessary applications for the proposed project or development including but not limited to, demolition permits, moving permits or tentative maps; and notice to the RSO office that applications to convert apartment units to condominiums or to move or to demolish the building have been filed with other city departments. To date, evictions for demolition and condominium conversions have not been common.
In addition to the provisions described above, The Ellis Act (California Government Code Chapter 12.75), allows owners to recover possession of an apartment unit for withdrawal of all apartment units in a residential building or structure on a parcel of land from the rental market, if certain conditions and requirements are met. The Ellis Act is a 1985 California state law that allows landlords to evict residential tenants to “go out of the rental business” and to permanently remove the units from the rental market despite desires by local governments to compel them to continue providing rental housing.
The City has codified the Ellis Act in the Beverly Hills Municipal Code (BHMC) §§4-5-513 and 4-6-6 L (Attachments 3 and 4 respectively) as withdrawal of residential rental structure from the rental market. The City has established required forms and procedures to implement these sections.
The major differences between eviction for demolition or condominium conversions and the eviction under the Ellis Act have to do with the notice period, the provisions and the right to return to the unit and with regards to liability in a civil action. Eviction for demolition or condominium conversion provides a tenant with not less than 90-day notice that such tenancy shall terminate, while the Ellis Act and withdrawal of residential rental structure from the rental market provides not less than a 120-day notice, or one year if at least one tenant at the property is either disabled or 62 years of age or older, from the date the landlord intends to withdraw the apartment units from the rental market.
The provisions under eviction for demolition and/or condominium conversion in the BHMC do not have requirements that, if a unit is re-rented, require a landlord to re-offer the unit to the displaced tenant. The Ellis Act and withdrawal of the residential rental structure from the rental market both allow residents to return to the unit under the following conditions:
If the withdrawn unit is re-rented within two (2) years of the effective date of the withdrawal, a tenant who has provided an owner with a first right of refusal, has the right to accept an offer to re-rent the unit at the same rent levels plus any allowable rent increases;
If the withdrawn unit is re-rented within five (5) years after the Notice of Intent to Withdraw the unit is filed with the City, or within five (5) years after the effective date of the withdrawal of the apartment unit, whichever is later, the landlord is Meeting Date: January 24, 2023
required to offer the unit to the displaced tenants at the same rent level as the date of the withdrawal, plus allowed annual rent increases. If the withdrawn unit is re-rented within ten (10) years from the effective date of the removal, the landlord shall provide those tenants who provided notice of interest in re-renting the first right of refusal to re-rent the unit (rent is not restricted and can be market rate).
With regard to civil actions, the Ellis Act and withdrawal of the residential rental structure from the rental market both provide the tenant with remedies in a civil action where eviction for demolition or condominium conversions do not. The Ellis Act and withdrawal of the residential rental structure from the rental market both provide the following:
The owner can be liable in a civil action if commenced within three (3) years of displacement; and
The owner can be liable to the City for exemplary (punitive) if commenced within three (3) years for displacement of tenants or leases.
If the City Council decides to eliminate the provisions that allow an owner to recover possession of an apartment unit, through eviction, for demolition and/or condominium conversion (BHMC Sections 4-5-511 and 4-6-6 [J]), the owners will continue to have an option to evict tenants by withdrawing a residential rental structure from the rental market under the Ellis Act; however, this would effectively force all new developments to be condominiums, rather than apartments, so as to avoid any penalties under the Ellis Act for re-entering the rental business.
FISCAL IMPACT
Staff does not anticipate any fiscal impact pursuant to the City Council’s decision on this matter.
Timothea Tway
Director of Community Development
Approved By
Attachment 1- BHMC 4-5-511
Attachment 2- BHMC 4-6-6 (J)
J. Demolition Or Condominium Conversions: A landlord may bring an action to recover possession of an apartment unit if the landlord seeks in good faith to recover possession so as to demolish or move the building or to convert apartment units into condominiums, stock cooperatives, or community apartments provided there is compliance with all of the following conditions:
1. The landlord has given the tenant not less than ninety (90) days' written notice, which has been approved by the City's rent stabilization program, that such tenancy shall terminate on a date after October 18, 2018. The notice shall state the specific reason for giving such notice and shall be deemed to include a representation and agreement by the landlord that the recovery of possession of the apartment unit is solely for a reason within the scope of this section and for no other reason. If payment of the relocation fees required by section 4-6-9 of this chapter does not accompany such notice, such notice shall also specify the amount of the relocation fees so required and that the tenant may collect such fees at the time the tenant vacates the unit. Such notice shall not be required if:
a. The demolition of the building has been mandated by law to be performed at an earlier date; or
b. Such notice has been given to a tenant who has vacated the apartment unit, the apartment unit has been re-rented to a new tenant, and the new tenant has been advised by the landlord in writing that the notice of termination of tenancy had been given to the prior tenant.
This exemption shall apply only if a copy of the written notice provided to such new tenant is filed with the City's rent stabilization program within one week after such new tenant begins the occupancy of the apartment unit; or
c. A prior written notice which specified less than one year's notice has been given, and the tenant has been notified in writing, within thirty (30) days after October 18, 2018, that prior written notice shall be considered an effective one year notice under this section.
2. The notice required by subsection J1 of this section shall not be given or served until such time as the landlord has:
a. Filed all necessary applications for the proposed project or development including, but not limited to, application for a demolition permit, moving permit or tentative map and paid all of the fees required by the City in connection with such applications; b. Notified the City's rent stabilization program that an application to convert apartment units to condominiums or to move or demolish the building has been filed with any other department of the City so that notice of such filing may be given to the tenants at the property; and
c. That all permits or approvals necessary to commence demolition, removal or conversion have been issued.
3. No notice of tenancy termination given pursuant to this section after October 18, 2018, shall be effective unless all the applicable provisions of this chapter have been complied with, and a copy of such notice has been placed on file with the City's rent stabilization program prior to such notice being served on the tenant. A minimum fee of one hundred dollars ($100.00) for each building for which notices of tenancy termination are to be filed with the City's rent stabilization program shall be paid to the City for processing the notices prior to the filing of a notice with the rent stabilization program. Where there are more than ten (10) apartment units in a building which are subject to this provision of this chapter, and for which notices of tenancy termination have been given, an additional fee of ten dollars ($10.00) shall be paid to the City for each unit in excess of ten (10) units for which a notice of tenancy termination is given.
4. A relocation fee shall have been paid or deposited into escrow in accordance with the provisions of section 4-6-9 of this chapter. If an apartment unit vacated pursuant to this section has been re-rented, the new tenant shall not be entitled to any relocation fee or other relocation benefit if he or she received the notices required by subsections J1b and J5 of this section.
5. Any apartment unit vacated pursuant to this section, if re- rented, shall remain subject to the provisions of this chapter, and it shall be the responsibility of the landlord to notify any new tenant in writing of the controlled rents and the duration of the notice of termination. A copy of such notice shall be filed with the rent stabilization program within one week after the new tenant begins occupancy of the apartment unit.
6. No writ or judgment restoring possession to the landlord shall be issued or entered unless and until the complaint for such writ or judgment filed by the landlord contains the landlord's declaration under penalty of perjury of the giving of notice to the tenant as required by this section, the expiration of any required notice period, the payment or deposit into escrow of the relocation fee specified in section 4-6-9 of this chapter, and that demolition or moving or the work of conversion into condominiums will commence within sixty (60) days after the filing of such complaint.
7. The provisions of this section shall not apply to a building manager who is entitled to the occupancy of an apartment unit solely because of his or her position as building manager.
Attachment 3- BHMC 4-5-513
Attachment 4- BHMC 4-6-6 (L)
L. Withdrawal Of Residential Rental Structure From The Rental Market: A landlord may bring an action to recover possession of an apartment unit if the landlord intends to withdraw all apartment units in a building or structure on a parcel of land from the rental market, subject to the following conditions and requirements:
1. This section shall only apply to and shall only be exercised for the concurrent withdrawal of all apartment units in all buildings or structures on a parcel of land from the rental market, except where there is more than one building on a parcel and all buildings contain four (4) or more apartment units, in which case the landlord may withdraw all of the units in one or more of the buildings.
2. Not less than one hundred twenty (120) days from the date the landlord intends to withdraw the apartment units in a building or structure from the rental market, the landlord shall:
a. Provide written notice under penalty of perjury to the City's rent stabilization program of such intent, which notice shall contain the following information: address and legal description of the subject property, number of rental units being removed, the names of all tenants residing in the units being removed, the year the tenant(s) moved into the unit, the base rent for the unit and the current lawful rent applicable to each such unit. b. Record with the Los Angeles County Registrar-Recorder a written notice prepared by and containing such information as is prescribed by the City summarizing the landlord's notice of intent and certifying that evictions have been commenced or will commence in accordance with applicable law.
c. Provide to the City's rent stabilization program copies of the notice recorded with the County and the notice(s) which were provided to the affected tenants. d. If the tenant or lessee is at least sixty two (62) years of age or is disabled, and has lived in his or her apartment unit for at least one year prior to the date of delivery to the City of the notice required by subsection L2a of this section, then the date of withdrawal of that apartment unit shall be extended to one year from the date of delivery of the notice to the City, provided that the tenant or lessee has given the landlord written notice of his or her entitlement to the extension within sixty (60) days of delivery to the public entity of the notice of intent to withdraw the apartment unit from the rental market. In this situation, the following provisions shall apply:
(1) The tenancy shall be continued on the same terms and conditions as existed on the date of delivery to the City of the notice of intent to withdraw, subject to any adjustments otherwise available under this title;
(2) No party shall be relieved of the duty to perform any obligation under the lease or rental agreement;
(3) The landlord may elect to extend the date of withdrawal on any other accommodation within the same building up to one year after the date of delivery to the City of the notice of intent to withdraw, subject to subsections L2d(1) and L2d(2) of this section; (4) Within thirty (30) days of the notification by the tenant or lessee to the landlord of his or her entitlement to an extension, the landlord shall give written notice to the City's rent stabilization program of the claim that the tenant or lessee is entitled to stay in his or her apartment unit for one year after the date of delivery to the City of the notice of intent to withdraw;
(5) Within ninety (90) days of the date of delivery to the City of the notice of intent to withdraw, the landlord shall give written notice to the City's rent stabilization program and the affected tenant(s) or lessee(s) of the landlord's election to extend the date of withdrawal and the new date of withdrawal under subsection L2d(3) of this section.
3. The landlord shall provide written notice of termination of tenancy to all affected tenants at least thirty (30) days prior to the service of and recordation of the notices in subsection L2 of this section which has been approved by the City's rent stabilization program and filed therewith and which notice shall contain the following information:
a. That the landlord is evicting the tenant pursuant to this section and will provide the City with written notice required in subsection L2 of this section; b. A summary of the specific information to be provided to the City in that notice regarding the tenant's unit;
c. That within thirty (30) days of receipt of notice to terminate, the tenant may notify the landlord in writing that the tenant would be interested in re-renting the unit if it is reoffered for rent at a future time and advising the tenant to notify the landlord and rent stabilization program of all future address changes;
d. A description of the tenant's rights as set forth in subsections L5, L6 and L7 of this section;
e. That the landlord will provide a relocation fee in accordance with the provisions of section 4-6-9 of this chapter and that such fee may not be waived by the tenant, except as specifically provided in subsection 4-6-9G of this chapter; and f. That if the tenant or lessee is at least sixty two (62) years of age or is disabled, and has lived in his or her apartment unit for at least one year prior to the date of delivery to the City of the notice required by subsection L2a of this section, then the tenancy shall be extended to one year after the delivery of the notice to the City, provided that the tenant gives written notice of his or her entitlement to the extension to the landlord within sixty (60) days of the date of delivery to the City of the notice of intent to withdraw. The notice shall further state that if these circumstances exist, the extended tenancy shall be continued on the same terms and conditions that existed on the date of delivery of the notice of withdrawal to the City, subject to any rent increases that are allowed by this chapter, and that no party shall be relieved of the duty to perform any obligation under the lease or rental agreement during the extended tenancy.
4. At the time when the tenant(s) vacate the unit, the landlord shall pay a relocation fee in accordance with the provisions of section 4-6-9 of this chapter.
5. In the event the withdrawn units are reoffered for rent by the landlord within two (2) years from the effective date of withdrawal, the landlord shall:
a. Provide written notice of such action to the City's rent stabilization program not less than thirty (30) days prior to re- renting the units;
b. Offer the units at the same rent level as of the date of withdrawal plus any annual rent increases permitted by this chapter that would have applied had the units not been withdrawn; c. Provide those tenants who provided a notice of interest in re- renting pursuant to subsection L3c of this section the right of first refusal to re-rent the unit by certified or registered mail, postage prepaid, to the last address provided by the tenant, in which case the tenant shall have no less than thirty (30) days within which to accept the offer, by personal service or certified or registered mail. Copies of these notices and the mail receipts shall be filed with the City's rent stabilization program within one week of mailing; d. Be liable in a civil action if commenced within three (3) years of displacement to any tenant evicted due to withdrawal of a unit pursuant to this section for actual damages which were the proximate result of the displacement, in accordance with the principles enunciated in sections 7262 and 7264 of the California Government Code, and punitive damages; e. Be liable in a civil action if commenced within three (3) years of displacement to the City for exemplary damages for displacement of tenants or lessees.
6. In the event the withdrawn units are reoffered for rent by the landlord within five (5) years after any notice of intent to withdraw the apartment unit is filed with the City, or within five (5) years after the effective date of the withdrawal of the apartment unit, whichever is later, the landlord shall provide not less than thirty (30) days' prior written notice of such action to the City's rent stabilization program prior to re- renting the units and shall offer the units at the same rent level as of the date of withdrawal, plus annual rent increases permitted by this chapter that would have applied had the units not been withdrawn.
7. Moreover, if the units are reoffered for rent within ten (10) years from the effective date of removal, the landlord shall provide those tenants who provided notice of interest in re- renting pursuant to subsection L3c of this section the right of first refusal to re-rent the unit, by certified or registered mail, postage prepaid, to the last address provided by the tenant, in which case the tenant shall have no less than thirty (30) days within which to accept the offer by personal service or certified or registered mail. Copies of these notices and the mail receipts shall be filed with the City's rent stabilization program within one week of mailing. Failure of the landlord to provide the tenant with this right of first refusal shall render the landlord liable in a civil action to the tenant in punitive damages in an amount not to exceed six (6) months' rent.
8. This section shall in no respect relieve a landlord from complying with the requirements of any applicable State law or of any lease or rental agreement.
9. The remedies provided for in this section shall not be exclusive and shall not preclude a tenant from pursuing any alternative remedy available under law. Failure by any landlord to comply with the requirements of this section shall constitute a defense in any unlawful detainer action brought to evict a tenant under this section.
10. For the purpose of this section, the term "landlord" shall be interpreted to include any and all successors in interest of any landlord, and the term "disabled" shall mean a person with a disability, as defined in section 12955.3 of the California Government Code.
11. The notice to the City provided for in this section shall be accompanied by a processing fee in an amount determined by resolution of the City Council.
12. This section is intended to implement the requirements of sections 7060 through 7060.7 of the California Government Code, and shall be interpreted so as to provide the City with the broadest range of authority permitted under these provisions and to intrude the least into the City's authority in all other applications of its power.
13. This section shall apply to any apartment units that are being removed from the rental market, if the notice of termination of tenancy required by State law or by a lease agreement has not been given at the time of adoption hereof or if such notice has been given, the notice period has not expired at the time of adoption hereof.