The Ellis Act in Santa Monica lets a property owner permanently leave the residential rental business, but state law is only the starting point. To pull it off, you file a Notice of Intention with the Santa Monica Rent Control Board, deposit per-unit relocation fees (currently over $19,000 for the smallest units) into escrow, give tenants at least 120 days to move, and accept re-rental restrictions that follow the property for up to ten years. Cut corners and you can face actual damages, exemplary damages, and a court order returning the units to rent control.
What the Law Covers and the All-Units Rule
The Ellis Act sits at California Government Code Sections 7060 through 7060.7. It bars any city or county from forcing a residential landlord to keep renting.1California Legislative Information. California Code 7060 – Residential Real Property Santa Monica cannot block your exit, but it can (and does) impose procedural and financial requirements on the way out.
One point trips up owners early: you cannot pick and choose. The Ellis Act covers an exit from the rental business, so every residential unit in the building goes at once. Santa Monica’s Rent Control Board defines the “accommodations” subject to withdrawal as all rental units within a structure of four or more units, or all units on the same parcel for smaller buildings.2City of Santa Monica. Rent Control Charter Amendment and Regulations – Chapter 16, Withdrawal of Accommodations Ellis-ing one difficult tenant out of a four-unit building while continuing to rent the other three is not an option.
Filing the Withdrawal With the Rent Control Board
Santa Monica’s Chapter 16 regulations set a specific sequence. Miss a step or reverse the order and the whole filing can stall or fail.
Start with two documents. The first is the Notice of Intention to Withdraw Accommodations From Rent or Lease. The second is a Memorandum summarizing the non-confidential parts of that notice, listing all owners, a statement of intent to withdraw all accommodations, and the property addresses. The memorandum leaves out tenant names, rent amounts, and unit counts. Every owner signs it, and every signature is notarized.2City of Santa Monica. Rent Control Charter Amendment and Regulations – Chapter 16, Withdrawal of Accommodations
Then record the memorandum with the Los Angeles County Recorder. That creates a public record on title so any future buyer or lender sees the withdrawal. Next, serve the original Notice of Intention and the recorded memorandum on the Rent Control Board.
Within five days of serving the Board, three more things must happen: give each tenant a Notice to Tenant of Pending Withdrawal, serve each tenant a written termination of tenancy effective as of the withdrawal date, and file a Certification with the Board confirming all tenant notices went out.2City of Santa Monica. Rent Control Charter Amendment and Regulations – Chapter 16, Withdrawal of Accommodations That five-day window is short. Miss it and you may have to restart.
Relocation Fees Every Tenant Gets
Santa Monica Municipal Code Chapter 4.36 requires landlords to pay relocation fees to every tenant displaced by an Ellis Act withdrawal.3City of Santa Monica. City of Santa Monica Code 4.36 – Tenant Relocation Assistance The amounts adjust every July 1 based on the Consumer Price Index. As of July 1, 2025, the standard permanent relocation fees are:
- Bachelor or single unit: $19,950
- One bedroom: $27,500
- Two or more bedrooms: $38,250
Households that include a senior (age 62 or older), a person with a disability, or a minor child receive higher amounts:4City of Santa Monica. Notice of Tenant Relocation Assistance and Statement of Rights for No Fault Termination
- Bachelor or single unit: $20,850
- One bedroom: $29,350
- Two or more bedrooms: $40,750
The bump for qualifying households runs from $900 to $2,500 depending on unit size. Rates effective July 1, 2026 had not been published at the time of writing; expect an upward CPI adjustment.
Escrow Before Any Notice Goes Out
You cannot hand a tenant a check. The full relocation fee has to be deposited into an escrow account before the owner serves any termination notice, the landlord pays all escrow costs, and the escrow instructions must be approved by the city.3City of Santa Monica. City of Santa Monica Code 4.36 – Tenant Relocation Assistance Once a tenant vacates, the landlord has two working days to instruct the escrow holder to release the remaining balance, and the escrow holder has three working days after that to distribute the funds. Missing those deadlines is one of the fastest ways to jeopardize the withdrawal.
The 120-Day Clock, and When It Becomes a Year
The official withdrawal date is 120 days after the Rent Control Board receives the Notice of Intention and the recorded memorandum.5California Legislative Information. California Government Code – Chapter 12.75 For most tenants that 120 days is the full notice period. After it runs, tenants still in place can face unlawful detainer proceedings.
Some tenants get much longer. Under Government Code Section 7060.4, a tenant who is at least 62 years old or who has a disability, and who has lived in the unit for at least one year before the notice was filed, can extend the withdrawal date to a full year from the filing.5California Legislative Information. California Government Code – Chapter 12.75 The tenant has to send written notice to the owner within 60 days of the filing date to claim it. If any qualifying tenant lives in the building, plan for a year, because the extension is a statutory right you cannot refuse.
Throughout the notice period, the owner must keep the property habitable and maintain existing services. Letting repairs slide or shutting off amenities to push tenants out early is not an option.
Re-Rental Restrictions That Follow the Property
Leaving the rental business under the Ellis Act does not reset if you change your mind. State law layers restrictions that get heavier the sooner units come back.
Two Years: The Danger Zone
Re-renting within two years of withdrawal is where the biggest liability sits. Displaced tenants can sue for both actual and exemplary damages, and the city itself can bring a civil action seeking exemplary damages for tenant displacement. Both suits must be filed within three years of the withdrawal date.6California Legislative Information. California Government Code 7060.2 Re-renting this fast invites the inference that the Ellis Act was a tool to clear tenants, not a real exit.
Five Years: The Rent Cap
If any unit returns to the rental market within five years, the rent is capped at what the previous tenant was paying at the time of the withdrawal notice, plus whatever annual adjustments the Rent Control Board would have allowed during the gap.6California Legislative Information. California Government Code 7060.2 Demolish and rebuild on the same parcel and the new units come under rent control based on a fair return on the new construction, even if newly built housing would ordinarily be exempt.
Ten Years: Right of First Refusal
For up to ten years after withdrawal, the owner must offer any re-rented unit to the displaced tenant first. The owner notifies the Rent Control Board of the intention to re-rent, the Board contacts the former tenant, and the tenant has 30 days to accept in writing.6California Legislative Information. California Government Code 7060.2 These restrictions run with the property. Sell during the restricted period and the buyer inherits every obligation.
Fail to offer a re-rented unit to the displaced tenant during the ten-year window and that tenant can sue for punitive damages up to six months’ contract rent. Paying doesn’t satisfy the obligation either. The owner still has to make the offer.6California Legislative Information. California Government Code 7060.2
What Procedural Mistakes Cost
Beyond the re-rental penalties baked into state law, local mistakes carry their own consequences. Underfunding the escrow account, missing the five-day window for tenant notices, or serving incomplete paperwork can each stall or void the withdrawal. Santa Monica’s Rent Control Board tracks Ellis Act filings, and the city has historically been aggressive about enforcing tenant protections. Owners who try to shortcut the process often spend more on litigation than they would have spent on doing it right.
What to Budget For
Relocation fees are the largest line item and they scale fast. A four-unit building of two-bedroom apartments with no qualifying tenants owes at least $153,000 in relocation fees at current rates. Add a senior, disabled tenant, or minor child in any unit and the number climbs.
Beyond that, plan for recording fees at the Los Angeles County Recorder, escrow administration (paid by the landlord), and attorney fees to prepare the notices and work through the Board. Real estate attorneys handling Ellis Act withdrawals in Los Angeles County typically charge between $150 and $500 per hour depending on the building and any tenant disputes. A straightforward four-unit withdrawal with no contested extensions often lands in the low five figures for legal fees.
Then there’s the carrying cost owners tend to forget. Property taxes, insurance, and maintenance obligations run through the entire 120-day or one-year notice period, and the building generates no rental income across that stretch. Factor that into the exit math before you file.