RENT STABILIZATION BOARD. Honorable Members of the Rent Stabilization Board

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1 Rent Stabilization Board DATE: June 7, 2004 RENT STABILIZATION BOARD TO: FROM: SUBJECT: Honorable Members of the Rent Stabilization Board Eviction Committee Recommendation to adopt a Resolution authorizing the Executive Director to request that the City Council amend the Ellis Act Implementation Ordinance (Berkeley Municipal Code (BCM) Chapter 13.77). Recommendation: Proposal to request the City Council to amend the Ellis Act Implementation Ordinance (Berkeley Municipal Code (BMC) Chapter 13.77) to increase the amount of the relocation assistance provided to qualified displaced tenants and to include the elderly and disabled in the class of tenants qualifying for such assistance. Background and Need for Rent Stabilization Board Action: As explained more fully in the attached memorandum, the amount of the Ellis relocation assistance paid to displaced low-income tenants has not been increased in approximately 18 years. During this time, both rents and moving expenses have increased and inflation has eroded the actual value of the relocation assistance. For this reason, the Eviction Committee is recommending that the Board request the City Council to amend the Ellis Act Implementation Ordinance (BMC Chapter 13.77) to increase the amount of the relocation assistance paid to qualified displaced tenants. Currently, state and federal relocation guidelines provide relocation assistance up to a maximum of $5,250 to compensate for the rent increase a displaced tenant is likely to incur. These guidelines also provide moving expenses ranging from $575 to $2000 depending on unit size. Moving expenses in the Bay Area are high. Therefore, the Committee recommends including moving expenses of $1,750 in the relocation assistance, thereby increasing the total, per unit, Ellis relocation assistance from $4500 to $7000. As originally adopted, the Ellis Act Implementation Ordinance required landlords to provide relocation assistance to all displaced tenants. The scope of this requirement was challenged and, in 1992, the First District Court of Appeal, in Channing Properties v. City of Berkeley Ellis Act Implementation Ordinance 2125 Milvia Street, Berkeley, California TEL: (510) TDD: (510) FAX: (510) rent@ci.berkeley.ca.us INTERNET:

2 June 7, 2004 Page 2 (1992) 11 Cal.App.4th 88 held that the State Legislature, in adopting the Ellis Act (Gov t Code 7060, et seq.), intended to limit relocation assistance to low-income tenants. The decision was based on specific language in subdivisions (c)(1) and (c)(2) of Government Code section The Legislature, however, amended the statute to remove this language as of January 1, The Legislature is presumed aware of prior judicial constructions of a statute. (See People v. Blackburn (1999) 72 Cal.App.4th 1520, 1535.) Therefore, this amendment must be read as removing the restriction limiting relocation assistance to low-income tenants. Accordingly, the Committee recommends that the City Council amend BMC section to also provide relocation assistance to elderly and disabled tenants who are displaced by Ellis Act evictions. Financial Impact: None. Name and Telephone Number of Contact Person(s): Paul Hogarth, Eviction Committee Chairperson Brian Kelly, Staff Attorney Rent Stabilization Board 2125 Milvia, Berkeley, CA (510) Milvia Street, Berkeley, California TEL: (510) TDD: (510) FAX: (510) rent@ci.berkeley.ca.us INTERNET:

3 RESOLUTION NO. 04- REQUESTING THE CITY COUNCIL TO AMEND CHAPTER OF THE BERKELEY MUNICIPAL CODE TO INCREASE THE AMOUNT OF RELOCATION ASSISTANCE PAID TO TENANTS DISPLACED BY ELLIS ACT EVICTIONS FROM $4500 TO $7000 AND TO INCLUDE ELDERLY AND DISABLED TENANTS IN THE CLASS OF TENANTS WHO QUALIFY FOR RELOCATION ASSISTANCE. BE IT RESOLVED by the Rent Stabilization Board of the City of Berkeley as follows: WHEREAS, the amount of relocation assistance paid to Berkeley tenants displaced by Ellis Act (Gov t Code 7060, et seq.) evictions has not increased in 18 years; WHEREAS, the state and federal government pay relocation assistance of $5400 to $7250 to persons displaced by government construction projects; WHEREAS, other municipalities in the state require payment of relocation assistance of up to $15,000 to tenants displaced by Ellis Act evictions; and WHEREAS, the State Legislature amended the Ellis Act to remove language limiting payment of relocation assistance to low income tenants; NOW, THEREFORE BE IT RESOLVED, that the Rent Stabilization Board hereby requests the Berkeley City Council to amend Chapter of the Berkeley Municipal Code (the Ellis Act Implementation Ordinance) to increase the relocation assistance paid to qualified tenants displaced by Ellis Act evictions from $4500 to $7000 and to include elderly and disabled tenants in the class of tenants qualified to receive relocation assistance. Dated: June 7, 2004 Adopted by the Rent Stabilization Board by the following vote: Yes: No: Abstain: Chair, Rent Stabilization Board Attest: Acting Executive Director

4 Section Financial mitigation of adverse impact on displaced persons. A. The low-income, elderly or disabled tenants of any residential rental unit who are required to move as a result of the owner's withdrawal of the accommodation from rent or lease shall be entitled to a relocation payment in the sum of $4,500 7,000 from the owner. The payment shall be divided equally among all low-income, elderly or disabled tenants occupying the rental unit at the time of service on the tenant of the notice of intent to withdraw the unit from rent or lease. Only those persons who have a written or oral agreement with the owner for possession of the rental unit or who have paid rent to the owner shall be deemed low-income tenants for purposes of this Section are lawful occupants of a rental unit qualify for relocation assistance. B. In order to claim entitlement to relocation assistance under this chapter, a tenant must mail the postcards provided under Section A.1 within 30 days of the date the notice required by that section is mailed. The owner shall deposit the full relocation payment in escrow in trust for any tenants who claim low-income status to qualify for relocation assistance within ten days after such postcard is mailed. Thereafter, the City or its designated agent shall distribute amounts held in escrow as follows: 1. If no written challenge is made to the tenant's claim of low-income status eligibility for relocation assistance within ten days after the postcard provided under Section A.1 is mailed, the City shall release the relocation assistance to the tenant. 2. If the City receives conflicting information or assertions which indicate that there is a dispute or uncertainty concerning the tenant's qualification or status as "low-income," for relocation assistance, the City shall continue to retain the disputed relocation assistance funds in escrow. The City then shall release the relocation assistance funds to either the tenant or the owner upon receipt of either a written agreement by both the owner and the affected tenant or an order of a court of competent jurisdiction. C. The owner may rescind the notice of intent to withdraw the accommodation from rent or lease and the notice of termination of tenancy prior to any release of relocation payment to the low-income tenants by serving written notice stating such rescission on the tenants. In such instance, the relocation payment shall be released to the owner. Subsequent to the release of any relocation payment to the low-income qualifying tenants, the owner may rescind the notice of intent to withdraw the accommodation from rent or lease and the notice of termination of tenancy only upon the written agreement of the tenants to remain in possession of the rental unit. If the low-income tenants remain in possession of the rental units after service of an owner's written notice of rescission of the eviction, the low-income tenants shall provide an accounting to the owner of the amount of the relocation payment expended for moving costs, return to the

5 owner that portion of the relocation payment not expended for moving costs, and assign to the owner all rights to recover the amount of relocation payment paid to third parties. E. Failure of the owner to make any payment specified herein shall be a defense to any action to recover possession of a rental unit based upon the owner's intent to withdraw the accommodation from rent or lease. In addition, if the low-income tenants of a rental unit who qualify for relocation assistance have vacated the unit as a result of a notice of intent to withdraw the accommodation from rent or lease, and the owner fails to make any payment specified herein, the owner shall be liable to the low-income tenants for three times the amount of the payment as well as reasonable attorney fees. (Ord NS 1 (part), 2003: Ord NS 2, 2001: Ord NS 1 (part), 1994: Ord NS 1 (part), 1993: Ord NS 1 (part), 1986)