82 Cal.App.5th 842
Cal. Ct. App.2022Background:
- Plaintiffs (owners of a three‑unit San Francisco property) invoked the Ellis Act and served a 120‑day termination notice on 11/13/2019, tendering half of the relocation payments required by the San Francisco Rent Ordinance (SF Admin Code §37.9A).
- Plaintiffs filed a Notice of Intent to Withdraw (NOI) with the Rent Board and served tenants a Notice to Tenant of Filing; tenants claimed disability and accepted supplemental payments; tenants exercised a one‑year extension and remained in possession.
- The termination notice quoted an outdated version of SF Admin Code §37.9(a)(13) and summarized relocation payments by referring to “tenant” amounts on page 5, while attaching the full text of §37.9A as an exhibit.
- Defendants demurred, arguing the notice was fatally defective for quoting a superseded ground and for failing to notify tenants of the full scope of relocation rights under §37.9A(e)(4).
- The trial court sustained the demurrer without leave to amend, ruling the notice failed to provide required relocation‑payment information under §37.9A(e)(3)–(4); plaintiffs appealed.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Preemption: Does the Ellis Act preempt SF §37.9A(e)(4)? | §7060 (Ellis Act) preempts local notice/payment requirements that impede exit. | §37.9A(e)(4) is authorized mitigation under Gov. Code §7060.1(c) and not preempted. | Court: Not preempted; §37.9A(e)(4) is a permissible mitigation measure under the Act. |
| Availability of defense under Gov. Code §7060.6: Can tenants defend UD for noncompliance with §37.9A(e)(4)? | Plaintiffs: §7060.6 defense limited to noncompliance with rules implementing §§7060.2/7060.4. | Defs: §7060.6 permits defense for noncompliance with any statutes/ordinances/regulations adopted to implement the Act, incl. §37.9A(e)(4). | Court: Tenants may assert noncompliance with §37.9A(e)(4) under §7060.6; local notice/payment rules implement the Act. |
| Compliance standard and sufficiency of notice: Must a terminating landlord strictly comply with §37.9A(e)(4), and did plaintiffs’ notice comply? | Plaintiffs: substantial (or mere) compliance should suffice; their notice and attached ordinance gave required info. | Defs: strict compliance is required in unlawful detainer; notice here omitted clear statement that payments are for each "Eligible Tenant" (including occupants regardless of age). | Court: Local ordinance requires full compliance; plaintiffs’ notice was deficient because it failed to clearly notify tenants of the full scope of payment rights under §37.9A(e)(3). |
| Leave to amend to assert ejectment: Could plaintiffs amend to an ejectment claim? | Plaintiffs: should be permitted to amend to seek ejectment. | Defs: failure to comply with §37.9A(e)(4) means possession is not recoverable by summary UD, and plaintiffs gave no facts showing wrongful possession for ejectment. | Court: Denied leave to amend—plaintiffs failed to show an amendment could cure the defect or establish wrongful possession. |
Key Cases Cited
- Drouet v. Superior Court, 31 Cal.4th 583 (Cal. 2003) (describes Ellis Act purpose and local authority to require notices/payments tied to withdrawals)
- Johnson v. City & County of San Francisco, 137 Cal.App.4th 7 (Cal. Ct. App. 2006) (struck local provision requiring landlord to state the amount landlord believes due as preempted by Ellis Act)
- Coyne v. City & County of San Francisco, 9 Cal.App.5th 1215 (Cal. Ct. App. 2017) (upheld local relocation payments as permissible mitigation under §7060.1(c))
- Danger Panda, LLC v. Launiu, 10 Cal.App.5th 502 (Cal. Ct. App. 2017) (interpreted who qualifies as a “tenant” under the rent ordinance for relocation payments)
- City of Santa Monica v. Yarmark, 203 Cal.App.3d 153 (Cal. Ct. App. 1988) (discusses Ellis Act reservations for local control and preemption limits)