When considering the purchase of a house through an LLC and the potential eviction of a tenant, it's important to understand the legal framework that governs these actions. The **Ellis Act** is a California state law that allows landlords to evict residential tenants if they intend to "go out of business" and remove all rental units from the market¹². It requires landlords to provide tenants with a 120-day notice, or a one-year notice for tenants who are disabled or over 62 years of age¹.
However, if you're planning to use an LLC to own property and potentially evict a tenant, you should be aware that as an individual, you cannot represent your LLC in court during the eviction process. You would need to hire a lawyer to represent the LLC⁵. This is because the LLC is considered a separate legal entity from yourself.
It's also crucial to note that the Ellis Act has specific requirements and restrictions, and it can only be used under certain conditions. For example, if a landlord goes back into the rental business, there are limitations on when they can re-rent the units¹.
Given the complexity of these laws and the potential for significant legal and financial implications, it's highly recommended to consult with a real estate attorney before making any decisions. They can provide guidance tailored to your specific situation and help ensure that any actions you take are in compliance with state and local laws. Remember, laws can vary greatly by location, and what applies in California may not apply elsewhere.
Source: Conversation with Bing, 3/12/2024
(1) What Is the California Ellis Act? | LegalMatch. https://www.legalmatch.com/law-library/article/california-ellis-act-evictions.html.
(2) Ellis Act: State Law Restricting Change in Use of Rental Property. https://www.stimmel-law.com/en/articles/ellis-act-state-law-restricting-change-use-rental-property.
(3) Are Your Properties In An LLC? Evicting A Tenant? Read This First. https://smarterlandlording.com/are-your-properties-in-an-llc-evicting-a-tenant-read-this-first/.
(4) Confirming A Defense To An Ellis Act Eviction. https://www.reubenlaw.com/ellis-act-eviction/.
(5) Ellis Act Evictions – San Francisco Tenants Union. https://sftu.org/ellis/.
(6) LLC for Rental Property: All Benefits, Drawbacks & Alternatives. https://ipropertymanagement.com/guides/llc-for-rental-property.
(7) The Commercial Eviction Process - Rocket Lawyer. https://www.rocketlawyer.com/real-estate/landlords/non-residential-or-commercial-property/legal-guide/the-commercial-eviction-process.
(8) Can Someone Other Than Landlord Begin Eviction Process?. https://www.realestatelawyers.com/resources/real-estate/landlord-tenant-law/can-someone-other-than-landlord-begin-eviction-proces.
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