EMBASSY LLC v. City of Santa Monica

This case arises under the Ellis Act, Government Code section 7060 et seq. The Ellis Act gives landlords “the unfettered right,” as outlined in the statute, to remove their residential units from the rental market (City of Santa Monica v. Yarmark (1988) 203 Cal.App.3d 153, 165 [ 249 Cal.Rptr. 732 ]) and means that cities cannot prevent residential landlords from going out of the landlord business (§ 7060.7).

In this case, a contract between appellants Embassy LLC and PRG Embassy Properties, L.P., and respondents City of Santa Monica and its rent control board (collectively, the City) included appellants’ waiver of their Ellis Act rights as to 19 tenant units in their apartment hotel.

Appellants contend, inter alia, that the Ellis Act prohibits the City from enforcing that waiver. We agree, finding that with section 7060.1, the Ellis Act prohibits public entities from enforcing contractual Ellis Act waivers in all circumstances except those specified in the statute. We further find the City was not entitled to prevail on demurrer on either of its alternate grounds of estoppel and statute of limitations.

Facts

Appellants own the Embassy Hotel Apartments (the Embassy) in…