Statutory Framework for Ellis Withdrawals
The Ellis Act grants property owners the right to exit the rental market, but it also imposes strict escrow obligations to protect displaced tenants. California Government Code Section 7060.4 requires that relocation assistance be deposited into a licensed escrow account before the notice of intent to withdraw is served. Failure to comply voids the withdrawal and exposes the owner to civil penalties of up to $25,000 per unit.
A properly administered Ellis Act escrow account demonstrates financial capacity, satisfies municipal auditors, and accelerates the overall timeline for lawful possession.
Mandatory Deposit Timeline
Owners must transmit the full relocation amount to the escrow trustee on the same day the Ellis notice is filed with the local housing department. Personal checks, ACH transfers, and promissory notes are explicitly rejected; only irrevocable wire or cashier’s check is accepted.
The deposit must remain untouched until the city issues a written release, ensuring tenants receive funds immediately upon surrender of keys. Secured Trust Escrow offers same-day wire confirmation and direct electronic filing with both LAHD and HCIDLA to eliminate administrative lag.
Core Document Package
The escrow officer requires the following items before activation: the original Ellis determination letter, the fully executed notice of intent to withdraw, a completed escrow instruction form, and proof of funds in the form of a bank letter or wire reference. All signatures must be notarized if the aggregate deposit exceeds $20,000 per unit. Any discrepancy in tenant names or dollar amounts will trigger an administrative hold that can delay disbursement by 5 to 10 business days.
Bullet Point Summary of Key Requirements
- Deposit full relocation amount on same day as notice filing
- Use only FedWire or cashier’s check; no personal checks accepted
- Submit original determination letter and notarized instruction form
- Maintain funds in segregated, insured trust account until city release
- Forward wire reference number to escrow officer within 2 hours
- Obtain stamped receipt for immediate compliance verification
- Expect same-day confirmation when files are received before 2 pm Pacific
Fee Range and Cost Controls
Ellis Act escrow fees typically range between $300 and $700 per unit, depending on total deposit value and tenant count. There are no post-closing maintenance charges, recording fees, or interest credits, as the account serves a statutory compliance function rather than an investment purpose. Funds remain fully insured and segregated until the city authorizes disbursement, providing complete capital protection for both parties.
Immediate Escrow Setup
Secured Trust Escrow maintains a dedicated Ellis Act desk offering same-day wire confirmation, electronic filing, and real-time status tracking. Upload your determination letter now and receive executable escrow instructions within 30 minutes. For immediate setup and a confidential fee quote, contact our Ellis Act team at 323-919-9894 or submit your documents through our secure portal.
