Ellis Act Relocation Escrow Rules in Los Angeles
The Ellis Act allows California landlords to exit the rental market, but Los Angeles requires relocation assistance to affected tenants. An escrow account ensures these payments are handled properly and on time.
When a landlord invokes the Ellis Act to withdraw rental units from the market, tenants must receive relocation assistance. In Los Angeles, the amount depends on tenant qualifications and the number of units being withdrawn. Some landlords pay tenants directly. Others use a relocation escrow account to manage the process through a neutral third party. At Secured Trust Escrow, we administer Ellis Act relocation escrows for property owners in Los Angeles, Torrance, and surrounding areas.
Step 1: Notice and Deposit
The landlord serves Ellis Act notices to all tenants and calculates the total relocation assistance required. The landlord then deposits the full amount into a relocation escrow account. The escrow instructions specify the amount per tenant, the eligibility criteria, and the disbursement timeline. This deposit must happen before the notices take effect.
Step 2: Tenant Verification
Tenants submit claims to the escrow company with proof of tenancy and qualification. The escrow officer verifies each claim against the instructions. Qualified tenants include seniors, disabled persons, and families with minor children. Each category may receive a different assistance amount. The escrow company tracks these categories separately.
Step 3: Disbursement
Once verified, the escrow company disburses funds directly to tenants. Payments may cover moving expenses, security deposits, utility connections, and first month’s rent at a new location. The escrow company provides each tenant with a statement of what was paid and when.
Step 4: Final Accounting
After all tenants have been paid or the statutory period has passed, the escrow company closes the account. Any remaining funds return to the landlord with a full accounting. This final statement serves as documentation for the landlord’s records and for any LAHD review.
Important: Ellis Act relocation amounts and requirements can change. Landlords should verify current requirements with the LA Housing Department or their attorney before opening an escrow account.
Ellis Act Relocation Escrow
Secured Trust Escrow administers Ellis Act relocation accounts for landlords throughout Los Angeles and the South Bay.
About the Author: This guide was prepared by the escrow officers at Secured Trust Escrow, a California DFPI-licensed escrow company with experience in business holding escrow, relocation escrow, liquor license transfers, and mergers and acquisitions throughout Los Angeles, Torrance, and surrounding areas.
Legal and Regulatory Disclaimer: This article provides educational information about escrow services. It does not constitute legal, tax, or investment advice. Escrow transactions involve complex legal and financial consequences that vary by transaction type and individual circumstances. Parties should consult with qualified attorneys and tax professionals regarding their particular transactions. California regulations and market conditions change periodically. Last reviewed: July 2026.
