Compliance Overview for Property Owners
California Civil Code requires landlords to secure tenant relocation funds in a licensed escrow account before the notice of termination is deemed valid. In Los Angeles, both the Housing and Community Investment Department and the Santa Monica Rent Control Board enforce this provision, making escrow placement a mandatory step rather than an optional convenience.
Failure to comply exposes owners to civil penalties, extended vacancy periods, and potential litigation. A properly structured relocation escrow account demonstrates financial capacity, satisfies municipal auditors, and accelerates the overall termination timeline.
Required Documentation
The city will not accept personal checks, promissory notes, or in-house trust receipts. Owners must deliver either a cashier’s check or a same day wire to a state licensed escrow agent, together with the original determination letter, a fully executed instruction form, and a copy of the served notice. All signatures must be notarized if the deposit exceeds $20,000 per unit.
Electronic notarization is now accepted, provided the platform meets California statutory standards. Accurate spelling of each tenant’s legal name and precise dollar amounts are essential; discrepancies trigger administrative holds that can delay disbursement by 5 to 10 business days.
Sequential Opening Procedure
Step one involves obtaining the written relocation calculation from the appropriate housing agency. Step two requires selection of an escrow provider that appears on the city’s current approved vendor list to prevent rejection at intake. Step three entails transmission of the determination letter, the notice of termination, and proof of funds to the escrow officer. Step four is the execution of escrow instructions via DocuSign or similar state approved platform. Step five is the delivery of funds by irrevocable wire or cashier’s check. Upon confirmation, the escrow agent files the receipt directly with the housing department and supplies the owner with a control number for future reference.
Standard Timeline and Fee Structure
Accounts opened before 2 pm Pacific Time are typically active the same business day. Escrow fees generally range between $200 and $600 per unit, depending on aggregate deposit value and tenant count. There are no hidden recording charges, maintenance fees, or interest credits, as relocation escrow is a compliance vehicle rather than an investment product. Funds remain segregated in an insured trust account until the city authorizes release, ensuring full capital protection for both parties.
Frequent Documentation Errors
Presenting a personal check instead of a cashier’s check or wire will result in immediate rejection. Omitting even one middle initial from a tenant’s name can create a mismatch that suspends the entire file.
Using an out of state escrow company not recognized by LAHD will force a restart. And failing to obtain a stamped receipt can leave owners unable to prove compliance during audit. Meticulous review of each line item before submission eliminates these costly delays.
Next Steps for Immediate Opening
Secured Trust Escrow offers same day account activation, after hours wire capability, and direct portal access for real time status updates. Upload your determination letter now and receive executed escrow instructions within one business hour. For a confidential fee quote and opening packet, contact our relocation desk at 323-919-9894 or submit the form on our contact page.
