San Francisco’s latest attempt to make landlords pay relocation costs for tenants they evict when the property owners go out of the rental business has hit another judicial roadblock.

The ordinance, scaled down from a previous measure, would require landlords to pay displaced tenants the difference between their current rent and the market rate for a similar unit in the city for two years, up to a maximum of $50,000. Tenants would have to show they were using the funds solely for relocation costs and rents, and landlords who faced hardships could appeal to the city Rent Board to reduce their payments.

But Superior Court Judge Ronald Quidachay said the required payments exceed the “reasonable” relocation assistance authorized by the Ellis Act, the state law that allows landlords to evict all their tenants when they leave the rental business without having to show any other grounds for an eviction....

She said the state law allows local governments to “require mitigation of any adverse impact” on evicted tenants. “We think having to pay dramatically new, higher rents is an adverse impact of the eviction,” Van Aken said.