I give almost every client or potential client the same remark about buyouts- "it is a business decision to you, and a life changing decision to a tenant." That is true in the majority of buyouts, especially those with units that have low rent and major upside for landlords. Here are four lenses of the Cash for Keys/ Tenant Buyouts that landlords need to put on to better understand the dynamic. Life Changing Offer Life changing is subjective. Winning a $1B lottery is a drasti

One type of buyout situation that comes across my desk is the “illegal” unit. The garage conversion or guest house that has no permits but was rented out. Many times the illegal status of the unit doesn’t become an issue until an owner is trying to sell or move back to the property. To start, I do not advise anyone to rent out an illegal garage conversion, addition, or guest house. Even if the tenant is a family member, friend, or friend of a friend that is down on their luc

The goal behind a Cash for Keys agreement is to avoid a lot of strings that neither side wants to deal with. However, not always do deals get done, at least not right away. Given time is of essence to most people, Owners often look to the allowable evictions to terminate leases, especially when there are no ‘at-fault’ reasons, meaning the tenant isn’t violating the lease, not causing a nuisance, and is paying their rent. There are two pathways of what we call “No-Fault, Just

This week I thought I would do another FAQ on tenant buyouts from buyers: Q: I'm a potential buyer of a property that has tenants in the units paying below market or in a unit I want to owner occupy. What information should I ask the seller for? When buying a residential property that is tenant occupied you will want to know from the seller if the seller has ever approached the tenants with a buyout offer. If they have you want to know when they gave an offer, what was offere

There is no right or wrong answer. However, you need to know your tenancy. Older or long standing tenants like to get to know management/ owner before being approached with a buyout. I had some units I was working on buying out. The Owners wanted to buyout tenants right away because they wanted to start work on the property. I sent out the offers and did my follow ups. One of the tenants emailed back explaining how she had lived there a long time and did not know who the new

The trend of local jurisdictions adopting rent control and just cause eviction restrictions has brought with it the trend of adopting Cash for Keys/ Tenant Buyout regulations. Not surprising, many of the newer jurisdictions have near identical ordinances, but are slightly different between themselves. The jurisdictions in Los Angeles County that have tenant buyout regulations are: Los Angeles City Los Angeles County (Unincorporated) Bell Gardens Cudahy Maywood Pasadena Culver

In light of the multiple jurisdictions with Just Cause eviction ordinances, property owners are finding it incredibly difficult to even owner occupy tenant occupied single family residences, or otherwise non- rent controlled residential properties. To owner occupy a rental the owner has to consider the following: What are the requirements? To owner occupy the property a lot of jurisdictions require that owners file paperwork, pay the tenant relocation payments in the required

A year after the Los Angeles wildfires displaced many property owners, while some have relocated, others still look to move back into their rentals. In theory, that sounds very doable, however, there are strong tenant protections in most if not all parts of Los Angeles. Here are some frequently asked questions that may assist you in understanding the process to owner occupy. What are restrictions to owner occupy a property? There are several overlapping laws when it comes to

One of the largest areas of buyouts I deal with are owners that want to move in themselves or family into a rental house or apartment unit, but they are uncertain about how long they or their family will be living in the unit. Alternatively, in this category of buyouts I get buyers looking to purchase tenant occupied properties that are either rent controlled, or have some type of eviction restriction, and they want to move family in. Here are a few questions I get asked in t

Q: If I reach a deal with a tenant, they move out and take the money, do I still need to file the buyout agreement with the rental board? If the rental is located in a jurisdiction that has a buyout program that requires filing the buyout agreement with the applicable rental board, then yes, file it. The laws around buyouts often have provisions that if not all requirements are met tenants may be able to seek invalidating the buyout agreement. You don't want to expose yoursel

Q1: I want to offer my tenant a buyout, but I am worried they will say no? Is it worth making an offer? The short answer- it may be worth offering because you don't know what the tenant may say unless you ask. There are a lot of variables that go into presenting an offer to a tenant. Some of them include- your relationship with the tenant (good, bad, so-so, you can't stand each other), past offers to move out, the personal situation of the tenant, the amount of money being of

A question I get asked a lot- what are the main terms of the buyout? There are a few details you want to hash out when doing a deal. The Amount The flagship term- what will the tenant receive in exchange for moving out. There are several factors that go into this- the situation of the tenants, local buyout rules, and landlord budget. There are numerous approaches and tactics to negotiating the amount. There are nuances such as the landlord-tenant dynamic, prior attempts, age,

Recently, I read an article about how difficult it has become for attorneys when clients or pro pers (those who represent themselves without an attorney) start to get answers from AI, such as ChatGPT, that are wrong. This is not entirely surprising to me, but it now has finally made its way to my day to day. When I negotiate tenant buyouts I mainly do so directly with tenants. There are of course deals that are easy, deals that take a lot of back and forth, and deals where we

In my news feed came some quotes from Los Angeles City Controller Kenneth Mejia (link) that denounced Tenant Buyouts as being more or less bad. I disagree with him for several reasons. Buyouts are Voluntary Buyout agreements are voluntarily entered into between the landlord and tenant. A tenant does not have to agree to an offer, as much as a landlord does not have to agree to a sum of money counter offered by the tenant. There is room for negotiations and creative terms. Man

A common question I get asked- who does the buyout negations during a pending sale? The answer- it depends. Prior to listing a property an owner typically has a real estate agent that presents their opinion of value. The opinion of value is based on several factors, including if the property is tenant occupied. For single family residences and smaller multifamily buildings, the more vacancies it has the more valuable it typically is. Vacancies help increase the buyer pool whi

I want to thank those that came out to the AAGLA annual meeting and listened to me speak on buyouts. For those that could not make it I thought I would do an FAQ this week. Question 1: What are the requirements? In several rent controlled cities buyouts commonly require: Tenant receive and sign a disclosure Tenant has a window of time to cancel (30-45 days) The agreement be in the primary language of the tenant The agreement gets filed with the rent control board. Question 2:

Tenant Buyouts aka "Cash for Keys" are common voluntary agreements entered into between landlord and tenants for landlords to get possession of rental units. Simply- the landlord pays the tenant to move out. Buyouts come up often when a landlord is contemplating or has listed a building for sale. I get asked, will buying out my tenants increase the value of my building? My answer- it depends. If you are thinking of listing a property for sale a good first step would be to get