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Negotiating Buyout Agreements

Negotiating Buyout Agreements

Negotiating Buyout Agreements

10Jan

Negotiating Buyout Agreements

California’s affordable housing crisis, combined with the price of real estate in the Bay Area, has left many landlords looking for ways to remove rent-controlled tenants. As San Francisco real estate and rent prices continue to increase, landlords realize they can make more money by buying out their current tenant’s lease and re-renting the property at the market rate. As a result, many tenants are receiving seemingly valuable buyout offers. Accepting these offers, however, isn’t always a positive move for the tenant, and even if the offer is a fair one, it’s important for tenants to understand their rights in the negotiation process.

At Wolford Wayne LLP, we’ve spent our careers helping San Francisco tenants understand their rights, identify bad faith harassment, and negotiate valuable buyout agreements. Here, we share some important tips for tenants on buyout agreements.

Laws Governing Tenant Buyout Negotiations in San Francisco

Many Bay Area cities, including San Francisco and Berkeley, have adopted specific ordinances governing buyout negotiations to ensure tenants are well informed and protect them from accepting offers without considering their future housing needs. For example, the San Francisco Rent Ordinance, Sec. 37.9E requires landlords to notify the rent board before beginning buyout negotiations with rent-controlled tenants. It further requires informing all tenants of the following during the negotiation process:

  • Their right to contact local buyout negotiation lawyers
  • Local housing non-profits and their contact information
  • Certain tenants’ rights and landlord responsibilities
  • The name and contact information of the parties conducting the negotiation on the landlord’s behalf
  • The tenant’s right to refuse to enter into negotiations or sign buyout agreements
  • The tenant’s right to rescind the agreement within 45 days

Failure to follow these specific procedures gives tenants the right to nullify buyout contracts and might even support a claim of harassment against landlords.

Things to Considering when Presented with San Francisco Buyout Offers

While the lump sum presented in a buyout offer may look appealing, it’s critical to consider your long-term housing needs before you accept. Taking a small buyout offer may result in inconvenience and severe financial difficulties. At Wolford Wayne LLP, we encourage our clients to consider the following during buyout negotiations:

  • The net amount of money you will get after factoring in moving expenses, new rent, and taxes
  • How much time you need in order to pack and find a new place
  • Where you plan to move and how much of the money you get will go to new rent
  • The impact of a new commute/school district/etc.
  • Increased cost of living, including parking and higher utilities

Tenants shouldn’t feel pressured or intimidated by a buyout offer. For many tenants, a buyout simply does not make sense given what they will pay in rent for a new place in the area. However, in certain circumstances, such as where a tenant is looking to downsize, is considering buying a home of their own, or is ready to move for other reasons, buyouts can present an opportunity. However, tenants must consider the realistic differences in their current rent and the cost of comparable living conditions in San Francisco and the surrounding Bay Area.

Connect with the Experienced San Francisco Buyout Negotiation Lawyers at Wolford Wayne LLP

If you are a tenant who has been approached by your landlord about a buyout, Wolford Wayne LLP may be able to help. We are dedicated and experienced San Francisco attorneys exclusively representing tenants’ rights, and we never represent landlords. We have advised hundreds of tenants on their rights in these situations. We also represent and advise tenants who are dealing with landlord harassment, like increased hostility after refusing to agree to a buyout. To schedule a buyout agreement consultation with our San Francisco housing lawyers, call (415) 649-6203 or connect with us online.

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For more information or to discuss your legal situation, call us today at (415) 649-6203 for a phone consultation or submit an inquiry below. Please note our firm can only assist tenants residing in San Francisco, Oakland & Berkeley.

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