The impact of Covid-19 has drastically altered the rental landscape. Between the shelter in place orders in effect, the many Bay Area residents fleeing the area because of the availability of remote work, and the moratoriums putting a temporary halt to most evictions, vacancy rates have increased dramatically. However, with some landlords looking to sell their properties or trying to entice tenants to vacate while rents are low, landlords continue to pursue buyouts with willing tenants.
Because most tenants now have some form of eviction protection, landlords often have limited ways to get a tenant to move out. Buying out a tenant can allow a landlord to use a property without the restrictions that an Ellis Act or Owner Move-In Eviction can have. While Ellis and Owner Move In evictions require landlords to follow certain requirements and pay tenants a set amount of money there are no such restrictions for a buyout. After a buyout a landlord can re-rent a unit to a new tenant without any restriction on rent and have more flexibility in how the unit is used. This makes tenant buyouts very attractive for landlords. To evict a tenant in San Francisco a landlord has to go through a legal process and have a "just cause" to evict.
For landlords buyouts are a chance to get tenants out of rent and eviction-controlled units. This can make a property more desirable for a prospective buyer (particularly in situations where a buyer is likely to purchase the property to live in themselves). Once a tenant is out a landlord can also re-rent that unit at market rent. While rents are down overall, depending on how long a tenant has lived in a unit market rent may still be more than the tenant is paying. Additionally, many landlords are now seizing on the current exodus from the Bay Area to approach long term tenants to see if they can get them out for cheap with the thought that rents will go back up when the city re-opens.
Getting a lump sum of money may be tempting to take, especially during the pandemic. However, your tenancy is a finite resource and you should be cautious about accepting a buyout if you want to stay in the Bay Area. Even with rents dropping rent in the Bay Area remains among the highest in the country and buyout funds will only go so far, especially if you plan to stay in the Bay.
Deciding on whether to explore a buyout is not to be taken lightly. Before starting negotiations contact an experienced tenants' rights attorney to make sure you have your bases covered.
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