When you learn that your landlord is selling your apartment building, your future may suddenly feel uncertain. You’re worried that you may have to move out, that you will never find another affordable place or worse, that you’ll end up homeless. In these situations, we often see landlords approach tenants with an offer of a buyout of their tenancy. While a buyout offer from your landlord may seem like your only chance at financial recovery, you are under no obligation to take a deal.
Before making any hasty decisions, remember that you may not have to move out at all. If you are interested in a buyout, be aware that your landlord’s first offer isn’t necessarily the final word.
Rental laws in cities like San Francisco, Berkeley, and Oakland offer many protections for tenants, and you’ll want to familiarize yourself with them before agreeing to a buyout. The tenant rights attorneys at Wolford Wayne LLP are prepared to help you evaluate your options and devise a strategy to ensure you get a fair buyout.
Thanks to rent control and eviction control laws, landlords have limited ways to get tenants to move out without breaking the law. Landlords sometimes offer cash buyouts as a way to free up a rental unit in a rent-controlled building. Landlords who want to sell your building may benefit from selling it without long-term tenants. If your landlord approaches you about a buyout, remain calm and assess your options. As a tenant, you are protected by rental laws, like the rent ordinance in San Francisco, so consider these facts before you start negotiating a buyout:
Every tenant’s situation is unique, and so what makes a buyout offer good or bad depends on you and your needs. Here are a few points to consider if you think your landlord may be offering a bad buyout.
Before presenting you with a buyout offer, your landlord must provide disclosure forms, as well as a list of tenants’ rights organizations, or they are already violating the buyout process. Before you sign and return the form, consider whether you are interested in negotiating a buyout at all. Buyouts are voluntary. You do not have any obligation to engage in buyout negotiations if you don’t want to. Consider the pluses and minuses of a buyout for you and your housemates including: where will you move? What will a new place cost you and how far will that money go? What are the risks if you don’t negotiate a buyout? Consider speaking with a tenant’s rights attorney or nonprofit tenant’s rights counselor before signing anything or speaking with your landlord.
Creating a list of the potential burdens of leaving your residency may help you understand the true cost of a move. For instance, perhaps your commute time will increase if you can’t afford your neighborhood’s market rates, or your child will be forced to change schools. Don’t negotiate until you’ve thoroughly evaluated the pros and cons.
Landlords have a right to sell their rental property or to try and sway you to move out in exchange for payment. For them, it’s a business decision. They stand to make more money if they sell the unit without tenants, and they can charge more rent to a new tenant once you’re gone. While you may have a positive relationship with your landlord (that’s good!) remember they don’t necessarily have your best interests in mind. Be cautious of attempts by your landlord to discuss the buyout in a “casual” way. This often means asking you if they can come over and chat. While you may feel like you owe them a face to face meeting, this is often a ploy to try and get you to agree to a low offer or to say something you may not want to share. Often times landlords have already hired a landlord attorney who has coached them on how to approach this kind of meeting and are hoping that you don’t hire a lawyer of your own.
Even though landlords are bound by strict laws regarding buyouts, some may try to take advantage of unknowing tenants through seemingly attractive deals. Your landlord wants to negotiate a transaction that is to their benefit, and the stakes can be high. To ensure a level playing field hire an attorney that specializes in representing the rights of tenants.
Landlords often attempt to lure tenants into a deal by setting false deadlines to respond. While we cannot recommend that you ignore a deadline, these are often made up for the purpose of getting you to rush your decision rather than think it through. Be sure you feel good about your choice and that you’ve evaluated all your options before you agree to a deal or make an offer of your own.
Respond to each step of the process on your terms by optimizing every opportunity.
Even if you have a positive relationship with your landlord, a buyout negotiation is not something to take lightly. A bad buyout agreement could leave you struggling financially for years. If your landlord wants to talk about a buyout, do not hesitate to review your options with a San Francisco tenant rights lawyer at Wolford Wayne LLP. We can help you determine if a buyout offer is in your best interest and navigate the process with your landlord to ensure you get the deal you deserve.
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