What If My Landlord Offers Me Money To Move Out?

by Andrea Cavanaugh

Declan was fixing lunch inside his Santa Monica apartment a few years ago when he heard an unexpected knock. He opened the door and saw an unfamiliar man holding a sheaf of paperwork.

“Hi, I represent the new owners of your building,” the man said. “I’m here to offer you $5,000 to move out. But the offer is only good until tomorrow. And you’ll have to leave in three weeks.”
Declan didn’t need to think long before accepting the offer – that $5,000 would come in handy. He knew the $575 monthly rent he paid on his rent-controlled apartment was way below market rate, but he didn’t realize that it would be almost impossible to find another affordable apartment anywhere near Santa Monica.

By the time Declan realized how much trouble he was in, that $5,000 was gone, eaten up by bills and car repairs.

A spate of buyout offers at Declan’s building and other addresses, fueled by a red-hot real-estate market, prompted the Santa Monica City Council to pass new regulations in 2015. The new rules require owners to:
Before any buyout offer, give tenants a form provided by the Rent Control Board, advising them of their rights:
they don’t have to accept a buyout;
they can change their minds within 30 days; and
they can consult with an attorney and the Rent Control Board before accepting;
Make all buyout agreements in writing;
File all buyout agreements with the Rent Control Board; and
Retain for five years copies of disclosures signed by tenants, along with the dates the disclosures were given to tenants.

Tenants sometimes accept buyouts because they believe they will have to leave anyway, or because owners threaten to “Ellis” the building if tenants don’t accept the offers. However, all tenants in multi-unit residential buildings in Santa Monica have just-cause eviction protection. This means they can only be evicted for a few specific reasons (such as failing to pay rent).

And while it’s true that a landlord can invoke the Ellis Act to get tenants out, doing so requires that the owner remove all units from the rental market, for five years, and pay tenants a relocation fee that currently ranges from $9,500 to $22,750 (the amount increases every July 1, and you can find the current amounts at our website, smconsumer.org).
Tenants considering buyout offers should check and see what other tenants have been paid in similar units. The Rent Control Board keeps agreements on file.

It also pays to compare any buyout offer you receive to these relocation amounts, because some landlords, like Declan’s, have been known to offer much less. Additionally, when landlords invoke the Ellis Act, tenants have between four and 12 months to move out. Displaced tenants also receive priority eligibility for housing assistance such as Section 8 vouchers.

Pressuring tenants to accept buyouts can be a problem, especially if landlords use other forms of harassment to try to get tenants to move out.

If a landlord persists in extending buyout offers after you have clearly refused, or otherwise makes unlawful efforts to get you out, you can contact the Consumer Protection Division at 310-458-8336.