Many owners look into a buyout because they want to sell and expect an empty unit to bring more. Sometimes it does. Often the simpler route is to sell with the tenant in place.

This is general information, not legal advice. Where your case turns on details, talk to a California landlord-tenant attorney.

What is cash for keys, and how does it work in rent-controlled cities?

It is a voluntary deal: the tenant agrees to move out, and the landlord pays money or gives something else of value, such as forgiven rent. San Francisco and Berkeley call it a buyout agreement. Oakland calls it a move-out agreement.

Cities regulate buyouts because they sit outside the eviction rules. San Francisco's ordinance says so in its findings. Buyouts were unregulated, some talks involved pressure, and the law now gives tenants a statement of their rights and time to cancel.

Under the city rules sits the state's Tenant Protection Act of 2019, known as AB 1482. Once a tenant has lived in a unit for a year, most landlords need a just cause to end the tenancy (Civil Code 1946.2). Rent increases over any 12 months are capped at 5% plus the change in the cost of living, or 10%, whichever is lower (Civil Code 1947.12).

What does San Francisco require for a tenant buyout agreement?

Section 37.9E of the Rent Ordinance sets the steps in a fixed order. An agreement that leaves out a required part is not effective, and the tenant can cancel it at any time.

Disclosure first: Before any buyout talk, give each tenant the Rent Board's Pre-Buyout Negotiations Disclosure Form. Keep the signed copy for five years.
Notice to the Rent Board: Before negotiating, file a declaration stating when and how you served the form.
A 30-day wait: The agreement can be signed no sooner than 30 days after talks begin.
Required wording: It is in writing, with set statements in at least 14-point type that each tenant initials, including a bold cancellation notice by the signature line.
45 days to cancel: The tenant can cancel for up to 45 days after everyone signs.
Filing: File the agreement with the Rent Board between day 46 and day 59. Miss day 59 and the tenant can void any clause waiving their rights or releasing claims.

A tenant who moved out has four years to sue if the disclosure or agreement rules were broken. The landlord owes damages, a penalty of up to $500 or 50% of damages, and attorney fees. Missed filings cost up to $100 a day per document, capped at $20,000.

A buyout can also block a later condo conversion. The Subdivision Code bars one if a senior, disabled or catastrophically ill tenant left under a buyout after October 31, 2014. Two or more other tenants leaving under buyouts within ten years of the application also bar it.

A settlement of an eviction case already in court, called an unlawful detainer, is not a buyout under this section.

What rules apply in Oakland, Berkeley and other Bay Area cities?

Oakland and Berkeley have their own rules, with shorter cancellation windows. Elsewhere, start with state law and check the city's rent program.

Oakland's Tenant Move-Out Agreement Ordinance (Municipal Code 8.22.700 and following) covers units under the city's just cause rules, which the city says includes most rentals.

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Before any offer, give the tenant the Notice to Tenants of Move-Out Negotiation Rights and file a Property Owner Certification with the Rent Adjustment Program.
The tenant has 25 days to cancel after both sides sign, or a shorter agreed period of at least 15. They can cancel only before moving out, and every tenant on the agreement has to agree. An agreement that falls short of the ordinance can be rescinded for six months.
You file the signed agreement with the Rent Adjustment Program within 45 days.
After a written refusal, more offers within six months count as harassment.
If the tenant would qualify for relocation payments, an agreement for less is voidable. From July 2026 to June 2027, base amounts run from $8,293.13 for a studio or one-bedroom to $12,599.18 for three or more bedrooms.

Berkeley's Tenant Buyout Ordinance requires the Rent Board's disclosure form before any offer and set cancellation language in the agreement. The tenant has 30 days to cancel, and you file the agreement with the Rent Board no later than 60 days after signing. Miss a step and the tenant can void the agreement at any time.

Where no city rule applies, AB 1482 does, with exceptions. It leaves out tenants of less than a year, housing built in the last 15 years, and many single-family homes and condos whose owner gave the tenant the required written notice. Cities can add protections on top.

How does a buyout compare with an eviction in California?

An eviction needs a just cause the law recognizes, and selling is not on the list. A buyout needs the tenant's agreement, and the tenant can refuse or cancel.

Under AB 1482, a just cause is the tenant's fault, such as unpaid rent, or one of four no-fault reasons. Those are taking the unit off the rental market, an owner or close relative moving in, demolition or a substantial remodel, and a law or government order. No-fault evictions carry relocation money, one month's rent under state law, and San Francisco and Oakland set their own amounts. They carry conditions too: in an owner move-in, the owner or relative must move in within 90 days and stay a year, or the unit must be offered back to the tenant at the same rent.

Who decides: An eviction rests on a just cause and, if the tenant stays, an unlawful detainer lawsuit. A buyout happens only if the tenant agrees.
Cost: No-fault relocation is set by law. A buyout is negotiated.
Time: A San Francisco buyout takes at least 75 days from the first talk to the end of the cancel window. Oakland's window is 25 days, Berkeley's 30.

A buyout can be the right tool when you have a real reason to need the unit empty and the tenant is open to it. If the reason is a sale, read the last section first.

How do Bay Area landlords decide what to offer?

No ordinance sets a price, and San Francisco's findings say amounts vary widely. A few things move the number:

In Oakland, the floor is the relocation amount when the tenant would qualify. Elsewhere, the relocation a no-fault eviction would cost is a fair reference point.
Oakland's notice tells tenants that market rents may be much higher than theirs, so a long-term tenant at a regulated rent gives up the most by leaving.
Oakland notes that waiving a right to return, after repairs or an Ellis Act withdrawal, can make an agreement worth more.
San Francisco tenants are told they can look up other buyouts in their neighborhood, and the city publishes buyout amounts.

If the buyout is meant to set up a sale, compare its cost with the price difference it buys. As an example only, with made-up numbers, a two-unit building might sell for $1,250,000 empty and $1,100,000 occupied. The buyout, legal fees, and the months of mortgage, taxes and insurance all come out of that $150,000. In San Francisco, the tenant can still cancel on day 44.

Can you sell with the tenant in place instead?

Yes. A sale doesn't end a tenancy: the tenant stays, and the buyer becomes the landlord. For an owner whose goal is to sell, this is often the simpler path.

San Francisco spells out the seller's side. Before selling a building with covered units, you give tenants a written notice. It says the sale alone can't get them evicted or asked to move, raise their rent beyond the ordinance, or materially change their agreement. Showings follow the state's entry-notice rule (Civil Code 1954), during normal business hours unless the tenant agrees otherwise.

We handle tenant-occupied properties regularly, including rent-controlled rentals, and buy with the tenants in place, so there is no buyout to negotiate. Our page on selling a house with tenants explains how the lease carries over. We pay fair prices, but not always full market value, and the tenancy is part of the price. We cover the standard closing costs and there is no agent commission on our side. A dedicated transaction coordinator handles the sale through escrow. We can make an offer within 24 hours. We can close in as little as 7 days when the title is clear; 30 to 60 days is typical.

In Hayward, the people living in Nancy's family home had not paid in about five years and asked for $9,000 to move out. There was no eviction. The contract came together within two days of her first call, and the sale closed before the March tax auction. Nancy's story has the rest.

Selling occupied has a cost. Any buyer prices in the tenancy, us included, so an empty unit on the open market may bring more. If the tenant is willing to go and that gap beats the buyout and the wait, a buyout and a listing may leave you more. We're the better fit when the tenant wants to stay or you're done being a landlord. We buy in San Francisco, Oakland, Berkeley and across the Bay Area.

Frequently asked questions

Can a tenant change their mind after signing?

Yes, for a set time. It is up to 45 days after everyone signs in San Francisco and 30 days in Berkeley. In Oakland it is 25 days, or a shorter agreed period of at least 15, if the tenant hasn't moved out. If the agreement misses a required element, the window grows: any time in San Francisco and Berkeley, and six months in Oakland. Don't set a sale date until the window closes.

Is selling the house a just cause to end a tenancy?

No. The Tenant Protection Act lists the just causes, and a sale is not one of them. In San Francisco, a seller of a building with covered units must tell tenants in writing that they can't be evicted or asked to move solely because of the sale. The tenancy carries over to the buyer. Emptying the unit before a sale takes the tenant's agreement, and that agreement is a buyout.

Do I need a lawyer for a buyout?

The ordinances tell the tenant they may consult one, and a mistake in your paperwork can let the tenant undo the deal or sue. In San Francisco a tenant has four years to bring a claim and can recover attorney fees. It makes sense to have a California landlord-tenant attorney draft or review the disclosure and the agreement. A sale with the tenant in place has no buyout agreement to draft.

How is a buyout payment taxed for the tenant?

The buyout ordinances don't settle it, and it depends on the tenant's facts. Oakland's Rent Adjustment Program tells tenants that move-out payments may be subject to federal and state tax. Federal law treats money a tenant receives for cancelling a lease as received in exchange for the lease (26 U.S.C. 1241). The tenant should ask a tax adviser how that applies, and you should ask yours about your side.

What if the tenant refuses every offer?

Then there is no buyout. The tenant has the right to say no. In Oakland the owner can't retaliate, and after a written refusal, more offers within six months count as harassment. You can keep the rental, or use a just cause if one truly applies, with its relocation and conditions. You can also sell with the tenant in place, which doesn't need the tenant's agreement.

Do relocation payments still apply?

They apply to no-fault evictions, not to buyouts as such. State law requires one month's rent for a no-fault eviction, and San Francisco and Oakland set their own amounts. San Francisco's buyout section sets no minimum, though its findings note that some buyouts came in below the relocation benefits. Oakland links the two: if the tenant would qualify for relocation, a move-out agreement for less is voidable.

Talk it over when you're ready

If you'd rather sell the rental as it is, tenants and all, see how we buy houses with tenants in place. You can contact us or call (510) 283-9871 for a no-pressure offer, and take whatever time you need to weigh it against a buyout.

Cash for Keys in California: How Tenant Buyouts Work in San Francisco, Oakland and Beyond