Tenant buyout amounts in San Francisco are on the decline

Whenever a tenant agrees to voluntarily vacate the unit in exchange for some sort of compensation, it becomes public record information, assuming that in compliance with the law, the San Francisco Rent Board is privy to these discussions between landlords and tenants and this body is aware of the outcome of consummated deals.

We often do not see eye-to-eye with tenant advocates, but we know of many tenants and their attorneys who are not happy that these private agreements are published for the rest of the world to see.

As reported by SocketSite, there were 260 legally recorded buyout agreements brokered in 2023, as opposed to 389 in 2022 and 391 inked in 2021.

One outgoing tenant in the Inner Richmond had the largest payday of $204,000 in a quid pro quo.

$53,828 was the average payout in 2022, but it slipped to $43,124 last year. The Mission saw a steep decline of 49 percent. Buyouts had the most activity in the Sunset, with Ingleside, Haight-Ashbury, Inner Richmond, and Parkside not far behind.

 

Our takeaways

After the pandemic ended and the eviction moratorium expired, it’s of little surprise that landlords reverted to the traditional way of transitioning tenants out, which is an unlawful detainer (eviction) action.

There is less need today to shell out an abundance of money to effectuate a vacancy because we have the courts to air out disputes. Although the numbers off the press seem to suggest that payouts are on the decline, we can’t read too much into this. It’s always on a case-by-case basis.

Our office has negotiated buyouts as low as a rent waiver and/or a return of the security deposit, and as high as six figures. It depends on the economics of the dispute, meaning the upside potential of having a vacant unit and avoiding the costs of litigation.

Bornstein Law is always available to engage in a discussion on how rental property owners can optimize their investment properties and make smart business decisions.