Tenant buyout agreements become more attractive as eviction actions take longer
Fundamentally, the statewide eviction process has remained the same over the course of several years. There have been some misplaced attempts to meddle with it, like when San Francisco attempted to require landlords first to send a ten-day warning letter to allow time for tenants to remedy a violation of the lease (a rule that the courts tossed out). Still, we have always shared the same chart to depict the carefully choreographed steps of the eviction process.
This process starts with a 3-day notice to pay rent or quit, or a 3-day notice to cure or quit, and the tenant has 3 days (excluding weekends and judicial holidays) to pay the rent or correct another violation of the lease, and if the issue is not resolved after 3 days, the landlord has perfected his or her right to evict.
What is painful for housing providers is that once an unlawful detainer process is commenced, not a penny in rent can be accepted because once money exchanges hands, the tenancy has begun anew and the landlord has forfeited their right to proceed with the eviction action.
No-fault evictions buy even more time for outgoing tenants.
When a tenant who has resided in a rental unit for more than a year, and the owner endeavors to move themselves or a close relative into the tenant-occupied unit, it will necessitate a 60-day notice. Hopefully, the tenant complies with the owner’s wishes and moves out, but if not, the owner will have to proceed with an eviction. Do the math.
If the tenant has 60 days to vacate in an owner move-in or relative move-in eviction (OMI/RMI) and fails to do so, it may take another 120 days to remove them from the premises. Meaning we are looking at half a year before the owner can recover possession of the premises. This assumes that the landlord has had all of the I’s dotted and the T’s crossed, but this is by no means guaranteed. We often encounter clients who familiarize themselves with eviction laws on the Internet and go it alone, only to find out that some misstep was made and frustratingly, the process has to start over.
A new law that went into effect January 1, 2025, will further delay evictions.
It used to be that once an eviction lawsuit is filed, the tenant had 5 days to respond (excluding weekends and judicial holidays). This time has now doubled to 10 days. Many housing providers might say, “what’s the big deal?” and we respond that days add up and the conveyor belt of litigation has slowed down.
It is hard enough to serve a tenant, a task that may take weeks. After the tenant is properly served, there are 10 court days in limbo; the eviction action is suspended in time. Generally speaking, owners who go down the path of eviction lose rental income, are saddled with the expense of paying for an attorney, and put in the uncomfortable position of waiving rent in a settlement agreement. And so the extra 5 days given to tenants to respond to the lawsuit is not trivial; it will expend more time, money, and aggravation to the landlord.
A properly negotiated, legal and enforceable tenant surrender of possession agreement may make more economic sense.
Bornstein Law always approaches landlord-tenant disputes from an economic perspective. Our goal is never to ratchet up the legal expenses of rental property owners or drag out the pain of removing an unwanted tenant.
Rather than going through the morass of an eviction, it may be prudent to offer compensation in exchange for a voluntary vacancy. More than “cash for keys,” an ironclad tenant buyout agreement prepared by Bornstein Law will not only accomplish the goal of starting fresh with a vacant unit and raising rents to market rate; it will also indemnify the landlord from any residual claims arising out of the tenancy. An easy example is when a tenant leaves the unit and later alleges that a household member developed a respiratory condition because of a mold infestation.
It may put a pit in the stomach of housing providers when they have to pay money to a tenant as an enticement to vacate, especially when the tenant owes past due rent, but will it pay dividends? At Bornstein Law, we want our clients to think smartly and strategically about their real estate investments. When there is no convenient or legal means to evict, or if an owner wants to circumvent the increasingly longer and more expensive eviction process, a tenant buyout agreement may be a topic worth broaching with a tenant you want to be colored gone.
In certain jurisdictions, these agreements are regulated and come with a host of procedural requirements, but we are happy to walk you through them so that you can use the property as you see fit without going through the cumbersome eviction process.
