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Are San Francisco Tenant Buyout Agreements Valid?

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A valid Agreement ...Tenant buyout agreements or contracts in San Francisco are increasing in popularity.  The basics of a buyout agreement are as follows:  the landlord pays the tenant to vacate the property and the tenant receives financial compensation for agreeing to the buyout.  In addition, the tenant usually signs a general release whereby the tenant agrees not to sue the landlord for any violations of what may have occurred during his or her tenancy.

San Francisco landlords enter into these agreements for two reasons:  1)  As part of a negotiated settlement that occurs after a lawsuit has began; or 2) As part of a negotiated settlement entered into before a lawsuit has began.  Tenants enter into these agreements as either a way to break a lease early or in order to avoid eviction.

The amount of compensation received by the tenant for the buyout varies depending on why the buyout was entered into in the first place.  The minimum value will usually be seen as the amount of relocation benefits set forth in the San Francisco Rent Ordinance, which is approximately, $5,300.00 per tenant.  If the landlord is the party initiating the buyout, the landlord will usually offer more than the relocation benefits stated above in order to avoid attorney fees and the costs of litigation.  In some cases, landlords have been known to pay significantly higher then this amount, however, these cases are rare.

The validity of the tenant buyout agreement is also the subject of much debate.  Court decisions and statutes regarding buyout agreements are somewhat conflicting.  However, it is clear that if a tenant initiates the buyout agreement, then it is generally acceptable.  If a landlord initiates the buyout agreement, it is highly recommended that the landlord only relay the offer orally as a form of free speech, and make clear to the tenant that the tenant is not required to vacate.  Instead, the landlord should make the offer such that the landlord is only asking the tenant to consider moving out and that the tenant has every legal right to stay.

San Francisco landlord-tenant buyouts can be complicated.  It is highly recommended that both parties have an attorney to help them in this process.  The San Francisco Landlord-Tenant lawyers of Jones & Devoy are experienced and qualified to help both a landlord and a tenant discuss a tenant buyout agreement.  Contact our San Francisco office today to discuss a San Francisco landlord-tenant buyout agreement.

*More about San Francisco Tenant Buyout Agreements

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