Illustration: Gustavo Reyes

Has your landlord offered to pay you money for you to give up your rent-controlled apartment? If so, the San Francisco Tenants Union (SFTU) recommends taking these steps before making a decision:

Step 1: Know your rights

Buyouts have become a common method for landlords to get around the eviction protections of the San Francisco Rent Ordinance in order to jack up the rent for your apartment. Landlords almost always use a “carrot and stick” approach; they dangle money in front of you and they suggest that you might be forced to move out.

These discussions often (but not always) happen either shortly before or shortly after the sale of a building. There are sometimes veiled threats from the landlord around this time, such as, “I’m thinking of moving in” or “I may ‘Ellis Act’ the building.” These are commonly referred to as “bluff evictions.” The best way to fight this manipulation is to remain calm and learn your rights. (Visit the SFTU and they can inform you of your rights and refer you to a tenant friendly attorney as needed.)

Illustration: Gustavo Reyes

Step 2: Always do the math

The possibility of having $10,000, $20,000, or even $60,000 in your pocket just to give up your rent-controlled apartment might sound tempting. But if you do the math, you’ll find that the money goes away pretty quickly.

Let’s say your monthly rent is $1500, but a comparable unit would cost you $3500. (Be sure to investigate the amount of rent being charged for nearby available units before agreeing to anything.) That’s an additional $2000 you’ll be paying each month. In this situation, a $20,000 buyout would last you only 10 months. A $60,000 buyout would last you less than three years. After that, you’ll start losing money. In addition, if you have any roommates, you’ll have to think about what their split of the buyout will be.

There are only a couple situations where the math can work in your favor: 1) If you plan on moving out of the Bay Area in the very near future, or 2) if, after learning your rights, you find that the landlord would still have a clear right to evict you.

Step 3: Insist that the landlord follow the law

The San Francisco Rent Ordinance requires the landlord to give you a copy of a “buyout disclosure form.” If you ultimately agree to the buyout, the landlord is also required to file a copy of that agreement with the Rent Board. (See Section 37.9E at sfrb.org/rent-ordinance) If the landlord has been saying that he/she “may decide” to move in to your unit, then you should insist that they take the steps necessary to do this legally. That means serving you a 60-day notice and filing a copy of it with the Rent Board. This is the only way you’ll really know whether or not it’s a “bluff eviction.”

Step 4: Never waive your rights

Too often, a landlord and tenant will reach an agreement, but then the landlord insists on a waiver provision that would force you to give up any rights you may have against the landlord. (Often these waivers come in at the last minute.) If you sign this waiver, you will not be able to sue the landlord if he doesn’t actually move in or remove the building under the Ellis Act. Even if you received an owner move-in notice, you’ll still be waiving your right to sue. This is the biggest landlord abuse with respect to buyouts.

If you decide to engage in buyout negotiations, make it clear early on that you have no intention of waiving your rights if the landlord doesn’t move in. If he balks at this, that’s a pretty good sign that he doesn’t intend to follow through with moving in.

Remember: You have the right to rescind within 45 days of the agreement

If you reach an agreement, the buyout provision of the Rent Ordinance allows a tenant to “rescind” (cancel) the agreement within 45 days after it is signed. That means that you will not have to move. If you do rescind, you’re required to pay back any money the landlord has paid you.

This column was originally published in the Fall 2017 issue of the “Tenant Times,” the newsletter of the San Francisco Tenants Union.