Cash for Keys Los Angeles
What is Cash for Keys, and how will it affect you in Los Angeles? Before looking into cash for keys Los Angeles specifically, the rights that you may have there and the regulations in place regarding Cash for Keys, we need to understand what it is.
Cash for Keys, the term which was initially coined in Los Angeles, is a concept that is simply referred to as a tenant buyout in the rest of the world. This occurs when a landlord offers a tenant a sum of money, usually paid in a single instance, to move out of their property. In return, the tenant waives their legal remedies against the landlord.
There are a myriad of different reasons why this occurs but it is becoming especially prevalent in Los Angeles
Reasons for Increasing Cash for Keys in Los Angeles
The Tenant Protection Act of 2019 meant that in the entire state of California, including the bustling city of Los Angeles, landlords were subject to increasingly strict rent control and that they needed probable cause to evict a tenant and not extend their lease.
This became a massive problem during the pandemic as some landlords, who had been leasing their units to long time renters at extremely low rates, could not lawfully raise the rent to even market value in an attempt to make up for other financial shortfalls.
Buying out an existing tenant with Cash for Keys meant that they could sign a new lease at a better rate, leading to long term profit despite the upfront cost
It has become an incredibly difficult and arduous process to evict a tenant. Some landlords might have due reason for an eviction and could get it done through the proper streams, but because of how long it takes and how much money they may lose in a situation where termination of the lease was due to property damage or non-payment, it might be quicker and more cost effective to offer a tenant a Cash for Keys deal.
Higher Selling Price
Generally, it is easier for landlords to sell a property, and for them to get a higher price, when there is a guarantee that the property will be empty by the time that the transfer process has been completed.
For this reason, it might be financially beneficial for the landlord to pay a small sum to get rid of the tenant before they place the property on the market.
Cash for Keys Los Angeles: Tenant's Perspective
Do You Have to Accept a Cash for Keys Offer in Los Angeles
If you are a tenant in Los Angeles who has received a Cash for Keys offer for whatever reason, do you have to accept it?
The simple answer is that you do not. A Cash for Keys offer is just that, an offer. It is cash in exchange for voluntary vacation of the property and termination of the lease.
Under no circumstances should you accept the offer if you are feeling pressured by your landlord, especially if you know that there are no grounds for them to evict you.
Denying the offer does not give your landlord any right to evict you or to raise your rent.
When Should you Accept a Cash for Keys Offer in Los Angeles?
There are multiple reasons why you would want to accept a Cash for Keys offer in Los Angeles. Firstly, it might be best to accept the offer if you know that your landlord has probable cause to evict you.
The consequences of not accepting the offer might be that the landlord proceeds with the eviction process which would not only mean that you might be liable to financially compensate the landlord if they take further legal action against you, but you will lose your deposit and you will probably struggle to find your next place.
It is also important to remember that a tenant can be evicted for reasons that are not related to the tenant in certain circumstances.
In these cases, Cash for Keys might be an olive branch extended by the landlord due to a conscience issue. For this reason, it is recommended that you find out why the landlord has initiated the offer before simply denying it.
Some of the reasons why the landlord may be able to evict you that are not at all related to you include:
- Using the unit to house a close family member
- Building management changing
- Renovating multiple units
- Conversion into multi-family condominiums
You could also accept the offer if you know that you are able to find another place of similar rent very quickly, and that you will end up better off financially after receiving the money and moving than you would if you had simply stayed.
Can you Negotiate a Cash for Keys Offer in Los Angeles?
If you have been given a Cash for Keys offer by your landlord, it is possible to negotiate. Of course, not all landlords will do so, but because you do not have to accept anything that you are not happy with, negotiation is an option.
Cash for Keys does not necessarily only constitute cash up front either. You can negotiate for lower - or even no-rent in the time that you remain in the property.
It is important to remember that it is only worth it for the landlord up to a certain point, in which case they may decide to revoke the Cash for Keys offer entirely; so do not to take too much advantage of the situation.
But through the use of tact an amicable agreement can be reached.
There are multiple reasons why a tenant might receive a Cash for Keys offer in Los Angeles. It is important to remember that you do not have to accept the offer, and that you can negotiate for a higher sum or more benefits. However, it is also important to understand when you would be better off accepting the offer.
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