Rent regulation & tenants
Buyout (cash-for-keys)
A negotiated payment for a tenant's voluntary vacancy (cash for keys); many rent-control cities impose disclosure, filing, and rescission-window rules.
Definition
A buyout — cash for keys — is a negotiated agreement in which a tenant vacates voluntarily in exchange for payment, clearing a unit without invoking any eviction cause. Because the vacancy is voluntary, Costa-Hawkins vacancy decontrol lets the owner reset the next tenancy to market.
Rent-control cities regulate the negotiation: San Francisco requires a pre-negotiation disclosure of tenant rights, filing of the executed agreement with the Rent Board, and a 45-day tenant rescission window, and Los Angeles, Berkeley, Santa Monica, and Oakland run comparable disclosure-and-filing regimes. Buyouts can also carry collateral consequences — in San Francisco, certain buyouts count against later condo-conversion eligibility.
Why it matters in an underwrite
Buyouts price displacement in dollars instead of litigation: on deeply below-market units the check is often large — benchmarked in practice against the local relocation schedule and the recapturable rent delta — but it buys a clean, decontrolled vacancy with no notice defects to litigate. Underwrite budgets unit by unit against loss-to-lease, follow the local procedure exactly (skipping the disclosure or the rescission window can make the agreement voidable), and paper every deal — regulators and future buyers will read the filings.
Sources & related guides
See also
See the term in the law itself
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Last reviewed 2026-07-29. General information, not legal advice.