SEC. 37.9E. TENANT BUYOUT AGREEMENTS.
(a) Findings and Purpose. San Francisco is in the midst of a housing crisis. As the disparity between rent-controlled and market rate rents continues to grow, landlords have greater incentives to induce tenants in rent-controlled units to move out. Similarly, with the real estate market skyrocketing, many landlords are selling their property with the knowledge that an unoccupied unit can command a significantly higher sale price than an occupied one.
Instead of evicting tenants, some landlords offer cash buyouts to tenants in exchange for the tenants vacating rental units. These are sometimes called buyout agreements. Even buyouts worth tens of thousands of dollars can be recouped by a landlord retaining ownership and re-renting at market rates or selling the unit. Unlike no-fault evictions, these buyouts are unregulated, and can enable landlords to circumvent many of the restrictions that apply when a landlord executes a no-fault eviction. For example, a landlord who executes some types of no-fault evictions must give tenants a certain amount of time to move out, provide funds to tenants to cover relocation costs, and allow tenants to move back into the unit under specified circumstances. Two types of these no fault evictions – the Ellis Act and owner move-in evictions – contain restrictions on how much rent a landlord can charge if the units are re-rented following eviction. Analogous regulations do not exist for tenant buyouts.