Tenant Buyout Costs in Los Angeles: What to Expect in 2026
A tenant buyout, often called cash for keys, is a deal where you pay a tenant to move out voluntarily.
Inglewood’s own rent ordinance treats a buyout as a separate, specifically regulated agreement from a relocation-fee termination — see what Inglewood’s Housing Protection Ordinance requires before you sell a rental.
In the City of Los Angeles it is one of the few lawful ways to get an occupied rent-controlled unit back without a no-fault eviction. It is also regulated. For RSO units, the city prescribes a disclosure form, specific contract language, a cancellation window, and a filing deadline.
Get those wrong and the tenant can cancel the deal, even after they have your money. Here is how the process works in 2026, what drives the price, and how to tell whether a buyout actually pays for itself.
When the city’s buyout rules apply
The Tenant Buyout Notification Program, Los Angeles Municipal Code section 151.31, applies to units covered by the Rent Stabilization Ordinance (RSO). That is most rental units in buildings built on or before October 1, 1978. Check any address on ZIMAS (zimas.lacity.org) under the Housing tab.
For non-RSO units, the city’s disclosure-and-filing program does not apply. You should still put any agreement in writing, keep it voluntary, and stay well clear of anything that looks like pressure. The city’s Tenant Anti-Harassment Ordinance covers all residential tenants. Our statewide overview of cash for keys in California covers the general mechanics outside the RSO.
The RSO buyout process step by step
According to LAHD, a landlord who wants to offer an RSO tenant money or other consideration to move out must:
- Give the Disclosure Notice before the Buyout Agreement is signed. LAHD’s two-page “Disclosure Notice – Tenant Rights” form must be given to the tenant, signed, and dated. It tells the tenant they do not have to accept and that refusing an offer is not a legal ground for eviction.
- Write the agreement in the tenant’s primary language.
- Include the cancellation statement. Above the signature line, in 12-point bold type: “You, (tenant name), may cancel this Buyout Agreement any time up to 30 days after all parties have signed this Agreement without any obligation or penalty.”
- File with LAHD within 60 days. Both the signed Disclosure Notice and the executed Buyout Agreement must be filed within 60 days after both parties sign, through LAHD’s Tenant Buyout Online System.
The tenant’s side of the deal is just as clear. They may refuse, consult an attorney or LAHD first, and cancel within 30 days of signing.
If the landlord skipped any of the requirements, the tenant can cancel at any time and can raise the defect as a defense in an eviction case.
The payoff for doing it right: when a tenant vacates under a properly filed buyout, the RSO lets you reset the rent to market for the next tenant.
Relocation amounts: the benchmark everyone uses
Buyouts are negotiated, so there is no fixed price. But both sides look at the same reference point: what the tenant would be owed if the owner used a no-fault eviction instead, such as an Ellis Act withdrawal. LAHD updates those amounts every July 1. For July 1, 2026 through June 30, 2027 they are:
| Tenant type | Tenancy under 3 years | Tenancy 3+ years | Income at or below 80% of area median (any length) |
|---|---|---|---|
| Eligible tenant | $11,000 | $14,400 | $14,400 |
| Qualified tenant (62 or older, disabled, or household with a minor dependent child) | $23,150 | $27,400 | $27,400 |
These are per unit, not per person. A tenant who knows these numbers will rarely accept less than their category’s figure, because an owner who chose a no-fault eviction would have to pay that amount anyway, plus give long notice. In practice, the relocation amount acts as a floor, not a ceiling.
What actually pushes the number up
- The rent gap. The farther below market the tenant is paying, the more they lose by moving. A tenant paying $1,400 in a neighborhood where comparable units rent for $2,800 would face $16,800 a year in higher rent elsewhere.
- Length of stay and stability. Long-term tenants with kids in local schools, nearby jobs, or health needs have more at stake.
- Your alternatives. If you could use the Ellis Act or an owner move-in, the tenant knows the floor. If you have no realistic alternative, the tenant holds more leverage.
- Timing pressure. If you need the unit vacant by a sale deadline, you will usually pay more.
Non-cash terms matter too: waived final rent, a flexible move-out date, help finding a new place, return of the full deposit, or covering movers. These often close the gap for less than straight cash.
A worked example
Here is a hypothetical, simplified to show the math.
An owner has an RSO duplex. Unit B is a two-bedroom rented to the same couple for seven years at $1,450 a month. Similar units nearby rent for about $2,800. Neither tenant is a senior, disabled, or has a minor child, so they would be eligible tenants with 3+ years: a relocation benchmark of $14,400.
What the tenants give up. The rent gap is $1,350 a month, or $16,200 a year. If they would have stayed two more years, moving costs them around $32,400 in higher rent, plus moving costs and a new deposit.
What the owner gains. After a properly filed buyout, Unit B can be re-rented at market, or the duplex can be sold with one unit vacant, which opens it to owner-occupant buyers. On an income basis, $16,200 a year of extra rent at a 5.5% cap rate implies roughly $295,000 of added value. Even if a buyer credits only part of that, the spread is large.
A realistic deal. The owner offers $28,000. The tenants counter at $40,000. They settle at $34,000 plus two months of waived rent and a move-out date 75 days after signing, safely past the 30-day cancellation window. Most of the payment is released when the keys are returned, often through escrow, with a smaller amount at signing. Total cost to the owner: about $37,000 plus attorney fees.
Whether that pencils depends on your plan. If you will sell to an owner-occupant or re-rent at market, it usually does. If you plan to sell to an investor anyway, compare it against simply selling occupied.
Timeline to plan for
Budget roughly two to four months from the first conversation to an empty unit: time to prepare the disclosure and agreement with counsel, negotiate, wait out the 30-day cancellation window, and give the tenant a reasonable move-out date. Then file with LAHD within 60 days of signing. If a sale depends on it, build in slack.
What you must not do
- Start talking money before the tenant has the Disclosure Notice.
- Threaten eviction, imply the tenant has no choice, or misstate their rights.
- Cut services, delay repairs, or make the unit unpleasant to encourage a move. That is harassment under city law.
- Treat a refusal as a reason to evict. It is not.
Have a landlord-tenant attorney draft the agreement. It costs far less than an agreement the tenant can cancel at any time. For more on where the legal lines sit, see our post on landlord retaliation rules in California.
Common questions
Can a tenant take the money and then cancel?
Within 30 days of signing, yes, without penalty. That is why most agreements pay the bulk of the money at move-out, not at signing, and set the move-out date after the cancellation window closes.
Do I have to file a buyout for a non-RSO unit?
The LAHD filing requirement under section 151.31 applies to RSO units. For other units, use a clear written agreement anyway and get legal advice on the terms.
What if the tenant says no?
Then the tenancy continues. Your options are to sell occupied, revisit the offer later without pressure, or consider a lawful no-fault route such as an Ellis Act withdrawal, which has its own notice periods, relocation payments, and long-term restrictions.
Compare it with selling occupied
Buyout math is only one compliance factor in an RSO building. A unit already placed into the city’s Rent Escrow Account Program after unresolved habitability violations loses its fee-increase rights until the problem is cured, which changes the comparison — see what REAP placement means for a seller.
Sometimes the cleanest answer is to skip the buyout altogether. We either buy directly or bring a vetted cash buyer, and we purchase LA rentals with tenants in place, so you can compare a buyout plan against a straight occupied sale.
Read more on our sell rental property in Los Angeles page or our guide to selling a tenant-occupied property in Los Angeles. Call (424) 435-2326 or request a no-obligation offer online.
Want to see what other California sellers say about working with us? Find Cash Home Buyers CA on Google for reviews, or call us at (424) 435-2326.