After a foreclosure auction, we have never found the need to motivate a holdover owner or tenant to move out quickly by offering them some sort of “cash for keys” deal. However, anticipating that we might have to resort to such a buyout some time, we have on hand the following form, Agreement To Vacate Premises (see Fillable Forms).
If we were ever tempted to enter into such an arrangement, it would probably be with a holdover tenant, who by CA law, has the right to hold over for 30 days after receiving a notice to vacate due to foreclosure (as a reminder, a holdover owner is only entitled to a 3 day notice to vacate).
To shorten the 30 day notice period, it may behoove us to pay a tenant a cash bonus to make it worth their while to move out earlier than the free, 30 day time period that’s specified by law. [California Code of Civil Procedure §1161a(b)(3)(c)]
Currently it is typical for an REO lender to routinely offer to buy out holdover tenants at the rate of $50 dollars per day for each day they move out early, plus a base amount of approximately $500 dollars. For example, if a holdover tenant takes 30 days to vacate, the maximum the lender will pay them is $500 dollars. However, if they move out in just 15 days the lender will pay them an additional $750 dollars. But, if the occupant takes longer than 30 days to vacate, the lender won’t pay them anything for moving out.
The chronology of events involved flows as follows:
As a bonus, you’ll note that when they sign your agreement they will have agreed to be liable for your legal costs if you have to evict them. That’s something they weren’t obligated to pay prior to signing your form.
At this juncture it’s important to realize that there’s no reason why you cannot establish your own buyout amounts which might differ substantially from those commonly used by lenders (and used herein for illustration purposes only).
Play around with the numbers until you arrive at a buyout or “cash for keys” schedule that you feel would be enough to motivate you to move out early (if you were a hold-over tenant with the right to stay 30 days after being served with a notice to vacate).
Copyright © 1997-2015, InnoVest Resource Management
InnoVest Resource Management, 4569-A Mission Gorge Place, San Diego CA 92120-4112
(619) 283-5444, Fax (619) 283-5455