I am under contract on a property in San Diego. The only contingency remaining is that the tenants must be out prior to close of escrow. The sellers are out of state and would like me to have a conversation with the tenants in regard to cash for keys. The sellers have already asked the tenants if they would voluntarily move with monetary compensation and the tenants said yes. This is the extent of the involvement the sellers want in this process. It is now up to me to finalize the details on how much each tenant will need to vacate. I am not a real estate agent, property manager, etc. I am simply trying to buy this property. Am I allowed to have this conversation with the tenants and be the paying party for the “Cash for Keys” agreement?
You are allowed to do it but I don’t know why you would. Doesn’t the seller have an agent. He or she should be the one to do this.
Is tenant on month-to-month or longer lease term?
If the tenant is willing to move out what is the problem? And what legal standing does anyone (other than the landlord) have to get into any kind of agreement with tenant relating to rental?
Why has this become an issue in the first place?
Even if you are willing to do verbal conversation and agreement, I still would want tenant sign something when they are receiving the compensation. But to do that before close of escrow, it should be agreement between Seller (who is the original landlord) and tenant. So unless you are willing to deal with it after close of escrow, I would recommend seller to use their agent as their representative instead of you. This can go smoothly, but I would plan for the worse case. (NOT a legal advice).
I forgot to mention that you can’t evict someone right now so it is more important to get a professional involved.
Don’t close the deal until the tenants are gone
Thank you all very much for the responses and the information. I’m going to try to respond to everyone’s input. The seller agent is also my agent and he states that his brokerage will not let him get involved. He is facilitating it and coordinating the meeting with each tenant but he wants no part of the conversation.
This is not an eviction. This is a cash for keys arrangement to which the tenants can decline if they chose.
The sellers did not want to be involved with the process. I negotiated with them through the agent to allow me to do the leg work. They approved so now I’m just checking to see if I can even have this conversation with them.
I like the “do not close unless they are out” advice. I’ll do that for sure.
I will have them sign a receipt of payment and a statement that this is 100% voluntary participation by all parties involved.
At the end of the day, it sounds like if I want it done right, I should hire an attorney.
Thank you all again. Much appreciated. Any other info/advise/guidance is also appreciated.
Do you still have to give a reason to end tenancy ( extensive remodel, Family moving in etc ) if you are giving cash for keys ?
In the past, I asked the tenant to give me move out notice as my cash for keys.