Cash for keys is a voluntary agreement where a landlord pays a tenant to move out by a set date, usually in exchange for returning the keys and the unit in broom-clean condition. In California, it’s legal and common, but the rules around it depend heavily on the city. In Los Angeles, rent-stabilized units require a specific disclosure form, give the tenant 30 days to cancel and must be filed with the city.
For investors, cash for keys usually comes up in one of three situations: you’re buying a property with a tenant and want to move in or renovate, you’re planning to add an ADU and need access to the yard or garage, or you’re selling and a vacant property will sell for more. Here’s how to do it right.
Why cash for keys exists: the just-cause baseline
Most California rentals are covered by the Tenant Protection Act (AB 1482). Once a tenant has lived in a unit for 12 months, you need a legal reason to end the tenancy. No-fault reasons like owner move-in or a substantial remodel require relocation assistance equal to one month’s rent, or waiving the final month’s rent, under Civil Code 1946.2.
SB 567, effective April 2024, tightened those no-fault reasons. Owner move-in and substantial remodel terminations now come with more documentation, stricter timing and bigger penalties if you get it wrong. I walk through each path in How to Legally Terminate a Tenancy in 2026.
That’s why so many owners choose cash for keys. A voluntary buyout:
- Doesn’t require a just-cause reason
- Usually takes weeks instead of months
- Avoids the cost and risk of an unlawful detainer case
- Gives you a firm move-out date you can plan construction or a sale around
Cash for keys in Los Angeles: the RSO buyout rules
If the unit is covered by the City of LA’s Rent Stabilization Ordinance (RSO), a buyout has to follow the Tenant Buyout Notification Program under LAMC 151.31. The key requirements:
- Disclosure Notice first. Before you make an offer, give the tenant LAHD’s RSO Disclosure Notice. It must be signed and dated.
- Tenant’s language. The buyout agreement must be in the tenant’s primary language.
- 30-day cancellation right. The agreement must state, in 12-point bold type above the signature line, that the tenant can cancel any time up to 30 days after everyone signs, with no obligation or penalty.
- File with LAHD within 60 days through the city’s Tenant Buyout Online System.
- Get it wrong and the tenant can cancel at any time, and can use the defect as a defense in an eviction case.
Practical tip: structure payments so most of the money is paid after the 30-day window closes and the tenant hands over the keys.
What should you offer? Use the relocation numbers as an anchor
There’s no legal formula for a buyout amount. In LA, the starting point most tenants and their advisors use is what the tenant would receive in a no-fault eviction. LAHD’s relocation assistance amounts for July 1, 2026 to June 30, 2027 are:
| Tenant household | Less than 3 years | 3+ years or low income | Mom & Pop property |
|---|---|---|---|
| Eligible tenant | $11,000 | $14,400 | $10,550 |
| Qualified tenant (senior, disabled or with minor children) | $23,150 | $27,400 | $21,250 |
A buyout offer below those numbers is a tough sell for an RSO tenant, because they know what a no-fault eviction would pay. Long-term RSO tenants paying far below market often ask for much more.
Outside LA, rules vary. Santa Ana’s rent stabilization ordinance requires three months of relocation for no-fault terminations. Most other Orange County cities follow AB 1482’s one month.
A simple way to price it
Think about what the move actually costs the tenant, then compare it to what vacancy is worth to you.
What the tenant gives up (example):
| Item | Amount |
|---|---|
| Rent difference: paying $1,800, comparable unit rents for $2,600 | $800/month |
| 12 months of that difference | $9,600 |
| Moving costs | $2,500 |
| New security deposit | $2,600 |
| Total | $14,700 |
What vacancy is worth to you: On a property you’re buying to add an ADU or renovate, every month of delay costs you your full payment plus the rent you aren’t collecting on the finished project. If your carrying cost is $7,000 a month, getting possession three months sooner is worth $21,000.
When the tenant’s real cost is lower than your value of getting the unit back, there’s room for a deal.
What to put in a cash for keys agreement
- Move-out date and what happens if it’s missed
- Total amount, and when each part is paid (for example, a small amount at signing and the balance at key handoff)
- Condition of the unit: broom clean, all belongings removed
- How the security deposit is handled. California requires an itemized accounting within 21 days under Civil Code 1950.5
- A mutual release of claims
- A statement that the agreement is voluntary and that the tenant may consult an attorney
- In LA RSO units: everything required by LAMC 151.31, including the 30-day cancellation language
Have a California real estate attorney draft or review it. A sloppy buyout can unravel at the worst possible moment.
What not to do
- Don’t pressure or threaten. Cities including Los Angeles have tenant anti-harassment ordinances, and pressuring a tenant into a buyout can create liability.
- Don’t cut off services or start work to make the unit unlivable.
- Don’t promise a buyout you can’t fund at closing.
Cash for keys when you’re buying in escrow
If you’re buying an occupied property, the seller is the landlord until closing. You have three main options:
- Seller delivers it vacant. The seller negotiates the buyout before closing and you make vacancy a condition of the contract.
- You negotiate a credit and handle the buyout yourself after closing.
- You buy it occupied and plan around the tenant, which can work if the ADU is going in the backyard.
Each has trade-offs. I cover the contract language in What to Include in Your Purchase Contract When Buying an Occupied Property and the LA County escrow red flags in What to Watch Out For During Escrow With Existing Tenants.
If you’re on the selling side, see Can You Sell an ADU Property With an Active Tenant in Orange County? and How to Sell Your Long Beach Multi-Unit With Uncooperative Tenants.
Rent control changes the math
Whether a unit is rent-controlled affects what a buyout is worth. A tenant in an LA RSO unit paying well below market has more to lose. A tenant in a newer unit or a single-family home exempt from local rent control under Costa-Hawkins has less. My AB 1482 and ADU exemption guide explains which units are covered.
FAQ
Is cash for keys legal in California?
Yes. It’s a voluntary contract between landlord and tenant. Some cities, including Los Angeles for RSO units, add disclosure, cancellation and filing requirements.
How much is cash for keys in California?
There’s no set amount. In LA, buyouts are usually measured against the city’s relocation assistance amounts, which range from $10,550 to $27,400 for July 2026 through June 2027. Elsewhere, offers are often based on moving costs, a new deposit and the rent difference the tenant will face.
Can a tenant back out of a cash for keys agreement?
In LA RSO units, yes, within 30 days after everyone signs, or at any time if the landlord didn’t follow the rules. Elsewhere, it depends on the agreement.
Does a tenant have to accept a cash for keys offer?
No. A buyout is always voluntary.
Is cash for keys faster than an eviction?
Usually. A voluntary move-out can happen in weeks. A contested eviction can take months.
Who pays for cash for keys when buying a home?
It’s negotiable. Sellers often handle it to deliver the property vacant, or buyers take a credit and handle it after closing.
The bottom line
Cash for keys is often the cleanest way to get an occupied property ready for an ADU, a renovation or a sale. In California, it works best when you know the just-cause baseline, follow your city’s buyout rules and price the offer based on what the move really costs the tenant.
👉 Book a buyer ADU consult call to go through your options with Dylan
Prefer to talk now? Call Dylan Serna, ADU Realtor at 714-860-2868.
Dylan Serna | The ADU Realtor | eXp Realty | DRE #02217359
This post is general information, not legal advice. Tenant laws change often and vary by city. Have a California real estate attorney review any buyout agreement.
