Here’s a novel idea: leave the tenants alone and let them stay as provided under federal law. Realtors are playing with fire by harassing tenants, lying to them about their rights, and prematurely displacing tenants from their homes, which happens all too frequently. And for what? So that the homes can sit vacant after tenants move. Don’t forget – tenants are innocent victims in this foreclosure crisis. Sean’s comment that “If the folks have two pieces of furniture and look like they could really use some cash, you might want to start with offering $500 if they are out tomorrow” is particularly troublesome. Sean, can we assume that along with the $500 offer you are informing the tenants of their right to stay for 90 days or through their lease term?
Give us a break Dean. Auction investors are in business, and to survive in this business you have to turn houses quickly. I’m not suggesting anyone lie, or deny folks their rights, but let’s be super clear… their is nothing illegal, or immoral about offering a tenant cash to vacate prior to the end of their lease. Often it is in the best interest of the renter… especially since they will likely have little luck recovering their deposit from the prior owner. And, NO, the buyer at auction is NOT responsible for returning that deposit.
Cash-4-keys is a win-win, whether folks understand their rights or not. It certainly isn’t the job of the auction buyer, or the investors Realtor to inform tenants of their rights.
Finally - tenants may be innocent, but they OFTEN benefit by skipping rent for months during the foreclosure. And given the notices posted on the property and people coming by they are NEVER unaware of the situation. Check out our homeowner and renter forum and you’ll see posts from renters asking how to stay for free as long as possible and still get cash-4-keys. Walk a mile in an investors shoes before you cast aspersions.
Finally, in my experience most tenants actually find it a RELIEF to be offered cash-4-keys and move on.
Great info, as always.
Re: “It certainly isn’t the job of the auction buyer, or the investors Realtor to inform tenants of their rights.”
I just want to be sure about doing this right. Legally, when the auction buyer provides notice, there is no legal requirement to inform tenant in writing of their rights? I heard from an eviction firm that the buyer should provide a 3 day notice “to vacate or to provide a copy of a bonafide lease,” and possibly to provide notice of their rights for 90 days in absence of the lease. I assume this can be concurrent with a cash for keys offer. (My understanding was If they don’t respond in 3 days, you can start the Unlawful Detainer process).
Bob - two separate issues. One is contacting the occupant re: cash for keys. At that point you are simply approaching the tenant with an offer to move faster for cash - with the alternative being eviction. Note that I clearly said you should not lie - so if the person asks how long they are allowed to stay under the law, I would answer honestly. I disagree with Dean that you are required to sit the person down and inform them of every right they have whether they ask or not.
Separately when you begin the eviction process you need to provide the notice to quit as required by California law. On that front I would follow the text outlined in the law and recommended by your eviction service.
So you’re saying to use two separate notices, and Cash for Keys comes first, and notice to quit comes a few days after? It just seems like if they get an Notice to Quit after they’ve received the Cash4Keys it might be misunderstood… maybe better to wrap up into one notice?
In regards to people skills, do you recommend that a Cash for Keys offer be first presented in person, or on the phone to the tenant, instead of certified mail or FedEx?
It sounds like you want to get in the offer as quickly as possible and basically not make specific comments about the tenants rights? So how do you phrase the part about “the alternative being eviction.” Must you leave it vague as to when the eviction will be–otherwise you could be misleading them?
If you can pm or email me on a sample Offer or notice I would appreciate.
- I don’t recommend a notice for cash-4-keys. Its a negotiation.
- In person.
- Say whatever you want, just don’t lie. Sorry, I don’t have a script. As I said above each case is different. If you go off a script and don’t take the other persons issues into account you will likely fail. Win-win requires listening - not notices by fed ex.
Okay, so you present the Cash for Keys offer in person and I assume give them the offer in writing… do you wait until you get a firm rejection or a couple days of no response before submitting a Notice to Quit or do you simultaneously provide this and start UD or some other process in the background regardless of the offer being accepted?
Simultaneous if you can. No reason not to start the clock ticking. You can easily stop the unlawful detainer process once they perform… and if they don’t perform you haven’t lost any time.
This is the worst comment I have seen from this guy called Sean. The bottom line is that tenants really do not have to leave a property, especially if it’s in a ‘just cause’ situation because lenders aren’t selling houses anyway. They just sit vacant for no reason. Or the lender gets a realty company to resell the house for some price to another investor for the same price that the original lender refused to knock the underwater house down to to make the mortgage manageable for the former homeowner. I say no to ‘cash for keys’ unless it is at least $50,000 which is what it costs the lender to file and process an unlawful detainer against a rightful tenant!
Like it or not, that’s the reality. Tenants that take as whacky a position as you suggest above get physically removed from the house by the sheriff. I’ve filed nearly 100 unlawful detainers and rarely have spent more than $1500 - and at the end I’ve received a judgement against the tenant for rent from the day of foreclosure leaving it a net cash win for me every time. But I’d rather work with folks and flip the house faster. So there is ZERO question that cash-for-keys is the clear, and ONLY, win-win for both investor and tenant.
Innocent Tenant misses the point. The law provides that the holdover occupant can be evicted by way of an unlawful detainer action because the possession of the premises is just that … unlawful. The occupant really does have to leave the property, by sheriff’s escort if necessary. Our law says so. If the occupant is offered what could be considered a gift of cash to cooperate in leaving the premise instead of being forced to vacate through proper legal means, that seems to be a good thing for the occupant. That cash can assist the the occupant in relocating to a legitimate place of residence and it is a practice that should be encouraged.