Updated August 16, 2026
There is no fixed price, but there is a floor that sets the whole negotiation: LA City's mandatory no-fault relocation schedule. Eligible tenants are owed roughly $10,650 to $13,950 depending on length of tenancy, and qualified tenants — seniors 62 and over, disabled tenants, and households with minor children — are owed roughly $22,450 to $26,550. Mom-and-pop owners of four units or fewer pay a reduced schedule, roughly $10,200 to $20,600. A voluntary buyout has to beat those numbers or the tenant has no reason to sign, so in practice LA buyouts on rent-stabilized units clear the statutory figure and often land well above it — commonly in the $30,000 to $75,000 range per unit for long-tenured, deeply below-market tenancies, and higher where the rent gap is extreme. It is a negotiation, not a schedule.
A tenant considering a buyout is comparing two futures. In one, they sign and move. In the other, they stay, and if the owner ever pursues a no-fault termination, they receive the mandatory relocation payment anyway plus the time in between at a below-market rent.
That comparison is why offers below the relocation schedule are almost never accepted. The statutory amount is what the tenant can get without agreeing to anything.
The size of the rent gap. A tenant paying $1,100 in a submarket where the unit would re-lease at $2,600 is giving up roughly $18,000 a year in below-market housing. The buyout has to be meaningful against that, not against the statutory minimum.
Length of tenancy and household profile. A 30-year tenancy with a senior household is both the most expensive to relocate statutorily and the hardest to move voluntarily.
How many units you need. A single unit is a negotiation. Twelve units is a campaign, and the last three are always the most expensive — the remaining tenants know exactly what their neighbors received.
Your timeline. Buyouts negotiated against a closing date get expensive fast. Tenants who sense urgency price it in.
Whether the tenant has counsel. LA has an active tenant bar. Represented tenants generally negotiate higher, and the agreement is generally cleaner.
This is where sellers get into trouble, because an informal handshake buyout is not compliant and can be undone.
Written disclosure before signing. The owner must give the tenant LAHD's Tenant Buyout Disclosure Notice, informing them of their RSO rights, before the buyout agreement is executed. A buyout negotiated without that disclosure is vulnerable.
A 30-day rescission window. The tenant may cancel the buyout agreement within 30 days of signing, without penalty. Any closing timeline built around a buyout has to account for that window actually running.
Filing with LAHD within 60 days. The signed disclosure and the executed buyout agreement must be filed with the Housing Department within 60 days of both parties signing, through LAHD's online buyout system.
Written agreement, specific terms. Amount, move-out date, condition of the unit, mutual release. Verbal agreements over cash are how these turn into claims.
This is the question sellers should actually be asking, and the answer is often no.
On a 20-unit building, a buyout campaign at $50,000 to $75,000 per unit runs $1 million to $1.5 million and takes months, with no certainty that the last few tenants ever sign. Statutory relocation through an Ellis Act withdrawal on the same building costs the mandatory schedule per tenant — a much smaller total — but withdraws the building from the rental market entirely and comes with its own multi-year constraints on re-renting.
Meanwhile, a large share of LA buyers underwrite below-market rent-controlled rents as the upside they are buying. Selling with tenants in place and pricing honestly to the in-place rent roll frequently produces a better net outcome than spending a year and seven figures creating vacancy the buyer would have been happy to pursue themselves.
There are genuine exceptions — a small number of holdout units blocking a condo conversion or a redevelopment, or one problem tenancy that is materially chilling bids. Targeted buyouts in those situations can pay for themselves. A blanket pre-sale vacancy campaign usually does not.
Budget from the statutory floor, not from a number you hope will work: roughly $10,650 to $26,550 per tenant depending on profile, and expect real negotiations on deeply below-market tenancies to land well above it. Follow LA's process precisely — disclosure first, 30-day rescission, LAHD filing within 60 days — because a non-compliant buyout is worse than no buyout. And before you start, run the arithmetic against simply selling the building as it stands. On most LA rent-stabilized buildings, that comparison is closer than owners expect.
Can the buyer do the buyouts after close instead?
Frequently that is exactly what happens, and it is usually the cleaner structure. The buyer underwrites the buyout cost into their price and runs the campaign on their own timeline, without a closing date pressuring the negotiation. Sellers should be aware that a buyer doing this math will price the buyout cost into their bid.
Does the tenant have to accept a buyout offer?
No. A buyout is entirely voluntary on the tenant's side. There is no mechanism to compel one, and pressure tactics create liability under LA's tenant anti-harassment rules.
Is the buyout payment taxable to the tenant?
That is a question for the tenant's tax advisor, not for the owner or the owner's broker. Owners should not be advising tenants on the tax treatment of a payment they are negotiating against them.
Michael Sterman is Senior Managing Director Investments at Marcus & Millichap.
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