Legal Question in Real Estate Law in California

Cash for keys is a voluntary offer from the new owner to (primarily) tenants living in foreclosed property to have you surrender the property to them in the very near future. First thing you have to determine is who bought the property at foreclosure. If it was the bank who was foreclosing, then the odds are better of getting some sort of offer; however, if an investor bought the property at foreclosure sale, they might be less likely to offer you anything. Under the Protecting Tenants at Foreclosure Act, the new owner must give you at least 90 days notice to move from the property. If you have a bona fide lease that extends beyond 90 days post foreclosure, you can actually insist that they honor that lease and let you stay through the end of its term. You do, however, have to pay rent during that time.

So, if the bank recovered the property at foreclosure, then they may offer you cash to leave in the very near term. They don't want to wait 90 days, then have to file an eviction to get you out, so they will determine based on a lot of factors how much they should offer you to leave. Unfortunately, there is no way I or anyone on this list can predict what that amount will be. Remember, it is 100% voluntary on the part of the bank, and they don't have to offer you anything. Your leverage in negotiating with them is that you will stay the full 90 days. They will usually give you a 90 day notice, then at the same time a letter with the cash for keys offer. You can always counter-offer them with a higher amount, but just be realistic that the number they offer you is not capricious - its based on their analysis of the holding costs of that particular property, the loss they might incur by not getting the property back sooner than later, and they are probably not going to go substantially higher than their initial offer.

If an investor bought the property, then you will be lucky if you get any offer. They are less-interested in paying you money to leave, and often I see investors ignore that 90 day notice requirement, and give the tenant a three day notice to leave, then file evictions. If that's the case, you will have to fight the eviction even though it is based on a bad notice. You will want to contact an attorney if they try to evict you on anything other than a 90 day notice. Good luck - we are seeing this situation so frequently it is really sad, and putting a lot of people out with not enough notice to find a new place to live.

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