Generally no — not for the purpose of selling at a higher price. LA City RSO and most LA-adjacent rent control regimes require just cause for eviction, and "to sell the building" is not a qualifying cause. At-fault termination (for non-payment, lease violation, nuisance) is always available where genuine cause exists. No-fault termination options exist but typically require specific legal steps (Ellis Act, substantial remodel, owner move-in) and come with substantial relocation obligations. For most LA sellers, the practical answer is: sell with tenants in place, price honestly for the rent roll, and skip the pre-sale vacancy strategy.
At-fault termination. If a tenant has not paid rent, has violated lease terms, or has engaged in conduct that qualifies as cause under RSO and California law, at-fault termination is available. The eviction process has its own timeline and legal requirements, but the cause is legitimate.
Ellis Act withdrawal. Exit the rental business entirely by withdrawing all units from the market. Legal but expensive — relocation assistance obligations per tenant, plus a multi-year re-rental restriction on the building. Ellis is rarely the right answer for a seller simply trying to clear the building for a traditional sale.
Substantial remodel termination. If the building requires substantial remodel work that cannot be performed with tenants in place, no-fault termination may be available with specific legal requirements, relocation assistance, and documentation.
Owner move-in termination. In specific circumstances, for specific family members, with specific procedural requirements and relocation assistance. Narrow application.
Voluntary buyout. Negotiate a cash-for-keys agreement with the tenant. Voluntary, requires LAHD disclosure and specific procedural steps, and involves written agreement with required provisions.
Terminate a tenancy because you want to sell. "To facilitate a sale" is not a cause recognized under RSO or most LA-area rent control ordinances. The tenancies are protected through ownership changes specifically to prevent this kind of termination.
Raise rents above the allowable cap to pressure tenants to leave. The allowable annual increase is the allowable annual increase. Attempting to impose larger increases creates compliance violations.
Use harassment-based strategies. Tenant harassment is independently prohibited under LA City's Tenant Anti-Harassment Ordinance and carries substantial penalties. Pressuring tenants to leave through intentional reduction of services or habitability violations is legally actionable.
Buyout costs. A buyout on a long-tenured below-market tenant is substantial — often tens of thousands of dollars, sometimes more than $100,000, depending on tenancy profile.
Ellis Act costs. Relocation assistance obligations plus the multi-year re-rental restriction plus the opportunity cost of an empty building waiting for conversion or redevelopment. On a typical mid-size building, total cost routinely runs into hundreds of thousands of dollars before any end use is realized.
Substantial remodel costs. The remodel work itself plus relocation obligations plus project timeline.
Opportunity cost of vacancy. Every month a unit is vacant is a month without rental income during the pre-sale period. The cumulative cost of a pre-sale vacancy strategy frequently exceeds the marginal pricing improvement the vacancy produces. For most LA sellers, the math does not work.
Buildings being sold for redevelopment or gut renovation. The buyer needs vacant delivery, and the seller's decision is whether to absorb the vacancy cost or pass it to the buyer through a lower price.
Specific units critical to a specific buyer's plan. An owner-move-in unit, a commercial conversion, a specific repositioning plan — vacancy on specific units may pencil when the end use is specific.
Buildings where the in-place tenants are genuinely problematic. Non-paying tenants, lease violators, nuisance situations — at-fault termination through proper process produces the vacancy through legitimate cause, not through sale-motivated termination. For a standard sale to a standard buyer (institutional, 1031 exchanger, local operator, family office) on a stabilized rent roll, the vacancy strategy almost never pencils.
Sell with tenants in place. Price honestly for the rent roll as it is. Let the buyer decide what to do with the tenancies after close, according to their business plan and their legal obligations. This approach produces cleaner net outcomes for the vast majority of LA multifamily sellers than pre-sale vacancy creation does.
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What is at-fault versus no-fault termination?
At-fault termination requires tenant-caused grounds (non-payment, lease violation, etc.) and does not require relocation assistance. No-fault termination applies to landlord-initiated reasons (owner move-in, substantial remodel, Ellis) and requires relocation assistance plus specific procedural compliance.
How much are LA tenant buyouts?
Amounts vary based on tenancy length, unit profile, tenant motivation, and local market. Long-tenured below-market tenants often require payments in the tens of thousands per tenant, sometimes higher.
Does the buyer have to honor my tenant leases?
Yes. Leases transfer with the building. The new owner steps into the landlord's position under existing leases and applicable rent control protections.
Michael Sterman is Senior Managing Director Investments at Marcus & Millichap. This is informational, not legal advice — consult specialized counsel before pursuing any tenant termination strategy.
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