Since the form of agreement for cash keys is a negotiated and voluntary termination of the tenancy agreement, tenants who sign can avoid an eviction decision. Property owners and managers can avoid headaches, time and loss of earnings if they have to start eviction proceedings or pay rental fees. Although it is called “cash for keys,” you pay by cheque if possible. This way you will have an official record of the transaction. If you have negotiated to pay in cash, make sure you both sign something that marks the transaction. Give the customer a receipt and create a copy for your records. Key money is a way for a landlord (or bank in a situation of enforcement) to convince a tenant to evacuate a property for an agreed amount of money. While it may seem counter-intuitive, cash for keys is often cheaper than a lengthy eviction process. As a general rule, the amount paid comes with provisions based on the condition that the property is left in place.

Cash for keys is common in situations where tenants can no longer pay rent or damage property. In other cases, this may be an option when a landlord buys a new rental property and wishes to leave with existing tenants. Cash for the keys is separated from the tenant`s deposit and simply because they are abandoned does not mean that they automatically expire that deposit. They must always treat the deposit as usual, which is to conduct a formal extract review and deduct return rent, damages and unpaid benefits. Most states require you to send tenants a written and broken list of all deductions and remaining balance. Forgetting this important step, even if the surety is fully retained for the reasons mentioned above, could lead to legal action by the former tenant. Cash for keys can be a faster and more peaceful alternative than distributing tenants, or a way to get tenants to leave if landlords want to renovate the unit before it is rented for more money. Casual or unwanted tenants may be motivated to move quickly for money. The American Apartment Owners Association offers cash for key agreements for homeowners and property managers to download and use. If a landlord wants to encourage a tenant to move soon, they may offer to remove them from the lease. You can also offer cash for the form of the key agreement, in order to give the tenant even more incentive to leave soon and keep the property in good condition. In exchange for an early termination, the landlord will pay the tenant the payment of the tenant if the property is returned.

The deposit remains the responsibility of the owner and is subject to the terms of the original lease. Given our current economic conditions and legal constraints, many landlords are unable to effectively pursue with an illegitimate inmate (eviction), while many tenants are in a difficult financial situation that prevents them from moving or paying rent.