What is a Cash for Keys Agreement?
A cash for keys agreement is a legally binding contract in which a tenant agrees to vacate a rental property early in exchange for compensation. The agreement specifies an agreed-upon move-out date and the amount of payment the tenant will receive.
Why use a cash for keys agreement instead of eviction?
- Costs. Whereas eviction proceedings can include costly legal fees, a cash for keys agreement allows for a single negotiated payment.
- Time. Evictions can take months to work their way through the courts. Cash for keys agreements, by contrast, are usually resolved within weeks.
- Predictability. The timeline and costs associated with eviction are not always easy to predict. Cash for keys allows for a more controlled process.
How the Cash for Keys Process Works (Step-By-Step)
1. Check your Local Landlord-Tenant Laws
Although a cash for keys agreement is legal in all 50 states, some localities have laws regarding the general process of how to remove a tenant from a residential unit. Be sure to avoid taking action that could be deemed coercion, intimidation, or retaliation.
3. Put the Agreement in Writing
The agreement should be formalized in the same way as a lease. It should include all the relevant terms in writing and be signed by both parties. This not only minimizes the risk of disputes in the future, but it sets the terms outright to expedite the process for everyone involved.
Frequently Asked Questions (FAQs)
How much money should I offer in a cash for keys agreement?
The amount offered in a cash for keys agreement can vary based on factors like the property’s rent and location, as well as the tenant’s circumstances. An amount equal to one or two months’ rent is usually considered reasonable, but it varies.
Is a cash for keys agreement legal in my state?
Yes, cash for keys agreements are legal in all 50 states. As voluntary agreements, they are legally distinct from eviction proceedings. However, landlords must still follow state and local landlord-tenant laws and the federal Fair Housing Act when making any offer.
States, counties, and cities may also have specific requirements governing tenant buyouts and relocation agreements. These laws may require certain written disclosures, minimum payments, or waiting periods when offering a cash for keys agreement.
Can a tenant refuse a cash for keys offer?
Absolutely. Because a cash for keys agreement is voluntary, neither party is required to agree to it. A landlord is not allowed to use any form of intimidation or coercion to compel a tenant to sign on to the agreement.