Evicting a tenant can be a long, frustrating process, which is why some landlords opt for easier methods. One of the most common ways to avoid eviction while still getting the tenant to leave is by offering cash for keys. Although this method doesn’t work in all scenarios, it can help you get your property back with less hassle. Read along to learn more about cash for keys and how it can still be an effective solution for landlords.
Contents of This Article:
- What Is Cash for Keys?
- How Does a Cash for Keys Agreement Work?
- What If the Tenant Doesn’t Move After the Agreement?
- Pros and Cons of Cash for Keys
- Tips for Offering Cash for Keys
- Get Help From Local Property Managers
What Is Cash for Keys?
One thing that no landlord or Philadelphia property management team wants to handle is an eviction. However, cash for keys is a method that some landlords use to manage tenant turnovers without eviction. It’s as simple as it sounds–you pay tenants to leave your property voluntarily.
Although this method isn’t necessarily appealing, it can save time if you need the tenants out as soon as possible. Additionally, you can avoid the lengthy eviction process, potentially saving money in the long run.
That said, it’s important to construct a cash-for-keys agreement carefully. You want to follow all rental laws to avoid an illegal eviction or landlord harassment lawsuit. Next, we’ll go over how to construct a cash-for-keys agreement and more details on how they work.
How Does a Cash for Keys Agreement Work?
There may be a few instances where offering cash for keys is the best option for removing a tenant. For example, if the tenant is behind, the property needs renovations, or you’re trying to sell the property, you may offer cash for keys.
That said, if you’re looking to go that route, there are certain steps you need to take to ensure you’re not taking illegal actions. The first step is contacting the tenant and letting them know you’re considering making a deal with them to move out.
During this conversation, you must be up-front about what you expect from your tenants in return. For instance, you’ll want to settle on a move-out date and ensure that they leave the property in good condition.
Once you and your tenant have settled on mutual terms, put the agreement in writing and have both parties sign it. Also, keep good records of everything pertaining to your agreement with the tenant. This documentation can help later on if there are any disputes between you and the tenant.
What If the Tenant Doesn’t Move After the Agreement?
Cash for keys is enticing for landlords and an easier solution for tenants than a costly eviction. However, you may end up with a stubborn tenant that doesn’t comply with the agreement you settled on. In this scenario, you may have to proceed with a legal eviction.
However, you may only evict them if there’s a legally enforceable right for you to do so. For instance, your cash-for-keys agreement should state that the tenant’s failure to comply will result in legal eviction.
If your tenant doesn’t settle on a cash-for-keys agreement at all, you may have to skip right to the eviction process. Otherwise, you can wait for their lease to expire or negotiate a different deal. However, remember that if you want your tenant out as soon as possible, you may have to compromise.
Pros and Cons of Cash for Keys
While offering cash for keys can be highly beneficial and easier for some landlords, it’s important to recognize the disadvantages. Here are some of the pros and cons to consider before making a cash-for-keys agreement with a tenant.
- Avoid the Eviction Process- Evicting a tenant is a long, costly process. Usually, landlords have to pay court fees and lawyer fees and still lose out on profits. Offering cash in exchange for possession of the property is often less costly.
- Potentially Help a Tenant- Perhaps your tenant is going through a hard time and can’t afford rent. Offering them cash to leave the property can save you time and money while sparing them from eviction.
- Faster Possession of Property- When you offer an incentive like cash for a tenant to leave, they might be willing just to leave. After all, once you explain the eviction process, they’ll soon realize that taking the cash offer and leaving the property is much easier.
- Tenant May Not Move- Even if you make an agreement, there’s no guarantee that the tenant will move out. As such, you may proceed with a formal eviction after all, wasting time and money.
- Potential Property Damage- Your tenant may become angry or upset about having to move out, which may result in them damaging the property. Some damages may cost more than the eviction process itself.
- May Encourage Others- If you offer cash for keys for one tenant, others may start to expect it also. This could result in potential lease violations to get a cash payout.
Tips for Offering Cash for Keys
If you’re thinking about offering a simpler solution than eviction, here are some tips to consider.
- Explain the Eviction Process- Before jumping right to a cash-for-keys agreement, explain why your tenants need to leave. Additionally, explain to them the eviction process and the legal consequences of having it on their rental record.
- Get Everything In Writing- It’s crucial to put your agreement in writing with signatures from you and the tenant. Additionally, you’ll want to get proof of the transaction once you’ve paid the tenant and keep it for your records.
- Don’t Negotiate Too Much- No matter how bad you want your tenant out, don’t let them talk you into more than you’re willing to pay. Instead, start low and work your way up to a higher number or closer to the maximum you’re willing to give.
Get Help From Local Property Managers
Dealing with bad tenants and the entire eviction process is frustrating and time-consuming. As such, some landlords offer cash for keys to get tenants out as soon as possible. But how can you avoid dealing with bad tenants in the first place? One way is with comprehensive property management.
Need More Advice? contact us today!
Bay Property Management Group carefully screens tenants to ensure you have tenants that pay on time and respect your property. If they don’t, our property managers can help assist with the eviction process, communicating with tenants, and protecting your property. That said, if you’re looking for rental management in Baltimore, Philadelphia, Northern Virginia, or Washington, DC, contact BMG today.