“Cash for keys” sounds like a deal you might find on a used car lot, an incentive program to get a person to walk away with a vehicle by forking over a bundle of bills. The reality as it pertains to landlords isn’t so different in theory, though there isn’t a car involved, and it can make a big difference when trying to deal with a tenant who won’t move out.
Offer Them Cash for Keys to Get Them to Move
If you as a landlord don’t want to have to go through a lengthy and often-costly eviction process, you may consider this alternative. Cash for keys is a method used by a number of landlords in the past who are trying to work out a deal, over the table, to encourage problematic renters to leave the property. The idea is to push them to exit while the unit is “in good condition,” i.e. before they react to your wishes for them to leave with anger or possibly even violence. If you’re concerned that the person may cause damage to the unit before the eviction process is finished, or if you want to avoid official eviction entirely, then this may be the way.
Outside of eviction, there’s no legal way to force your unruly tenants to leave. Cash for keys, though, can act as ” incentive to get tenants to leave voluntarily.” This option is usually less expensive than a “formal eviction,” saving you time and money as well as worrying about what the tenant might do to the unit before the process is through. So, how can you go about working through this as easily and painlessly as possible?
First, you should present then with the fact that you’ll evict them if necessary. You can stress how tedious and unpleasant the process is (because it is). Give them all the details about it, including what “the steps for eviction are, the consequences, and the expense and the impact on their future.” It’s likely that they’ll come around to your way of seeing and realize that they don’t want that, but it may need the extra nudge of incentive. If it seems like they really won’t budge on their own, discuss the cash for keys option. You can give them money in exchange for the unit in undamaged condition. Make sure that you’re completely transparent in what you expect, which includes making it clear by what date and time you expect them out.
As with most things, you have to get all this in writing. There are official “cash for keys” forms that you can likely find online to help facilitate this process. You also need to make it clear that you will have to proceed with the eviction if they do not honor the agreement after it’s been crafted. Along with the timing of their departure, you need to be specific about the price you’re paying so there can’t be any misunderstanding when the time goes.
Obviously, you want to be there on “moving day,” on whichever date you’ve assigned for the departure. Thoroughly check over the apartment to make sure they’ve held up their end of the bargain by not damaging the place. Only after that should you exchange the keys for the money. This alternative usually goes well because tenants are happy to have both money in their hands and no indication on their record that they had to be put through an eviction. Once they leave for good, make sure you go back into the unit and prep or clean it as you would normally so you can get a new renter in before long.
“While it may seem like cash for keys is letting problem tenants get away with something, you really should try to tame your sense of justice and focus on what is best for your business.” The process benefits both you and the renter and can prevent a huge loss of time and money, between the eviction process and potential damages.
However, there are a number of things that you should avoid doing that can make the situation more sticky (and possibly illegal). For example, if you’re frustrated with how things are proceeding (or not) with this troublesome tenant, don’t try and take things into your own hands by trying to force them out. This could include changing locks to keep them out or shutting off water or heat, all of which are unlawful and could get you in a lot of trouble. Along these same lines, you can’t harass them in person with messages, calls, or any other way that “physically or verbally” threatens the person. It’s crucial to remain professional throughout this process no matter how frustrating things are.
When deciding how much to offer, be reasonable and incentivizing, but don’t be unrealistic or excessive. It’s still your money and the point is for it to be less of a financial burden than the alternative. Speaking of the money: offer a check instead of bills, if you can, despite the name cash for keys. That way, you’ll have written proof of the exchange to set along with the documents you both signed. “If you have negotiated to pay in cash, then make sure you both sign something that marks the transaction.” Having records of the event is almost as important as the exchange happening successfully.
A lot of landlords have been able to used the cash for keys strategy to the benefit of both parties. If you can encourage the tenant to leave without additional problems, then you’ve accomplished something. If only the rest of the property management process could work as smoothly! Fortunately, Anton Systems offers training with the SKYLINE Property Management & Accounting Software so that you can get even more help throughout this profession. SKYLINE makes it easier than ever to manage the financial and other information about your building and tenants so that you can focus on other work.