Is 'Cash for Keys' a Good Alternative for Landlords Who Want Tenants Out?
In a perfect world, the tenant-landlord relationship would be a cut-and-dry situation that had every contingency accounted for in the lease. Unfortunately, this is simply not the case. Regardless of how in-depth your tenant background checks are, you're going to run into situations where you want renters out of the property before their lease is up. In some instances, this isn't even over a lease violation. Fortunately, an option known as "cash for keys" can still get the ball rolling.
What is Cash for Keys?
While there are several reasons why it may be necessary to evict a tenant, it might not always be the easiest process in the world. Evicting a person can be a drawn-out process, and you sometimes may not even have the legal grounding to do so. Luckily, there are potential ways to get around this.
Cash for keys is one of these methods. In a nutshell, you're basically paying off a renter to vacate the property. This will not put either of you in legal jeopardy just as long as you have the appropriate paperwork and both agree to the decision. This has long been a useful tool in the foreclosure process, and its effectiveness has led to more landlords utilizing the tactic. Even absent a lease violation, it can often get tenants to move out.
Reasons for Losing Good Tenants
You should know that not all tenants who you ask to leave in this manner will be good tenants. In some situations, renters simply become a hassle to keep around without having violated any clause in the lease. This being said, however, there are many occasions where you might also need a great tenant to move out.
Imagine that you get a call from a family member who has been tossed out of their home. As a landlord, you obviously have the means to help them, but you might have a tenant occupying the one residence where your family member could stay.
In this instance, a cash for keys agreement is an obvious answer. This is also the case if a situation has arisen where you need to move back into your own property. So although cash for keys is a great method for getting rid of bad tenants, don't feel bad if you need to ask a great renter to leave.
Legality of Cash for Keys
There are numerous ways that a landlord can deal with a tenant breaking a lease, but none of them will prevent the tenant from leaving. However, if it's you who want to break the lease, you have a much more difficult road ahead.
If a tenant refuses a cash for keys agreement, you will unfortunately not have much of a legal recourse. However, if the renter is okay with the agreement, there should be no legal hurdles in your way. Simply draw up a document dictating that the individual will vacate the home for a certain amount, and all should be well.
Paying Off Bad Tenants
If you weren't able to identify a bad tenant prior to their move in, you will be in a predicament if they're causing problems without violating the lease. It's also important to note that many landlords have opted to do the cash for keys process even when a tenant has violated the lease. Although starting the eviction process can be relatively easy thanks to online tools, it can still be a hassle if the renter fights the process.
Even if you'd win in the end, you'll usually wind up paying huge legal fees while not receiving rent payments. Also, there's a chance the tenant may never pay what they owe, so many landlords have found it more cost-effective to simply pay these lease violators to move elsewhere.
There are many tools at your disposal as a landlord, you just have to know what they are. The cash for keys process may seem like a worst-case scenario, and in some instances it may be. In other cases, however, it can prove an invaluable resource for protecting your properties and assets.
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