Advise on giving tenants cash for keys

Justin Kerstetter · 2022-05-30T11:20:43-07:00

We rented our 3 bed 2 bath single family home last August to 4 younger college age students. There was one married couple that occupied the master and two males that were in the smaller bedrooms. One of the male tenants left to go back home in Texas and he found someone to replace him on the lease. The issues started when we left for Mexico last month. When we flew back home one of the tenants informed us that the married couple had gotten a dog even though we do not allow pets on our lease. All said and done they claimed it was an ESA so there was nothing that we could do. However, this cause one of the tenants to have to leave because she has bad allergies to dogs. This then left the remaining tenants to pay a higher rent until that space was filled. This never happened and the second male tenant left due to the toxic environment caused by the married couple. He has said that he will pay his full rent though as long as necessary. Through all of this we decided that we would not be renewing their lease obviously. We informed them of this and offered cash for keys at $200 each because they were having a hard time filling either spots on the lease. So they came to us yesterday and said they would take the deal but wanted $400 and to be able to stay in the house rent free until the 3rd of June at which point they would leave with the house spotless. Does anyone have advise on this? It feels disgusting being that we are trying to help them out of a situation that they have gotten themselves into but will not own up to. We know that they are not able to pay next months rent so it seems like they are trying to get as much money as possible. The female tenant even informed my wife via text that the $400 would be perfect because it would pay for their deposit to their next place. The nerve of these people is insane! Thanks for any advise on this.

Bjorn AhlbladPro Member

Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes

4y

Number one: no money until their stuff is out and they are too. They give the keys to you you lock the door and give them the money. You change the locks. That is all number one. Number two: no exceptions. Those are terribly self centered loser tenants! All the best!

2 Reply

Greg M.

Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes

4y

June 3rd is this week. My guess is that they have already secured the other unit with a deposit, so they are stuck. They're playing you to see what they can get. Give them nothing.

I'd tell them that I'm revoking my cash for keys offer and they can continue to live there until the end of the lease. Worst case is it is ~2 months. Any late rent they get hit with the listed late fee. Eviction is filed for non-payment of rent the first day possible. However, if you confirm in writing by the end of today that you will be vacating the unit by June 3rd, I'll allow the breaking of the lease with no penalty.

Take every cent owed for rent including the June partial month out of the security deposit.

FYI, for an ESA you need to make a reasonable accommodation. Reasonable being the key word. Allowing a dog in a shared living space with another tenant being allergic is probably not reasonable. You likely could have denied it.

1 Reply

Justin Kerstetter

OP

Investor · Redding, CA · Member since 2019 · 48 posts · 14 votes

4y

Quote from @Bjorn Ahlblad:

Number one: no money until their stuff is out and they are too. They give the keys to you you lock the door and give them the money. You change the locks. That is all number one. Number two: no exceptions. Those are terribly self centered loser tenants! All the best!

Definetely agree. They initially demanded that we guarantee their entire deposit back! We explained that the cash for keys as well as their deposit was dependent on the condition of the property once they were moved out.

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Justin Kerstetter

OP

Investor · Redding, CA · Member since 2019 · 48 posts · 14 votes

4y

Quote from @Greg M.:

June 3rd is this week. My guess is that they have already secured the other unit with a deposit, so they are stuck. They're playing you to see what they can get. Give them nothing.

I'd tell them that I'm revoking my cash for keys offer and they can continue to live there until the end of the lease. Worst case is it is ~2 months. Any late rent they get hit with the listed late fee. Eviction is filed for non-payment of rent the first day possible. However, if you confirm in writing by the end of today that you will be vacating the unit by June 3rd, I'll allow the breaking of the lease with no penalty.

Take every cent owed for rent including the June partial month out of the security deposit.

FYI, for an ESA you need to make a reasonable accommodation. Reasonable being the key word. Allowing a dog in a shared living space with another tenant being allergic is probably not reasonable. You likely could have denied it.

Thanks for the feedback. I definitely agree about them playing us to see what they can get. We already explained that there would be no more negotiating. That they need to either take our offer today or come up with full rent next month. It's just nerve-wracking thinking about possibly having to spend much more to evict if they decide to not pay and will not leave. Plus the potential fro them to cause damage to the property.

We found out that same information about the ESA from our attorney. We would of been able to deny it due to another tenant being allergic if she had not decided to leave. I honestly think she left because it was such a toxic environment. We found out after the fact that they were trying to charge her $200 more for rent than we had agreed to. When we confronted them on this they didn't seem to think there was anything wrong with this. They said it was for her to be able to use their stuff in the kitchen and living room.

I'm honestly just ready to be done with these people as they are so unpredictable and dishonest.

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Justin Kerstetter

OP

Investor · Redding, CA · Member since 2019 · 48 posts · 14 votes

4y

@Greg M. I forgot to mention that supposedly they are moving all of their stuff into a storage unit so unless they are lying I would assume that they are going to be moving in with family or friends until they can find a place.

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Colleen F.Pro Member

Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes

4y

@Justin Kerstetter so the lease is up and you are paying them to leave on time? or you are paying them to leave early because they can't fill the other spots? If the lease is up revoke the cash for keys. For cash for keys I have heard of people giving less the longer it takes to get out, its $400 if you go today, $300 if you go tomorrow, Nothing if you go June 3. The thing I would be clear about is that you will file an eviction if they don't go and that will hurt their chances of a future place.

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Justin Kerstetter

OP

Investor · Redding, CA · Member since 2019 · 48 posts · 14 votes

4y

Quote from @Colleen F.:

@Justin Kerstetter so the lease is up and you are paying them to leave on time? or you are paying them to leave early because they can't fill the other spots? If the lease is up revoke the cash for keys. For cash for keys I have heard of people giving less the longer it takes to get out, its $400 if you go today, $300 if you go tomorrow, Nothing if you go June 3. The thing I would be clear about is that you will file an eviction if they don't go and that will hurt their chances of a future place.

No the lease is not officially up until August 31st. We did already inform them though that we would not be renewing because wanted to be reasonable to any one applying to fill the vacant spots. At this point we were just trying to get them out ASAP as they have done a lot of things that are concerning. Plus we heard from a previous tenant that they do not have money to pay for June. We have explained that if they are not able to pay for June in full that they will be served with an eviction notice. We were just hoping to get them out sooner rather than later, as well at not have to go through the eviction process.

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Nathan GesnerBusiness Member

Moderator

Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

4y

Quote from @Justin Kerstetter:

The nerve of these people is insane!

The married couple got a dog in violation of the rules . . . and you allowed it. They claim it's an ESA . . . and you allow it. They chased off another tenant that is allergic to dogs . . . and you allowed it. The married couple chased off the third tenant . . . and you allowed it. All these bad behaviors, and your response is to reward them with cash?

The "nerve of these people" is created when you all them to walk all over you. They do what they want, you allow it, and then you pay them for their bad behavior. Cash for keys - one of the worst techniques available to Landlords - should not have been used. It should only be used as a last resort. You should have hit them with a lease violation when they got the dog. When they claimed it was an ESA, you could have still forbidden it because it's a shared space and one of the Tenants is allergic. When they refused, you could have terminated their lease. When they chased off either of the other tenants, you could have terminated. Since they are college students, they should be paying a combined total that is higher than the home would rent for to a single occupant or family. Each tenant should be on their own lease so you can terminate one while keeping the others.

There's a lot wrong here. You've already offered them $200, so stick to your guns and tell them they need to be out by 11:59PM on June 3rd or whatever. Seriously consider hiring a property manager. The 10% fee may easily be covered by the increased rent they bring in, the time/headaches they save you, and their ability to handle problems without throwing cash at it.

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2 Reply

Colleen F.Pro Member

Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes

4y

@Justin Kerstetter Nathan is right. You offered money so stick to it if they leave when you want them to, otherwise nothing. Remind them an eviction will follow them. And if they are married it's not like they can eventually hide behind a new relationship when getting another place both their names will be on an eviction.

0 Reply

Justin Kerstetter

OP

Investor · Redding, CA · Member since 2019 · 48 posts · 14 votes

4y

Quote from @Nathan Gesner:

Quote from @Justin Kerstetter:

The nerve of these people is insane!

The married couple got a dog in violation of the rules . . . and you allowed it. They claim it's an ESA . . . and you allow it. They chased off another tenant that is allergic to dogs . . . and you allowed it. The married couple chased off the third tenant . . . and you allowed it. All these bad behaviors, and your response is to reward them with cash?

The "nerve of these people" is created when you all them to walk all over you. They do what they want, you allow it, and then you pay them for their bad behavior. Cash for keys - one of the worst techniques available to Landlords - should not have been used. It should only be used as a last resort. You should have hit them with a lease violation when they got the dog. When they claimed it was an ESA, you could have still forbidden it because it's a shared space and one of the Tenants is allergic. When they refused, you could have terminated their lease. When they chased off either of the other tenants, you could have terminated. Since they are college students, they should be paying a combined total that is higher than the home would rent for to a single occupant or family. Each tenant should be on their own lease so you can terminate one while keeping the others.

There's a lot wrong here. You've already offered them $200, so stick to your guns and tell them they need to be out by 11:59PM on June 3rd or whatever. Seriously consider hiring a property manager. The 10% fee may easily be covered by the increased rent they bring in, the time/headaches they save you, and their ability to handle problems without throwing cash at it.

I agree that we made some mistakes along the way as this was our first tenants in our first property. However, we consulted with a lawyer and they had all of the paperwork necessary to prove the need for an ESA. Initially we did hit them with a lease violation but that was when they provided the paperwork. Like you said we would of been able to deny the ESA but the tenant that had the allergies decided to leave because of this and the poor environment caused by the married couple. I was not aware that we could of terminated their lease due to them simply chasing off the other tenants. Like I said we are just learning and will not make the same mistakes again. Thats why I made a post to get some feedback. Thanks.

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Advise on giving tenants cash for keys

Advise on giving tenants cash for keys

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