Opinion on Cash for Keys?

5 Replies

I work in the Detroit market (no not the surrounding areas, actually in Detroit), and cash for keys always seems like a 50/50 shot.  Just wondering what other landlord/property managers have experienced with it.  

Whats your opinion on cash for keys? 

Has it worked for you/backfired? 

How did you proceed with it?

I think it could be a good option if done right.

You offer whatever amount you are comfortable with and makes sense to you. Put it in writing and state that they have until X date to move out COMPLETELY and return the keys in order to receive the payment. You both need to sign the agreement. The payment will be made via money order. Not cash. I wouldn't give back the security deposit. They're already getting cash to leave fast.

The date shouldn't be long. Give them a week. Not a month.

At the same time, go ahead and start the eviction process. This way, if they don't take the offer or they end up not moving out upon the agreed date, you have at least not wasted time and the eviction process has already started. You can always cancel an eviction.

It's hit or miss for me... esp in Detroit market. 

Some tenants will jump at it, but it's usually the tenants my PMs have a good rapport with. The others know, or can ask people who know, how to work the system and will attempt to drag out the process as long as possible. 

We try to understand the good tenant's situation and say something like "the owner will give you $250 for a moving truck or a storage unit, but only if you have everything moved out by XYZ date, the house is clean/undamaged and we process your checkout forms w/out any problems." 

If they verbally agree, we have them sign a cash4keys document. On agreed upon move out date, the PM inspects the home for damages. If anything is damaged or unclean, we have their signature on a document saying they agreed otherwise, so we ask them to remedy it immediately or pay the difference on the spot, at a later date or we take them to court later on.  

Only after they've handed over the keys and signed the document do we give them a $250 check, which they have to endorse and cash, so we get double the documentation of a move out related payment.... so if they somehow "work their way back into the property" after we've changed the locks, we have 2 signatures proving they were paid to vacate the property. 

Full disclosure: this has worked twice for me, but it did not proceed along the time scale we wanted. Tenants would say "oh sure, we'll leave by XYZ date" and they didn't do it. We tried to get them out in 30 days, but it took more like 60. 

Only when we proceeded with eviction and tenants received judgment/eviction notices did they get the message. So my advice, start the eviction process, so they know you're offering both the carrot and the stick, but give them the cash4keys option as a lesser of 2 evils.  

@Account Closed Exactly. You should start the eviction process at the same time as offering the cash for keys.

This way if they don't move out, at least the eviction process has already started and you didn't waste time hoping they'd move out.

We've done the cash for keys thing a few times (while eviction is processing of course), but it never panned out, always went to bailiff removal.

Have any of you had someone you paid come back and damage the home after they've been paid?