Cash For Keys: Form?

[Naftali Tolibas]

I need to owner occupy and am working on trying to get the tenant out without having to evict. I'm planning on trying to go the Cash For Keys route. Do we need a written agreement to the cash for keys? How have you structured cash for keys with a tenant? Thanks!

[Nathan Gesner]

Eviction is only for tenants that fail to abide by the contract. You are basically trying to "buy out" the remainder of their lease term for personal reasons.

If you buy them out, you should absolutely have a written agreement. I'm not an attorney but I think you will be fine with writing up a simple document.

Tenant(s), _________________________________________, and Owner, _________________________________________, hereby voluntarily agree to an early termination of the lease agreement dated ______________________.

Tenant shall vacate no later than ______________________ at 4:00PM. (set a specific date and time). Tenant shall return the property clean and in the same condition it was received, minus ordinary wear-and-tear.

In exchange for early termination, Owner shall pay Tenant $____________ when the property is returned. The security deposit shall remain with the Owner and is subject to the terms set forth in the original lease agreement.

Should Tenant fail to return the property on the aforementioned date, Owner shall charge a Holdover Fee at a daily rate of $________ until Tenant vacates. If the Holdover is greater than three days, Owner reserves the right to initiate eviction proceedings.

Both of you sign and date. 

Moving is not cheap so you may want to negotiate paying a portion of the money when you sign this document and the remainder when they turn over the property. Get a receipt for any and all payments! 

The Holdover fee should be significant enough to deter the Tenant from staying longer. If rent is prorated at $50 a day, I would charge them $150 a day.

Treat the security deposit separate! You don't want to hand them a bunch of cash, refund the deposit, and then find out the house is a mess or they have unpaid utilities. Pay them for moving out, inspect the property after they move out, and then refund the deposit in accordance with your original lease and state law.

I hope this helps!

[Account Closed]

Originally posted by @Naftali Tolibas:

I need to owner occupy and am working on trying to get the tenant out without having to evict. I'm planning on trying to go the Cash For Keys route. Do we need a written agreement to the cash for keys? How have you structured cash for keys with a tenant? Thanks!

 Yes. Get it in writing and preferable have the tenants get the letter notarized if possible. You just need the normal stuff, names, amount, date, purpose, signature(s) and if you are going to owner occupy you might throw that in there too. Once they have signed and you have signed, give them a copy and keep a copy. Be sure to follow the AZ Landlord Tenant Act. They will need notification and some time to find another place. Make sure you return any deposits they paid, in the time allotted. 

They will "forget" the details later if it ever becomes an issue so my practice is to leave them a voice mail and when they call back I let it go to voice mail. I text them confirmation of the notice. They usually will text back. I try to capture enough voice mail and texts to archive so I have proof of the scope of the conversation. Keep your side very professional. Put the voice mails and text messages and scanned copies of all paperwork in an archive file on your computer. Make a backup on a CD Rom or USB and store that where it can be found. Actually all of that should be done for each property anyway.