Cash for Keys. It’s Just Business.
Cash for keys is a strategy where a property owner or landlord offers to pay a squatter or holdover tenant to vacate the premises to avoid an eviction proceeding. Is it akin to paying a bribe? Perhaps. Will it save time and money? In many cases it will. Eviction can be a lengthy and expensive process in many jurisdictions. Is it immoral? There are some who claim it is—that it will encourage future unethical behavior in the squatter or tenant, sort of like a gateway crime. I don’t think it is. In fact, I can envision instances where it is the right thing to do. Suppose a long term tenant has lost their job, their spouse, or has experienced another hardship. They can no longer afford to lease your property but they do not have the means to move. Could it be in the best interests of both the landlord and the tenant for the landlord to help pay for the real expense of moving and securing another residence? I think it could. It is simply a tool—one which I do not like to use but would in the right situation. In fact, I have only used cash for keys once. It wasn’t my idea but it worked out beautifully.
A multi-year tenant had given proper notice to leave a rental property but when the date in his notice came he didn’t leave. I called to see whether he was still in the property. He was. We had a brief conversation in which he informed me that he had a place lined up to move to but that he would not vacate unless I paid him—cash for keys. Again, this was a long-term tenant (most of my tenants have been long term tenants) so I knew him fairly well. He was a decent guy. Usually did what he said he would when he said he would. He was rarely late with the rent—gave notice and paid late fees when he was. He was current on all charges when he delivered his ultimatum. It surprised me to say the least. He told me that he appreciated the tenancy. He also told me he knew it would cost me lost rent, time, and court costs to evict him. I suspect he knew he had me at a disadvantage and was prepared to press his advantage. He said “it wasn’t personal, it was just business”. I realized he was right—he would stay if I didn’t pay and paying would cost less. I don’t recall what I agreed to pay (I believe it was ~$500 plus his security deposit). Our agreement was that I would come by at a specific time in a few days and if he had removed his belongings, left the house clean and returned his keys, I would pay his ransom.
I arrived at the agreed upon hour and found a moving van in the driveway. The house was clean but the tenant had not finished loading his stuff into the van. He asked for his check. I pointed out that he wasn’t out yet—that our agreement was that I would pay him after he gave me possession of the house. He said he would need a few more hours. Perfect. I knew I now had the advantage. I instructed him to leave the keys on the counter when he was finished loading the van and to call me so we could discuss another meeting. When he called I thanked him for leaving the house clean and expressed my disappointment that he had chosen this way to end his tenancy. He demanded his check. I explained that our agreement was that he would give me possession of the house at a specific time. I was prepared to honor the agreement but he did not perform his part. I would not pay him. “It wasn’t personal—it was just business.”