At Shamtob Law, it is our mission to educate our clients on the complex world of real estate. The better you understand something, the less likely you are to fall victim to any unfair deals. For example, cash for keys offers may seem like a good deal at first, but understanding the logistics reveals that it can be easily abused to evict tenants without fair compensation.
The What
When a landlord wants a tenant to vacate their building, they will sometimes offer the tenant cash in exchange for them to move out. The landlord may take this approach when a tenant is struggling to pay the rent or if damage is being done to the property. They may also do it if they have bought a new rental property and are ready to sell the one the tenants are occupying. This offer may also come from a bank that is foreclosing the property.
The Why
For landlords, eviction can be a long and difficult process. Particularly so if a home is qualified under L.A.’s stabilization ordinance that specifically protects the tenant’s from eviction. By offering money, landlords are hoping to make this process quick and easy.
The Money
Keep in mind —a landlord is trying to save money by offering cash for keys. According to the L.A. Property Management Group, court fees for eviction can cost between $400 and $700, and if a tenant contests the eviction and the landlord is forced to get a lawyer, costs can go well above $5,000. While cash for keys offers are typically negotiable, a landlord will likely start off with an offer that is below $400.
Should You Accept It?
When deciding whether or not to accept a cash for keys offer, it is important to think about how far that money will take you. Consider the time and costs of moving out of your current home and into a new one. Make sure the offer will at least cover the cost of moving into a new rental, and certainly don’t accept it if you don’t have a place to move into.
Cash for keys deals are not all bad. They can be used to benefit both parties if the compensation and circumstances are fair. If you have questions about real estate law or would like to learn more about our services and how we can help you get a fair deal, contact us today!