What to Include in a "Cash for Keys" Agreement

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Key Takeaway
When entering into a Cash for Keys Agreement ensure the following issues are covered:

• Form and Timing of Payment
• Condition of the Property
• Failure to Vacate
• Independent Legal Advice

A Cash for Keys Agreements is where the the Tenant agrees to end their tenancy in exchange for payment from the Landlord.

These have become fairly common in recent years.

The problem I often see - Landlords only execute an N11 Form without additional provisions to outline the mechanics of the deal.

We solve this issue by executing a custom Agreement to End Tenancy along with an N11 Form.

While each situation may require their own unique clauses - there are a few issues that we always want to cover - things that a simple N11 Form does not.

These include:

Form and Timing of Payment:
You want to include specifics of how and when the payment will be made to avoid any disputes or misunderstandings. By clearly outlining the payment details, landlords can ensure that tenants are aware of the exact process, reducing the risk of delays or claims of non-payment.

Condition of the Property:
Including this clause ensures that tenants understand their responsibility to maintain the property's condition until they vacate. This helps landlords avoid additional costs for repairs or cleaning, ensuring the property is left in an acceptable state for new tenants or for sale.

Failure to Vacate:
This clause addresses the consequences if the tenant fails to vacate by the termination date. It provides landlords with legal recourse and potential compensation for any delays, protecting their interests and ensuring the tenant takes the agreement seriously.

Independent Legal Advice:
Including an opportunity for the tenants to seek independent legal advice ensures that they fully understand the agreement. This clause demonstrates that the landlord has acted fairly, protecting the agreement's validity if challenged.

The best way to think about this: Never execute an N11 Form alone. There should always be a more detailed contract executed along with it.

It's just good practice, and it protects the landlord from any disputes or misunderstandings that arise, way too often, in these tenancy situations.

P.S. We provide this as a service offering for when your clients are in need.

Written by
Zachary Soccio-Marandola
Real Estate Lawyer

Direct: (647) 797-6881
Email: zachary@socciomarandola.com
Website: www.socciomarandola.com

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