Post written for a Real Estate Agent

What is cash for Keys and how is it used in Arizona

"Cash for Keys" is a term used to describe an exchange.  A Landlord, Lender, or Realtor offers cash to tenants to ensure 2 things.  First, that a tenant will move out in an short period of time.  Second, that the tenant will promise to leave the property in good condition, often also stated as "broom swept" condition.

Often a cash for keys offer is made, when a landlord is trying to encourage a tenant to move out prior to the end of a lease.  It can be offered in place of eviction, and can sometimes help avoid many complicated issues.  Cash for keys can be successful, because the extra cash affords the tenant a possibility of a deposit on a new rental.  The settlement can be used to help with moving expenses, and it is also designed to keep the renters from complaining.  And if the situation has become frustrating for both parties, it is often accepted.  A cash for keys offer is usually more than $1000.00, and the amount can decrease as the time passes.  

For example:  Your tenants contract doesn't expire for 8 months.  The Landlord needs his property back in 30 days.  He might contact the renter and let them know that if they can be out in 15 days, he will pay $1500.  If the tenant can't be out for 20 days, the amount reduces to $1000.  If the tenant is unable to move for 25 days, the landlord offers him $500.  

The amount of money you offer should match the urgency of your need.  When a situation is agreed upon, the tenant must sign the cash for keys agreement.  Your tenant must be made aware that they are voiding their rental agreement by signing this cash for keys agreement.  And that the money is their incentive to move quickly.

"Broom swept condition" is how we descried the cleanliness of the home after tenant has vacated.  All possessions are removed.  All trash is removed.  Any large messes are addressed.  The home will still require the attention of a professional cleaning crew, to wipe it down.  But, there is no need for a landlord to perform hours of service to the unit because the tenants left in a respectful manner.  The landlord will meet the tenant after they have vacated, and perform a quick walk through of the property.  If the tenant has upheld his end of the agreement, you will be handing him an envelope of cash, in return for your keys and garage door openers!

A tenant does not have to agree to a cash for keys proposition.  They have signed a lease and can abide by the terms of that lease.  But it is possible to discuss new terms with your tenant, and offering cash, will usually soften the blow.   

Without voluntary surrender of the keys to a home, the landlord faces the eviction process. While eviction notices are served and the eviction is finally enforced, the house is simply sitting there.  Eviction is often cheaper than a cash for keys aggreement, but it will take time to enforce.  By getting a so-called “broom clean” house in exchange for a small cash settlement, the landlord can quickly turn it around.