Landlords encounter situations where they need the tenant to vacate their rental property. There are many reasons for this, some of which include needing to remove a bad tenant from the rental property. In these situations, landlords many times need to file an eviction action against tenants who are in violation of the lease.
Once the eviction is filed, the question arises, is it worth it to offer a “cash for keys” to the tenant to bring resolution to the eviction with a guarantee that the tenant vacates the premises. While some landlords do not like the idea of offering cash to a tenant who is in violation to leave the premises, there are times when it may benefit the landlord. How does the landlord determine if offering “cash for keys” is a good decision?
This article addresses some factors when analyzing the question. They include:
Certainty and Evictions
Many eviction actions are simple, but not all are. In general, the more the landlord mis-manages the rental property or the more nefarious or scrupulous the tenant is, the greater the likelihood that the tenant will raise defense issues in the eviction action, which can, at a minimum, muddy the waters of the case. Using a landlord-tenant attorney who specializes in this area of law and practice will provide the landlord with guidance on what the case could look like and its possible journey and outcomes.
When the tenant raises colorable defenses, those issues must be litigated and determined by a judge or jury before the landlord’s action is determined. Keep in mind, even with the legal requirement of F.S. 83.60(2), which requires the tenant to deposit back and future rent into the court registry to be able to raise a defense (other than the defense of “payment of rent”), the eviction case could still head down a rocky road for the landlord. See our article, “Eviction Case From Hell”. That is, even if the landlord ultimately prevails, the landlord may have to pay a fine price and wait considerable time to get there.
A “cash for keys” settlement agreement will bring certainty and finality to the eviction case. Instead of having to spend time and money on litigation, the parties simply agree that the “cash for keys” agreement resolves all the factual and legal issues and brings the case to conclusion. The landlord can receive the benefit of finality so he can move on from this tenant and situation.
Time Delays with Evictions
Like the reasons stated above, when a tenant raises colorable defense issues (especially when the judge doesn’t handle the case in a proper and expeditious manner), the eviction case can be delayed, causing the landlord to have to wait until a judge or jury determines the legal and factual issues raised in the case. All the while, the landlord has to litigate the action. Again, this problem is especially exacerbated when the judge handling the case gives the tenant undue opportunities to delay and not timely post back and accrued rent into the court registry. The inherent time delays in that kind of contested eviction case provides the landlord with motivation to settle the case by offering a “cash for keys” agreement with the tenant.
Additionally, “time is money” in the rental business, so the longer the landlord must wait to regain possession of the premises, the more costly it can be to the landlord. Not to mention, the eviction case will impose burdens on the landlord, as he must assist his attorney in prosecuting the eviction action. The stress and dealings of legal action is something to consider when considering what is the best decision to resolve the action.
Eviction Legal Fees
In combination with the reasons stated above, landlords are further motivated to consider a “cash for keys” agreement considering that the landlord must incur legal fees to prosecute a contested eviction case. The messier the case, the more legal fees will be incurred. Like the other factors, this factor must be considered on a case-by-case basis, but in general, the more complicated and highly contested the eviction case is, the more the landlord should consider a “cash for keys” agreement with the tenant.
For example, if the landlord is reasonably expected to incur $5,000 in legal fees to litigate the issues in the case, the landlord may benefit as much by offering an amount of money to the tenant that is less than what the landlord expects to pay in attorney fees in exchange for the tenant vacating the rental property by a date certain.
Keep in mind, Landlords rarely collect legal fees (or even back rent owed) from a tenant after the landlord prevails in the action. So, the thought that “I can collect my legal fees from the tenant after I prevail” may be misguided and should not be considered when deciding to settle the case or not. In short, if the landlord must spend the money anyway (on legal fees), it may be more prudent and sagacious to spend that money (or a lesser portion of it) to resolve the case and bring it to finality.
Conclusion
“Cash for keys” agreements can benefit landlords depending on their situation. While they are not necessary in all evictions, “cash for keys” agreements may be a worthy option for landlords in some cases. Landlords should, of course, consult with their landlord-tenant attorney to discuss what settlement terms and options the landlord may have in their eviction case so the landlord can make an informed decision that brings benefit to the landlord.
Property Management Law Solutions, LLC is a Florida law firm that specializes in landlord-tenant law and is a landlord-only law firm. We provide statewide services including evictions, consultation plans, education and training, membership plans, lease agreement plans and more. If you are a landlord or property manager, contact us today or subscribe to one of our online membership plans.