What Is Cash for Keys?

Cash for keys is a voluntary agreement where a landlord pays a tenant to vacate the property peacefully, avoiding the formal eviction process. The tenant receives money; the landlord gets their property back quickly.

Key Takeaway

Cash for keys is completely legal in California when done voluntarily. It's often the fastest, cheapest way to resolve tenant disputes—even when you have strong legal grounds for eviction.

When Cash for Keys Makes Sense

Should I offer cash for keys if the tenant owes months of rent?

Often yes. Calculate your true cost: 3 months unpaid rent + 3 months eviction process = 6 months lost income. Offering 1 month's rent to leave in 2 weeks may save you 5 months of losses.

How Much to Offer

The right amount balances getting the tenant to accept while not overpaying. Consider these factors:

Negotiation Tip

Start lower than your maximum. Most tenants expect negotiation. Offer 50-70% of what you're willing to pay initially.

The Cash for Keys Process

Cash for Keys Steps

Step 1: Make Contact

Approach the tenant calmly. Explain you want to discuss options.

Step 2: Make the Offer

Present your offer clearly. Explain the benefits for both sides.

Step 3: Negotiate

Be prepared to adjust. Listen to their concerns and timeline needs.

Step 4: Draft Agreement

Put everything in writing. Include amount, move-out date, and conditions.

Step 5: Inspection

Do a pre-move-out walk-through together. Document property condition.

Step 6: Payment & Keys

Exchange payment for keys only when property is fully vacated and inspected.

Critical Warning

NEVER pay until keys are in hand and property is verified empty. Many landlords get burned by paying upfront and having tenants refuse to leave.

Essential Agreement Terms

Your written agreement should include:

• Exact move-out date and time

• Total payment amount and payment method

• Property condition requirements (broom clean, all belongings removed)

• Key return requirements (all keys, garage openers, etc.)

• Release of all claims (tenant waives right to sue)

• Forfeiture clause if tenant doesn't comply

Do I need an attorney to draft the agreement?

Not required, but recommended for amounts over $2,000 or complex situations. Many attorneys charge $200-$500 for a simple cash-for-keys agreement.

Common Cash for Keys Mistakes

Local Requirements in Major California Cities

Local Law Notice

These requirements change frequently. Always verify current local ordinances before finalizing any cash-for-keys agreement.

What If Cash for Keys Fails?

If the tenant refuses your offer or breaks the agreement, you have options:

• Increase your offer (if it makes financial sense)

• Proceed with formal eviction

• Sell the property to a cash buyer who handles problem tenants

Skip the Hassle

Tired of dealing with problem tenants? Fast Home Buyer California purchases properties with tenants in place—no eviction needed. Call (916) 507-2502 for a free cash offer.

Frequently Asked Questions

Is cash for keys taxable income for the tenant?

Generally yes. Amounts over $600 may require issuing a 1099-MISC. Consult a tax professional.

Can I offer cash for keys after starting eviction?

Yes. Many cases settle with cash-for-keys during the eviction process. It's never too late to negotiate.

What if the tenant leaves belongings behind?

California law requires storing abandoned property for 15-18 days. Include abandoned property terms in your agreement.

Part of Our Complete Guide

Complete California Eviction Process Guide for Landlords [2026]

Read the full guide for more in-depth information on this topic.

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