Cash for Keys Offer Letter & Cash for Keys Agreement
Given our current economic conditions and legal constraints, many landlords are unable to effectively proceed with an unlawful detainer (eviction) while many tenants are undergoing financial distress that causes them to be unable to move or pay rent. Many landlords have decided to offer cash for keys to encourage tenants to relocate. Our attorneys experienced in real estate have drafted a cash for keys letter that we recommend landlords use in consultation with a landlord-tenant lawyer.
Cash for Keys Offer Letter Template
[Sender’s Address, Phone Number and Email]
VIA EMAIL ONLY
Phone: [Recipient’s Phone]
Facsimile: [Recipient’s Fax Number]
[Recipient’s Email Address]
Re: Cash for Keys Offer
Property Address: [Property Address]
Tenant: [Tenant Name(s)]
Landlord: [Landlord’s Name]
Dear [Mr/Ms.] [Tenant(s)],
The purpose of this letter is to, hopefully, avoid a costly civil action against you on the basis of the breach of the [lease or purchase and sale agreement] relating to the Property given that you and others are still in possession long after the 3-day notice period. It is quiet obvious who would prevail in a civil lawsuit for unpaid rent[, meaning the attorney’s fee provision under the contract could provide a very significant form of damage against you].
In an effort to avoid this unfortunate result, the Landlord is hereby offering cash for keys to you and any other occupants to promptly locate new place to live. The specifics of this offer are at the end of this letter.
As of the date of this letter, you and others are in wrongful possession of the Property and have been since after the period in the 3-day notice [or, following the close of escrow on [specify date]]. We have not received any communicated by you suggesting an intent to move. Please note that you remain liable under the lease for the rental value of the property, which could be obtained by a civil lawsuit.
[If the tenant is in possession after a sale, include the following: One definition of “fraud” by false promise in California is: “A promise made without any intention of performing it” made “with intent to deceive another party thereto, or to induce him to enter into the contract.” Cal. Civ. Code § 1572(4). Here, the fact that you failed to turn over the property and have communicated no intent to do so since the close of escrow is indicia of the lack of intent to comply with the terms of the Purchase Agreement when signed, meaning a court could conclude that you induced the buyer to sign the Purchase Agreement under a false promise. The ramifications are that the court in response to an emergency motion could order an immediate turnover of the property with the damages, by way of the lost rental value and attorney’s fees, paid to the buyer.]
To avoid these complications, the landlord will provide [specify amount, e.g., $2,000] by cashier’s check or cash in exchange for the keys and a complete turnover of the Property no later than [specify date, e.g., 7 to 10 days from the date of the letter]. The landlord can meet all occupants at the property to ensure there are no parties in possession and meet at a local bank to exchange the cash or cashier’s check for the keys.
I am glad to discuss any particulars of this offer with you at the phone number and email specified at the top of this letter.
Very truly yours,
/s/ [Sender’s Signature]
Cash for Keys Agreement
If the cash for keys offer letter works, or the occupant is otherwise agreeable to leave in exchange for payment, landlords often request an agreement to be signed by the landlord and tenant in agreeing to cash for keys. This provides documentation for the occupant that they will be paid and for the landlord that they have possession after paying. The sample cash for keys agreement below drafted under California law can be used in conjunction with consulting a real estate litigation lawyer. It is important to obtain the signature of all parties in possession of the property, whether they are on the lease or not.
CASH FOR KEYS AGREEMENT
This Settlement Agreement (“Agreement”) is made and entered into as of the date last signed below (“Effective Date”), by [Name of Landlord] (“Landlord”) and [Names of all known occupants] (“Occupant”). The Landlord and Occupant are hereinafter and, in the alternative, referred to individually as “Party” and collectively as the “Parties.”
RECITAL OF FACTS
- On or about [specify date], the Parties entered into a Lease for the property located at [specify address] (“Property”).
- On [specify date], the Landlord contacted the Occupant to request possession of the Property.
- Wherefore, the Parties desire to resolve fully any and all potential claims and disputes between them concerning the turnover of possession of the Property and have reached agreement as to the terms and conditions under which all such claims and disputes are fully and finally resolved.
TERMS OF AGREEMENT
NOW, THEREFORE, in consideration of the promises and mutual agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:
- Consideration: The Occupant shall receive the total sum of [specify amount of money to be paid in words] and 00/100 US Dollars ($[specify amount of money to be paid in numbers]) in one lump payment (the “Payment”) via cashier’s check.
- Conditions of Payment. This Agreement is subject to satisfaction of each of the following conditions:
A. On [specify date], at [specify time] local time, the Occupant will meet the Landlord at the Property.
B. The Landlord will inspect the Property to ensure that there has been no substantial material damage to the Property since the Occupant took possession. In the event that the Landlord identifies material damage to the Property, the replacement and/or installation value of the damaged property will be deducted from the Payment. If the replacement and/or installation value of any damaged property exceeds the Payment amount, then the Occupant will be personally liable for the excess cost of replacement and/or installation.
C. The Property will be left in broom swept condition.
D. Any and all personal property left by the Occupant shall be deemed abandoned.
E. If the Landlord confirms that no substantial, material damage has occurred, and the Property has been left in broom swept condition, Landlord shall provide Occupant with a cashier’s check in the amount specified in Payment set forth above in exchange for the keys to the Property.
F. The turnover of the Property by the Occupant shall be deemed a complete relinquishment of possession.
G. The Occupant hereby confirms that it disclaims any possessory or other interest in the Property and turns over said Property to the Landlord on the date set forth above.
- Releases. Contingent upon the Occupant’s compliance with its obligations under this Agreement, the Landlord, on behalf of itself and any and all of its Affiliates and their respective Related Parties, from the Effective Date through the end of time, hereby releases the Occupant, and any and all of its Affiliates, and their respective Related Parties, from any and all causes of action, claims, demands, obligations, or liabilities, including, without limitation, past or present actual, consequential, exemplary, or punitive damages (“Claims”) of whatever kind and character, in law, equity or otherwise, which relate to, or arise out of the turnover of the Property on or before the Effective Date.
As used herein, “Affiliates” means any person or entity, who/which directly or indirectly through one or more intermediaries, controls, is controlled by, or is under the common control with, either of the Parties. As used herein, “Related Parties” means the principals, officers, directors, shareholders, members, employees, partners, licensees, distributors, joint venturers, agents, and other authorized representatives of either of the Parties, and the heirs, successors, executors, trustees, and assigns of any of the foregoing.Under California Civil Code Section 1542:A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.
- Inurement. The Parties acknowledge that this Agreement will inure to the benefit of, and be binding upon, each of the Parties and any and all of its Affiliates, and its and their respective Related Parties.
- Jurisdiction, Venue, and Governing Law. This Agreement shall be controlled by and construed by the laws of the State of California in the venue of San Bernardino county, without regard to conflicts of law principles. Each of the Parties, on behalf of themselves and any and all of their Affiliates and the Related Parties of any of the foregoing, irrevocably (i) agree that the State and Federal courts in San Bernardino County, California, shall have the sole exclusive jurisdiction and venue over any suit or other proceeding relating to, arising from, or based upon this Agreement; (ii) consent to venue in such courts; and (iii) consent to personal jurisdiction in such courts.
- Severability. The Parties believe this Agreement does not contain any provision contrary to applicable law. However, if any part of this Agreement shall be determined to be illegal, invalid, or unenforceable: (i) that part shall nevertheless be enforced to the extent permissible in order to effect the intent of the Parties; and (ii) the remaining parts shall be deemed valid and enforceable, so long as the remaining parts continue to fulfill the original intent of the Parties.
- Waiver/Amendment. No delay or failure by either Party to exercise its rights under this Agreement shall be construed as a waiver thereof, unless memorialized by written instrument signed by all Parties. The agreed waiver of any covenant, condition, or agreement to be performed hereunder shall not be construed to be a continuing waiver of the same covenant, condition, or agreement or the waiver of a different covenant, condition, or agreement. Furthermore, the agreed waiver of any breach of this Agreement shall not be considered to be the agreed waiver of a different or subsequent such breach. No provision of this Agreement may be amended or otherwise modified in any manner unless agreed to in writing signed by or on behalf of each of the Parties.
- Representations and Warranties. The Parties, and each of them, on behalf of themselves and their respective Affiliates, and the Related Parties of any of the foregoing, each warrant and represent that: (i) this Agreement is freely and voluntarily entered into, and that each of the Parties has had an opportunity to consult with counsel with respect to the advisability of entering into this Agreement; (ii) no promise, inducement, or agreement not contained in this Agreement has been made on any subject in connection with this Agreement; (iii) each Party has made such investigation of the facts pertaining to this Agreement and of all the matters pertaining thereto as it deems necessary; (iv) each Party’s signatory to this Agreement is fully authorized to execute this Agreement; (v) each Party has all necessary power and authority to enter into the releases contained herein; and (vi) the Parties jointly participated in the drafting of this Agreement, with the result that any ambiguity contained therein shall not be interpreted or construed against either Party as the drafter thereof.
- Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which, taken together, shall constitute one and the same Agreement. For purposes of execution, facsimile signatures and signature pages sent through electronic mail shall be considered effective and binding.
AGREED TO AND ACCEPTED:
Landlord: [Name of Landlord] Date: [Date]
Occupant: [Name of Tenant or Other Occupant] Date: [Date]
Notice: Please contact an attorney to advise you of your rights upon an assessment of the facts in your case before using these templates. If you are trying to terminate a commercial lease where the terms can be complex and the amount in dispute can be significant, it is strongly advised that you contact a commercial real estate lawyer to consider all of your options.