Cash for keys is not always the right move. It costs money upfront, it requires the tenant to agree, and a badly structured deal can still fall apart. But in the right situation, it gets you vacant possession faster and cheaper than the LTB. Here is how to think about it.
The Core Math
To assess whether cash for keys makes sense, compare the cost of the payment against the alternative. If an LTB process will take 9 months and the tenant pays below-market rent, the lost income during that period — plus filing fees and paralegal costs — may exceed a reasonable cash-for-keys amount. Run the numbers before assuming the LTB is cheaper.
When Cash for Keys Is the Right Call
Cash for keys works best when the tenant is rational and motivated to leave, when you have a clear financial reason to want vacant possession quickly (a sale, a renovation, market rent gap), and when the LTB process for your situation would be unusually long. It is also worth considering when the N12 is legally complex or risky.
When Cash for Keys Does Not Work
If the tenant is using the negotiation as a delay tactic with no intention of leaving, cash for keys becomes a costly distraction. If the amount demanded is unreasonable and the LTB route is relatively clean and fast (as with an L1 for clear arrears), the LTB may be the better option.
What a Good Cash for Keys Deal Looks Like
A properly structured cash-for-keys deal includes: a written N11 or mutual agreement to end the tenancy, a clear payment schedule tied to key handover, a defined move-out date, and no payment in full until the keys are received and the unit is vacant. Do not pay in full before the tenant leaves.
The Role of a Paralegal
A paralegal can help you evaluate whether cash for keys or the LTB is the right path for your situation, negotiate the agreement on your behalf, and draft the documentation correctly. A poorly drafted cash-for-keys agreement is worse than no agreement.
What Comes Next
Stonegate helps Ontario landlords evaluate and structure cash-for-keys agreements. Book a free call at https://calendly.com/stonegatelegalservices/20min.
▶ Watch: N12 Application Vs Cash for Keys to End Tenancy
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