Realtors frequently find themselves in the middle of cash-for-keys negotiations when representing buyers or sellers of tenanted properties. The advice they give in these situations can either smooth the transaction or create serious legal exposure. Here is what realtors need to know.
Realtors Are Not Paralegals
Cash for keys is a legal transaction governed by the Residential Tenancies Act. Realtors are licensed to facilitate real estate transactions — not to give legal advice on landlord-tenant matters. Advising a client on how much to pay, how to structure the agreement, or what happens if the tenant refuses is legal advice. Refer the client to a paralegal.
The Most Common Realtor Mistake
The most common error is facilitating an informal cash-for-keys agreement — a handshake deal or a simple letter — without proper documentation. If the tenant takes the money and stays, there is no enforceable N11, and the landlord is back to square one. The money is gone and nothing changed.
What Realtors Should Do
When a tenanted property is listed for sale and vacant possession is desired, alert the client early about the N12 and cash-for-keys options. Connect them with a paralegal before the listing or at the offer stage. Do not wait until after a firm deal is signed to discover the tenant may not leave.
Purchase Agreement Considerations
Realtors drafting offers on tenanted properties should understand how the vacant possession condition works, what happens if the tenant contests an N12, and how closing dates interact with eviction timelines. Building realistic conditions into the APS protects both parties.
When the Deal Is Already Firm
If a purchase is already firm and vacant possession is needed by closing, the pressure intensifies significantly. This is when cash-for-keys negotiations move fast and agreements get sloppy. Get a paralegal involved immediately — the timeline is tight but not always impossible.
What Comes Next
Stonegate works directly with realtors and their clients to navigate tenanted property sales. Book a free call at https://calendly.com/stonegatelegalservices/20min.
▶ Watch: N12 Application Vs Cash for Keys to End Tenancy
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