Delinquent Tenants: The Pain & Gain of Cash For Keys

[Franklin Spees]

Although it can often be an economically superior alternative to pay your delinquent tenants to move out, it can also be personally and morally challenging out of principle.  What might have been $750 to an UD attorney and 45 more days of no rent...can be mitigated by offering $500 cash for them to be out in 72 hours.  I've done it both ways and I often have mixed feelings about it regardless of how it plays out.  Specifically with the cash for keys approach--although it can potentially save time and money, it could also be releasing and virtually encouraging a bad tenant to go and find another unsuspecting landlord who will not see any of their past on the credit check.  

Anyone else have strong feelings either way on this issue?

[Marcia Maynard]

We've never done Cash for Keys, but we keep it in our back pocket as an option. However, we have assisted a move-out by providing a truck and movers to get people moving in the right direction... out.  

Making a move-out plan with the tenant's help has worked well for us too.   We ask ourselves the question... What would it take to get a person to move on their own, especially when they have nowhere else to go? If the tenant will engage in a discussion, there is a much better chance of the move-out going as good as could be expected.... mitigation of damages too.

In twenty years, with 15 units, we have only had three evictions that went to court for unlawful detainer. Those tenants had something in common besides not paying rent.... they had no where else to go and lacked a support network to help them.  They stayed until the Sheriff lock-out day.  When people move-in, I now gather information about their support network, and keep their emergency contact names and numbers up to date during their tenancy.

This week I was reviewing the tenant files in our "bad move outs" file box. (I use red hanging files for these!) I talked with a collection agency and will be taking those files that are still owing money to collections.  I've never done this before and it is a bitter sweet feeling. A few owe us over $2,000, a few owe us over $1,000, and a few $500 or less. I don't expect to recoup much, if anything, but at least I will have tried to recover all I could and at the same time put a warning out for others, as it will show up on the tenant credit reports. Some of the files are somewhat stale, but still within the statute of limitations for our state. I just finally got tired of people "stealing" from us by not paying rent or costing us a significant amount due to damages, with little or no consequences.