Think twice about "Cash for Keys" to rid yourself of bad tenant

[Thomas Lillevold]

Greetings everyone,

I have to inject my personal opinion here.  I recently went through a bad eviction with a commercial tenant that I inherited with a building I purchased.   And all during conversations about this with fellow landlords in our area, many of them kept suggesting I offer cash to my tenant to hand over the keys to the property and walk away nicely and quietly.   Now first let me say that in certain situations I agree that this might be an appropriate technique.   but I have to say in most situations this is very bad for our industry as a whole and here is why.  

My particular tenant had a long history of criminal convictions, property damage and small claims against him (6 to be exact)  and 2 previous evictions.   If I had not inherited this tenant with my building purchase he certainly would not have been anyone I would rent to after a background check revealed these things to me.   

Now lets say the previous 2 landlords had used the cash for keys program on this person, now there is no visibility of eviction for me to see as a future landlord.   Also what message does this send to the tenant for his next tenancy?  He certainly has to be thinking If I push back maybe I can get some money out of this along with forgiveness of past due rent.  Now he tells his friends about it and now they are doing it...it sets a bad precedence all around.  

Maybe its just the military in me but the notion of giving my non-paying tenant money to hand me back control of the property never felt right.   I considered it briefly, but only briefly and knew that this was just not the right thing to do.   I decided that I have to be ready to fight this thing out in court to stop this tenant from screwing some other landlord.  

Once again, I think in different situations this might be an appropriate technique to terminate a lease on good terms.   If I had a tenant that had good intentions and fell on hard times, I would not hesitate to use this technique to  help them out and regain control of the property faster and to not needlessly tarnish someone record.   

The eviction process was very stressful and was definitely a pain in the hind end and somewhat costly (although the courts granted me some of my attorney fees back also which was a surprise to me)....but in the end it was well worth it and now the next landlord will be able to see what he is getting into with this guy because I took the steps to go after him through the legal system rather than just pay him to go away.     

So in closing let me please say to my fellow landlords....please be careful with this technique, I feel strongly that this can be very bad for all of us.   

I welcome your thoughts and stories related to this, I think it warrants a good discussion.

Very Respectfully,

Tom