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 Member Update
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back rent and this should be stipulated in any written “cash for keys” agreement.
Understand the Tenant’s Point of View
Sometimes landlords get ahead of themselves. They think that tenants aren’t paying rent because they are entitled. Or sometimes landlords think that a tenant is taking advantage of the system. A landlord might think that if my tenant doesn’t eat out every day or drive a new car then they could ‘just pay the rent’. Sure, there might be some truth to that, but as a landlord, you can’t dictate where your tenant’s paycheck goes. Once you have a better understanding of what your tenant is going through, you can then move on towards the next step which is starting the difficult conversation about vacating the premise.
Start the Conversation With Your Tenant in a Positive Light
Saying something like “I know that you haven’t been able to pay rent, and I understand you are going through some financial hardship, but at the current time you are in default of your lease terms” is a good way to begin a conversation.
This conversation can lead into the conversation about letting your tenants know their options.
Give Your Tenant the Option to Come Current on Their Rent or Vacate
After having a conversation regarding the amount of back rent owed, you can move toward a discussion of either a repayment plan or termination of tenancy. Remember that your tenants have rights and you, as a landlord, cannot threaten or harass your tenants. Give your tenant a date by when they can start making payments. If this option does not work, then you can conclude that a tenant is not making a good faith effort to come current with their back rent (or cannot), and the best option is to ask them to leave.
I’ve done many “cash for keys” deals in my career, and none of them are the same. I would say that the most important aspect is understanding the tenant’s point of view. You are giving them cash (or forgiving back rent), you aren’t going to go to court so they will not have an eviction on their record, and you are helping them start with a clean slate.
 King George Property Management Solutions is a Los Angeles based property management corporation. The organization has been in business since 1993. They manage a diverse portfolio and work with owners to ensure a profitable and streamlined operations – with technology put in place to increase tenant satisfaction and retention. To learn more about their services, please visit their website:
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