Cash for Keys in Toronto Real Estate: A Guide for Landlords and Tenants
Understanding ‘Cash for Keys’ Deals
As an experienced Toronto realtor, I’ve seen a growing trend developing called ‘Cash for Keys’ which is an agreement where landlords offer tenants a sum of money in exchange for vacating the rental property. This is a common practice in Toronto’s real estate market, often seen as a quicker alternative to the eviction process. While these deals can benefit both parties, understanding their legal and practical implications is crucial.
Legal Background and Tenant Rights in Ontario
In Ontario, the Residential Tenancies Act (RTA) governs tenant-landlord relationships. This act provides robust protections to tenants, including the stipulation that only the Landlord and Tenant Board (LTB) can order evictions. For a landlord to evict a tenant for the purpose of selling the property, they must adhere to a strict process outlined in the RTA. The tenant, meanwhile, is entitled to certain rights, such as receiving an N12 form (Notice to end tenancy due to personal use by the landlord, a purchaser, or a family member) and compensation.
The Process of ‘Cash for Keys’ Agreements
In a ‘cash for keys’ deal, landlords and tenants may negotiate a settlement without involving the LTB. These agreements are not covered under the RTA, meaning they operate outside the standard legal framework. Landlords might offer these deals to expedite the process of reclaiming their property, especially given the lengthy periods (up to a year) it can take for L2 (Application to end a tenancy and evict a tenant) forms to be processed by the LTB. Tenants, on their part, should thoroughly research market rents and moving costs to negotiate a fair deal.
Negotiating a Fair ‘Cash for Keys’ Deal
For tenants, the key to a fair ‘cash for keys’ agreement lies in understanding the current rental market and the financial implications of moving. It’s not uncommon for landlords to initiate these deals, particularly when they need the property urgently. It’s crucial for tenants to be aware of their options and seek legal advice before agreeing to any terms outside a board-mediated negotiation.
The Risks of ‘Cash for Keys’ for Tenants
While ‘cash for keys’ offers a quick solution, tenants must be wary of potential bad faith evictions. Landlords in Ontario are prohibited from using these deals to evict tenants only to re-rent the unit at a higher rate within a year. Tenants suspecting bad faith should gather evidence and exercise their right to a hearing before the LTB.
Conclusion: Is ‘Cash for Keys’ Right for You?
Whether you’re a landlord or a tenant in Toronto’s real estate market, understanding the nuances of ‘cash for keys’ deals is essential. These agreements can offer a practical solution in certain situations but require careful consideration and, ideally, legal consultation. Being informed and aware of your rights and responsibilities under the RTA is the key to navigating these agreements effectively.
