Cash for Keys: When Your Landlord Pays You to Leave

Cash for keys is a deal in which your landlord pays you, in money, waived rent, or both, to move out by a set date and hand back the keys. You do not have to accept, and you can make a counteroffer. Before you answer, compare the offer with what moving will cost you and with any relocation payment the law would require if the landlord evicted you for a no-fault reason instead, meaning one that is not your doing, such as the owner moving in: one month's rent under California's statewide law and, in San Francisco for 2026-27, $8,245 per authorized occupant who has lived in the unit for at least 12 months. Get every term in a signed agreement, and plan for taxes on the payment.

Do you have to take the offer?

No. A buyout is a voluntary agreement, and turning it down does not end your tenancy. To make you leave, the landlord would have to end your tenancy with proper written notice and, if you stay, win an eviction case in court; eviction rules for month-to-month tenants explains the notice a landlord must give. If your unit is covered by rent control or a just-cause law, the landlord can end your tenancy only for the reasons that law lists; rent control basics explains how to check whether your unit is covered.

San Francisco, Los Angeles, and New York City require the landlord to tell you in writing that you may refuse a buyout. In San Francisco, a buyout agreement cannot be signed until 30 days after buyout talks begin; this rule excludes settlements of pending eviction lawsuits.

How to value the offer

Add up what leaving will cost you:

• Moving costs: movers or a truck, packing supplies, and time off work.
• Move-in costs: application fees, first month's rent, and a security deposit at the new place.
• Higher rent: the difference between your rent and the rent for a similar unit, times the months you planned to stay.
• What you are already owed: your current security deposit and any relocation payment the law requires.

Say you pay $2,000 a month and a similar apartment nearby rents for $2,400. Over the next two years the difference is $400 x 24 = $9,600. Add $1,500 for movers and a $2,400 deposit at the new place, and moving costs $13,500 over two years, of which only the deposit can come back, after any lawful deductions, when you later move out. An offer of $5,000 covers well under half of that.

Then compare the offer with the relocation money the landlord would owe for a no-fault eviction, such as an owner move-in:

If your landlord's only other route to an empty unit is a no-fault eviction, the relocation amount is the least it would have to pay, so an offer below it gives you less than an eviction would.

Buyout rules in San Francisco, Los Angeles, and New York City

• San Francisco. These buyout rules exclude settlements of pending eviction lawsuits. Before buyout talks begin, the landlord must give each tenant the Rent Board's pre-buyout disclosure form and file a declaration with the Rent Board. The agreement must be in writing and must state, in at least 14-point type, that you have a right not to sign and may cancel it within 45 days after everyone signs. To cancel, hand-deliver, email, or mail the landlord a written cancellation statement on or before day 45. The landlord files the signed agreement with the Rent Board between day 46 and day 59. An agreement missing a required term has no effect, and you can cancel it at any time.
• Los Angeles, RSO units. Before making an offer, the landlord must give you the city's disclosure notice, signed and dated. The agreement must be in your primary language, must state above the signature line that you may cancel within 30 days after everyone signs, and must be filed with the Los Angeles Housing Department within 60 days. If the landlord misses a requirement, you can cancel at any time and raise the violation as a defense if it later files an eviction case.
• New York City. A buyout offer must be in writing and state the purpose of the contact, that it comes from or for the landlord, that you may consult a lawyer, and that you may reject it and keep living in your home. If you tell the landlord in writing to stop, it cannot contact you about a buyout for 180 days unless you give written permission or a court allows it. Threats, contact at work without your permission, and false statements during buyout talks count as harassment.

Terms to get in writing

• The amount and how it is paid. State the total, the form (such as a cashier's check), and the timing, for example part at signing and the rest when you return the keys. If an eviction case is pending in California, the settlement form UD-155 can push your move-out date back by a set number of days for each day the landlord's payment is late.
• The move-out date and condition. Give the exact date, the cleaning standard, and what happens to items left behind.
• Rent. List which rent is waived: back rent you owe, rent for the rest of your stay, or both.
• Your security deposit. Say whether the landlord returns it in full by a set date or follows state law with an itemized statement; in California, that deadline is 21 days after you move out. See getting your security deposit back.
• Any eviction case. Require dismissal with prejudice, so the case cannot be refiled, and, where your state allows it, a joint request that the court bar public access to the record.
• References and credit. Ask for a neutral or better rental reference and a promise not to report the case to credit reporting agencies.
• What you give up. Read any release of claims closely, because it can waive claims for repairs, rent overcharges, or wrongful eviction.
• Everyone's signature. Every tenant on the lease should sign, and each should get a copy.

Negotiating with your landlord to avoid eviction covers the other terms to request when a case is already in court, and the eviction timeline shows how long a contested eviction would take instead.

How a cash-for-keys payment is taxed

The IRS treats money a tenant receives for canceling a lease as an amount realized from selling property, according to Publication 544. The lease on your home is personal-use property, so a gain on it is a capital gain, reported on Form 8949 and Schedule D; it is short term if you held the lease one year or less and long term if longer. A loss on personal-use property is not deductible.

If the deal also forgives rent you owe, the general rule in Publication 4681 is that a canceled debt counts as income unless an exclusion, such as insolvency, applies. Ask a tax preparer how to report both before you file, and set aside part of the payment until you know what you will owe.