Helping Florida Clients Benefit from Timely Relocations
Foreclosure is an unfortunate situation for everyone involved, but sometimes, there is no other solution to resolving a defaulted mortgage or rental agreement. Once a foreclosure has occurred, the lender involved will want to close out the relationship with the previous owner or renter as efficiently and painlessly as possible. Sometimes, for one reason or another, the previous owner and renter may refuse to depart despite a legal foreclosure. This creates an uncomfortably hostile scenario where forcible eviction may need to be pursued.
Obviously hoping to avoid this scenario, lenders want the vacating of the property to be as conflict-free as possible. One potential means of achieving this is employing what is called “cash for keys,” in which the lender negotiates to pay a flat sum to the outgoing occupants once they physically depart the property, leaving it in good condition. This both incentivizes the occupants to depart in a timely manner and gives them a financial cushion as they plan their next steps.
If you are a lender or the occupant of a foreclosed property and considering a cash-for-keys agreement, our Tampa cash-for-keys lawyers at Cremeens Law Group PLLC can help. We can help negotiate the terms of the deal, draft and review the necessary paperwork, and assist in any further legal action necessary to execute the agreement.
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How Cash for Keys Agreements Work
This sort of agreement can be described as a show of “good faith” between both the lender and the occupants of the foreclosed property. The written agreement should specify a monetary amount the occupants will be entitled to should they permanently depart the property in question on a particular date. Payment is typically remitted once the occupants have physically left and the property has been inspected, hence the literal descriptor “cash for keys.”
Cash for keys agreements will usually stipulate that the occupants cannot retaliate against the foreclosure, meaning they cannot vandalize the property or strip it of any elements (like light fixtures). Occupants will also typically be required to not leave belongings behind and leave the property in an acceptably clean condition, sometimes referred to as “broom swept” condition.
The amount of the payout can vary but is often dependent on how quickly the lender would prefer the current occupants exit. A few thousand dollars is common, especially for prompt deadlines, but smaller amounts might be offered if there is no rush to vacate. Beyond the obvious incentive, the money is intended to give the outgoing occupant funds to hire a moving company and manage other expenses relating to relocating.
How and Why Cash for Keys Agreements Happen
It is important to understand that there is no situation where a lender is obligated to offer a cash for keys agreement. There are several reasons why a lender might nevertheless be proactive in offering one.
Some of the reasons a lender may proactively offer a cash for keys agreement include:
- They want to avoid an expensive and lengthy eviction process
- They already have plans for the property that cannot be undertaken until the current occupants depart
- They want to avoid retaliatory damage to the property
If a lender does not offer a cash for keys agreement on their own, the current occupant might request one. A negotiation is often involved in either situation, both on the date of moveout and monetary incentive to do so. Occupants can sometimes have more leverage than they realize, as while they can eventually be evicted for refusing to vacate a foreclosed property, it takes substantial time and money for the lender to do – a process they very much would prefer to avoid.
Occupants considering a cash for keys offer should be aware that signing any agreement will limit some of their other legal options going forward. Most cash for keys agreements will confirm that the lender is now the owner of the property, for example, meaning occupants will no longer be able to defend themselves in a foreclosure suit.
Occupants should also ensure that accepting the agreement includes absolution from any outstanding amount they owe on the property. Finally, note that money acquired through a cash for keys agreement qualifies as taxable income, and your lender will likely report the transaction to the IRS.
Let an Experienced Team Assist with Your Cash for Keys Agreement
Whether you are a lender or an occupant of a foreclosed property, our Tampa cash for keys attorneys at Cremeens Law Group PLLC are prepared to help you find a favorable resolution. We have considerable experience in negotiating for both sides in these transactions and are empathetic to the stresses inherent to leaving a home. Our goal is to make sure the vacating and relocation is as painless as possible, and, as your legal representative, we can assist in negotiating the monetary amount and date of your cash for keys agreement.
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