Key Takeaways
- Cash for keys is a voluntary deal where a landlord pays a tenant to leave by an agreed date. It’s lawful as long as the tenant is free to say no.
- Since Section 21 was abolished on 1st May 2026, it has become one of the quickest ways to recover a property where no possession ground clearly applies.
- The tenancy should be ended by a properly drafted surrender, and payment should only be made once the keys are back and the property is empty.
- Pressure, threats or cutting off services can turn an offer into harassment, which can lead to prosecution or a civil penalty of up to £40,000.
Maybe you need to sell. Perhaps a family member needs somewhere to live. Or your property might need major work. But the tenant pays on time and hasn’t done anything wrong, so there’s no quick legal route to getting the property back.
Since Section 21 was abolished, that situation has become far more common. Using the new possession grounds can mean months of notice followed by months waiting for court, and some come with a ban on re-letting. So more landlords are asking a simple question: would it be quicker and cheaper to pay the tenant to leave?
Quite often, it can be. But a cash for keys deal done badly can leave you out of pocket with the tenant still in the property, or worse, facing a harassment complaint. This guide explains when an offer makes sense and how to set one up properly. If you’d like advice on your own situation, Osbourne Pinner offers a free 30-minute consultation with our landlord and tenant solicitors.
What is a cash for keys agreement?
It’s an agreement where you pay the tenant an agreed sum, and in return they hand back the keys and leave by a set date. There’s no special statute behind it. Legally, it’s a voluntary deal that ends the tenancy by agreement, usually through a formal surrender.
Offering one is lawful. But what makes it lawful is that the tenant chooses to accept. If they say no, the tenancy carries on and you’re back to the normal possession process.
Why has cash for keys become more common?
Because the alternatives have become slower and more restrictive. Since 1st May 2026, every private tenancy in England is periodic, and a landlord needs a specific ground to recover possession. If you want to sell or move in, the relevant grounds need four months’ notice and can’t be used in the first year of a tenancy. If the tenant doesn’t leave, you then need a court order, and possibly bailiffs.
There’s also a catch after possession. If you recover the property to sell or move in, you can’t re-let it for 12 months, and breaking that rule can lead to a penalty of up to £40,000. A negotiated exit avoids those restrictions entirely, because the tenant leaves voluntarily rather than on a possession ground.
When does offering cash for keys make sense?
Think about what the alternative would cost you. Months of notice, court fees, legal costs, a possible wait for bailiffs and the risk of the claim failing on a technicality all add up. Against that, a payment that gets you vacant possession quickly can be good value. It tends to work best where:
- You need the property back quickly, for example to complete a sale with vacant possession.
- No possession ground clearly applies, or the ground you’d rely on is open to challenge.
- The tenant has somewhere to go and the money would help with moving costs or a deposit.
- Relations are still civil enough to talk.
- A possession claim is already under way and a settlement would save the time and cost of a hearing.
When might it not be the right choice?
Of course, it isn’t always the answer. If the tenant owes serious arrears and you have a strong mandatory ground, a court claim could be the better route. If the tenant simply can’t find anywhere else to live, money alone won’t solve the problem. So, they may feel they have to wait for a court order before the council will help them.
There’s also a risk in paying before the tenant has left. If they take the money and stay, you might be left trying to recover the payment while still needing a possession order. That’s why the structure of the deal matters so much.
How much should you offer?
There’s no set figure. The right amount depends on what the deal saves you. For example:
- Lost rent
- Legal costs
- The time the property would sit empty
- Where relevant, the cost of the 12-month re-letting restriction you’d avoid
Most offers are pitched around the tenant’s practical costs of moving too, such as removals and a deposit on a new home.
Money doesn’t have to be the only part of the offer though. Writing off modest arrears, agreeing to return the deposit promptly or allowing a moving date that suits the tenant can all make an offer more attractive.
How do you make the agreement watertight?
A handshake deal is where most problems start. A properly documented agreement should:
- Record the surrender in writing, ideally as a deed, signed by every tenant named on the tenancy and every landlord.
- Set a clear date by which the tenant will leave and return all keys.
- Make payment conditional on the tenant leaving, paid only once the keys are back and the property is empty.
- Deal expressly with any rent arrears and with the return of the deposit through the protection scheme.
- Include a check-out inspection, meter readings and photographs at handover.
A surrender needs clear agreement from both sides. As Shelter’s legal guidance on surrender explains, an informal surrender depends on actions by both landlord and tenant that are clearly inconsistent with the tenancy continuing, which is why a written deed is much safer.
Remember that signing the agreement doesn’t give you the right to remove the tenant. If they don’t leave on the agreed date, you don’t pay, but you’ll still need a court order to recover possession.
Where is the line between an offer and harassment?
An offer the tenant is free to refuse is lawful. Pressure isn’t though. Under the Protection from Eviction Act 1977, it’s an offence to do things likely to interfere with a tenant’s peace or comfort in order to make them leave. Repeated visits or calls, threats, deadlines designed to intimidate or letting repairs slide to wear the tenant down can all cross that line.
Since 1st May 2026, local authorities can impose civil penalties of up to £40,000 for harassment and illegal eviction. Put your offer in writing, give the tenant reasonable time to consider it, encourage them to take advice and keep a record of every conversation.
What if the tenant says no?
Then you’ve lost nothing except time. The tenancy continues, and you can still use the normal possession process if you have a valid ground. To find out more, our guide on how to evict a tenant after Section 21 was abolished explains the grounds available and the notice each requires. Additionally, our possession orders and claims team can take the claim forward if negotiation doesn’t work.
Get help with a cash for keys agreement
A poorly drafted agreement can leave you having paid out with the tenant still in place, and a heavy-handed approach can expose you to a harassment complaint. Getting the offer and the paperwork right from the start protects both your money and your position.
At Osbourne Pinner, our landlord and tenant solicitors advise landlords on negotiated exits, draft surrender agreements and take possession claims forward when a deal isn’t possible. We’ll explain your options in plain English and give you a clear view of costs before you commit to anything.
Please note that this article is for informational purposes only and does not constitute legal advice. We always recommend speaking to a qualified solicitor for advice tailored to your specific circumstances.
We offer a free 30-minute consultation to discuss your situation, Monday to Friday. You can speak with us via video call or visit our offices in Piccadilly Circus, Canary Wharf, Wimbledon, Harrow or Manchester. To arrange your consultation, call 0203 983 5080, email [email protected] or complete the form below. We do not offer Legal Aid.
