Cash for keys in Ontario: is it worth paying your tenant to leave?

Cash for keys calculator: is it worth paying?

Selling tenanted: a lower price (only investors can buy), and the rent keeps coming in until closing. Paying cash for keys: the full empty price, but a few months of costs with no rent, a refresh and the offer itself. The break-even offer is the most you can pay before selling tenanted would have netted more. Both sides use a flat fee MLS® listing, so the commission doesn't tip the result.

A worked example

A home worth $800,000 empty, rented for $2,400 a month, with $2,500 a month in costs, and buyers paying 5% less with the tenant staying (the calculator's starting numbers):

What cash for keys means in Ontario

Ontario has no law called "cash for keys". A tenancy "may be terminated only in accordance with this Act", and no notice is needed "if a landlord and a tenant have agreed to terminate a tenancy" (Residential Tenancies Act, section 37). Cash for keys is that agreement, with a payment that makes it worth the tenant's while. You both sign the Landlord and Tenant Board's N11, Agreement to End the Tenancy, with a move-out date you both accept.

The tenant can always say no. An agreement to end the tenancy is void if it was signed when the lease was, or as a condition of renting (section 37(5)), and a landlord "shall not harass, obstruct, coerce, threaten or interfere with a tenant" (section 23). Since July 1, 2026, an offence under the Act can mean a fine of up to $100,000 for a person and $500,000 for a corporation (section 238) (RTA).

How to do it, step by step

1. Talk to your tenant before you list. Say you're selling, explain their rights (the lease carries on with a buyer), and ask whether a paid move would suit them.
2. Agree the amount and the date. A date that suits them (after school ends, when their new lease starts) is often worth as much to them as the money.
3. Put the deal in writing: the move-out date, the amount, that it's paid when the keys come back and the unit is empty, the condition you expect it in, and what happens to the last month's rent deposit and its interest.
4. Sign the N11 with the same date. Keep a copy each.
5. Pay on the day the keys come back, not before. Get a signed receipt.
6. If the tenant doesn't leave, you can file an L3 with the LTB without notice to the tenant, no later than 30 days after the agreed date (section 77; L3 instructions). The tenant can ask to set the order aside within 10 days, so keep the signed N11 and your agreement safe.

How much should you offer?

There's no set amount: it's whatever you and your tenant agree. What moves it:

• Their rent against today's rents. A tenant paying well under market will pay more for their next home, so they'll need more to move.
• What your other route costs. If your buyer will move in, a purchaser's N12 costs one month's rent, but only after a firm sale and with at least 60 days' notice, and a disputed case can take months at the LTB.
• Their moving costs and timing. Covering the movers or a free last month can count for as much as cash.
• Offers can be large and still refused: a Toronto brokerage reported a $20,000 offer turned down by a tenant who wanted more (Move Smartly, March 2024). Use the calculator's break-even offer as your ceiling: past it, selling with the tenant in place nets you more.

Cash for keys vs an N12 or N13

Only an agreement works at any time and for any home. The notices each have a narrow use:

Mistakes to avoid

• Paying before the keys come back. If the tenant stays, getting the money back means another hearing.
• An N11 signed with the lease. It's void (section 37(5)), whatever the tenant agreed to at the time.
• Pressure. Cutting services, repeated visits or threats to make a tenant sign can be harassment under section 23.
• Serving an N12 you don't qualify for to save money. If it's in bad faith, the LTB can order up to 12 months' rent, moving costs and a fine (section 57).
• Forgetting the deposit. The last month's rent deposit pays the last month of the tenancy (section 106); settle it, with its interest, in the agreement.
• Assuming a fixed-term lease just ends. At the end of the term it renews month to month unless the tenancy is ended under the Act (section 38).

Selling once it's empty with a flat fee MLS® listing

• A flat fee MLS® listing puts your home on the MLS® System and realtor.ca from $99.99 for 2 months, plus HST. Buyer agents' showing requests and offers come straight to you.
• Keeping the tenant instead? Read selling a house with tenants in Ontario: the lease goes with the sale, and showings need 24 hours' written notice.
• Selling a rental means tax on the gain: see capital gains tax on a rental property. Not sure whether to sell at all? Try the rent vs sell calculator.

Before you sign

This page is general information, not legal advice. Before you make an offer or sign an N11, talk to a real estate lawyer or a licensed paralegal, especially if the tenant has been there a long time, there's more than one tenant, or the sale has a firm closing date. If you'd rather serve a notice, see how the N12 works in Ontario, including the new 120-day rule.

Cash for keys: questions

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