Updated October 3, 2026 · DF Property Management
What cash for keys is
"Cash for keys" is a negotiated agreement: the tenant agrees to move out by a set date, and the landlord pays them — or waives arrears, covers moving costs, provides a reference, or some combination. It works because Ontario law lets a landlord and tenant agree to end a tenancy at any time, even in the middle of a lease.
The legal vehicle is Form N11, Agreement to End the Tenancy. There's no statutory payment amount; the price is whatever both sides accept.
When owners use it
- Selling a plex or condo vacant, when buyer timelines don't fit the 60-day N12 process.
- Major renovation, where an N13 means 120 days' notice, permits, compensation and, in Toronto or Hamilton, a municipal licence.
- A tenancy that isn't working, where a hearing would be slow and uncertain.
- Repositioning a rent-controlled unit: once a unit is vacant, rent for the next tenancy is set by agreement.
The hard limits
- It must be voluntary. Harassing, threatening or pressuring a tenant to leave is an offence; maximum fines rose on July 1, 2026 to $100,000 for individuals and $500,000 for corporations. The tenant can also file a T2 application.
- No N11 as a condition of renting. You can't require a tenant to sign an agreement to end the tenancy when they move in, with narrow exceptions such as some student housing.
- Every tenant signs. An N11 signed by one of two co-tenants won't end the other's tenancy.
- It doesn't launder a bad notice. If you've already served an N12 or N13, an exit agreement won't necessarily protect you from a bad-faith claim if the stated plan was never real.
Negotiating
- Know your alternative — Price the formal route: compensation (one to three months' rent for most N12 and N13 notices), months of lost time, possible hearing costs, and municipal licence costs and rent-gap payments if you're renovating in Toronto.
- Open the conversation in writing — Polite, specific, no deadlines that read as threats. Make it clear the tenant can say no.
- Encourage independent advice — A tenant who has spoken to a legal clinic or lawyer is far less likely to challenge the deal later.
- Put a full offer on the table — Amount, move-out date, payment timing, how the last month's rent deposit is handled.
- Expect a counter — Tenants weigh moving costs and the rent gap to a new unit; many deals turn on timing as much as money.
- Sign everything at once — The N11 and a written settlement agreement, signed by all tenants and the landlord.
What to document
The N11 records the termination date and nothing else. A separate settlement agreement should cover:
- the payment amount, method, and exactly when it's paid;
- whether rent continues until move-out or is waived for a period;
- how the rent deposit and its interest are applied;
- the condition the unit is left in and the return of every key and fob;
- a mutual release of claims, if agreed;
- what happens if the tenant doesn't leave on time.
Structuring the payment
The safest structure pays most or all of the money at vacant possession: the tenant hands over the keys, you inspect, and payment follows immediately by a traceable method. If the tenant needs money up front for first and last at their new place, keep that portion small and say in writing how it's treated if they don't leave. Payments to tenants may have tax implications; ask your accountant how to record them.
If the tenant doesn't leave
A signed N11 lets you apply on Form L3 — any time after the agreement is made, and no later than 30 days after the termination date. The LTB usually issues an eviction order without a hearing, which you then file with the Court Enforcement Office (Sheriff).
The tenant can ask the LTB to set that order aside, normally within 10 days. Since September 21, 2026, the LTB may do so only if it isn't unfair, and it can't consider changes in the tenant's circumstances that happened after they signed. A clear, voluntary, well-documented agreement is what holds up.
A worked example
An owner of a Toronto triplex wants the main-floor unit vacant before listing. The formal route is an N12 for a buyer, available only after an accepted offer, with 60 days' notice and one month's rent in compensation — and a hearing if the tenant disputes it. Instead, the owner offers a payment equal to several months' rent, a move-out date that lines up with the tenant's search, and the last month covered by the existing deposit. Most of the payment is made when the keys are returned and the unit is inspected. Everyone signs an N11 and a short settlement agreement the same day. If the tenant doesn't leave, the owner has an L3 route to an order without a full hearing.
The numbers in any real deal depend on the unit, the rent gap and the timeline. The structure is what carries over.
After the tenant leaves
Walk the unit with the tenant if you can, collect every key and fob, take dated photos, and confirm in writing that the payment was made. Keep the signed agreement, proof of payment and handover photos together in one file. If the unit will be re-rented, the new rent is set by agreement with the next tenant; if it's being sold, buyers will want to see the signed N11.
Risks and how to reduce them
| Risk | How to reduce it |
|---|---|
| Tenant takes the money and stays | Pay at key handover; minimal up-front amount |
| Agreement challenged as pressured | Written, unhurried offer; time and encouragement to get advice |
| One co-tenant didn't sign | Every tenant on the lease signs the N11 |
| Unit damaged on the way out | Condition and inspection written into the agreement |
| Missed L3 deadline | Calendar the date 30 days after termination |
How we can help
We can manage the conversation, the paperwork and the handover, then carry the unit through turnover — whether it's being re-let, renovated or held as a vacant property before a sale. Our compliance service keeps the file in order, and the LTB guide explains the L3 route.
General information, not legal advice. Both sides should consider independent advice before signing an agreement to end a tenancy.