Cash-for-Keys Agreements in Ontario: How to Negotiate and What to Watch For
A cash-for-keys deal is an agreement where a landlord pays a tenant to voluntarily leave. Common in N12 personal-use and renovation situations, these deals c...
Frequently Asked Questions
How much should a cash-for-keys payment be?
There is no fixed formula. In Ontario in 2026, buyouts typically range from two to twelve months' rent. The amount depends on how far below market the tenant's rent is, how long they have lived there, moving costs, and the landlord's alternative (the cost and delay of an LTB eviction). One month's rent is generally too low — that is the statutory minimum under an N12.
Do I have to accept a cash-for-keys offer?
No. Cash-for-keys is entirely voluntary. A tenant is never required to accept a buyout. If the landlord wants the tenant to leave and the tenant declines the buyout, the landlord must follow the formal eviction process through the LTB.
Should I sign an N11 as part of a cash-for-keys deal?
An N11 (Agreement to Terminate) is commonly signed alongside the cash agreement. It gives the landlord LTB enforcement if the tenant does not vacate. Never sign an N11 without a written, signed cash-for-keys agreement — and never sign an N11 before payment is secured.
Is a cash-for-keys payment taxable?
The tax treatment is uncertain. The CRA has not issued definitive guidance. The payment may be treated as a capital receipt or other income. For significant amounts, both the tenant and landlord should consult a tax professional. This article does not constitute tax advice.
What if the landlord doesn't pay after I move out?
If you moved out based on a written cash-for-keys agreement and the landlord did not pay, you can sue in Small Claims Court for breach of contract. This is why payment should always be secured before or simultaneously with key return — never after.
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