Pema Zela found herself in a challenging situation when her tenant refused to vacate the home she owned in Toronto’s east end. Despite the lease being expired, the tenant stopped paying rent and tried to negotiate with Zela. He asked for $50,000 to leave the property when Zela and her husband needed to move back into their home.
Zela’s experience is an example of “cash for keys,” a legal arrangement where a tenant requests or a landlord offers money to peacefully vacate a property at an agreed-upon time. However, due to long delays at the Ontario Landlord and Tenant Board, some tenants are now demanding higher sums than ever before.
Zela initially filed for eviction in June 2022 but was informed that she might have to wait up to a year for a hearing. During this time, the tenant stopped paying rent and utilities. Although he eventually moved out, he left Zela with more than $40,000 in unpaid rent and expenses.
Tenant advocate Geordie Dent acknowledged that some tenants are leveraging delays at the Landlord and Tenant Board to negotiate better cash-for-keys deals. However, he also pointed out that rents in Toronto have skyrocketed, making it crucial for tenants to receive fair compensation in today’s rental market.
The Landlord and Tenant Board faced severe criticism for its backlog, with over 38,000 pending cases, predominantly involving landlords awaiting hearings. These delays have contributed to the rise in cash-for-keys agreements.
Paralegals specializing in landlord-tenant cases have reported a significant increase in cash-for-keys demands over the past few years. Some tenants are asking for amounts exceeding $100,000, land purchases, or property acquisitions as part of the deal.
Norma Da Silva, another landlord, faced a cash-for-keys situation when her tenant demanded a substantial sum to vacate a loft she was renting out. Rising interest rates forced Da Silva to sell the property, and the tenant’s demands disrupted the sale process.
Delays in landlord and tenant boards across the country have exacerbated the prevalence of cash-for-keys deals. As rents continue to rise, tenants are more inclined to demand higher compensation when forced to move. Experts predict that these trends will persist unless substantial changes are made to address the housing crisis.
The Landlord and Tenant Board has taken steps to reduce wait times by appointing additional adjudicators, with confidence that delays will decrease in the coming year. However, the system’s inefficiencies have left landlords like Pema Zela feeling isolated and frustrated, emphasizing the need for reform and accountability within the rental housing sector.