My tenant is extorting me for cash-for-keys. Will the new laws help me?

When most landlords talk about new laws these days, in reference to Landlord and Tenant matters, they tend to be talking about the changes to take effect under The Fighting Delays, Building Faster Act, 2025 (Bill 60).

Bill 60 does NOT regulate, cap, or eliminate “cash-for-keys” issues. What this means is that if your tenant is demanding $20K, $50K, or more to leave…, the new laws will not stop that. It’s important to note though that some of the Amendments to the Residential Tenancies Act to be implemented may help to change the leverage dynamic in some important ways.

What is cash-for-keys?

A “cash-for-keys” deal is simply a voluntary agreement where a tenant agrees to leave in exchange for money. There is nothing illegal about it, even if the amount feels outrageous. The real issue is leverage because the truth is that the tenant has security of tenure and the landlord faces delay at the Landlord and Tenant Board (although this may not be as significant as we have seen previously). The result is that the tenant can demand a premium to leave. This is what landlords often call “extortion”, but legally, it’s negotiation.

What Bill 60 actually changes for these deals

Fighting Delays, Building Faster Act, 2025 was designed to speed up the system, not eliminate these deals. However, some of the below changes, once implemented, will likely help to reduce the delay leverage tenants once had.

1. Faster eviction timelines (especially for arrears)

• Notice period reduced

• Landlords can move to applications faster

2. Faster hearings at the LTB

• More streamlined procedures

• Shorter wait times expected

So… will Bill 60 stop “cash-for-keys extortion”?

No and here’s why:

Cash-for-keys exists because of three structural realities:

1. Tenants have strong security of tenure

2. “Own-use” evictions (N12) still carry risk (bad faith claims)

3. Litigation is uncertain and time-consuming

Bill 60 doesn’t eliminate any of these. If implemented effectively, it could:

• Reduce delays → less incentive for tenants to hold out

• Increase predictability → landlords more willing to litigate instead of pay

• Slightly rebalance negotiating power

Realistically it may reduce the size of buyouts but may not necessarily eliminate them altogether.

Top Tips:

1. Don’t assume the tenant’s demand is enforceable. It’s just a number and not a legal entitlement.

2. Run the numbers:

·         Time to LTB hearing

·         Legal costs

·         Risk of bad faith claim

·         Lost opportunity cost

3. Then compare to the buyout demand.

4. Be careful with “own use” (N12). Bad faith findings can carry serious penalties.

Bill 60 is not a silver bullet for landlords facing aggressive cash-for-keys demands. While it aims to speed up the eviction process and reduce delays at the Landlord and Tenant Board, it does not regulate buyouts or prevent tenants from negotiating large payouts. At best, it may gradually reduce tenant leverage but for now, cash-for-keys remains a reality of Ontario’s rental market.