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Key Money: A Comprehensive Guide to Its Legal Meaning and Use
Definition & Meaning
Key money is a payment that landlords may require from new tenants before granting access to a rental property. This payment can serve as a form of rent or security deposit and is often sought in competitive housing markets where availability is limited. In some instances, key money is viewed as an incentive or bonus for landlords to choose a particular tenant. However, it can also be considered an illegal bribe, violating housing laws in many jurisdictions.
Table of content
Legal Use & context
Key money is primarily relevant in landlord-tenant law. It may arise in civil legal contexts, especially concerning rental agreements and housing disputes. Understanding key money is crucial for both landlords and tenants, as it can impact lease negotiations and compliance with local housing regulations. Users can find legal templates on US Legal Forms to help navigate these agreements effectively.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
(Hypothetical example) A prospective tenant offers $1,000 in key money to a landlord to secure a lease in a popular neighborhood where rental properties are scarce. The landlord accepts the payment, viewing it as a bonus for choosing this tenant.
Relevant laws & statutes
Key money regulations can vary by state. A notable case is Edamerica, Inc. v. Superior Court, which defined key money as any amount demanded by a landlord to initiate, continue, or renew a lease. Specific state laws may further clarify the legality of key money practices.
State-by-state differences
State
Key Money Regulations
California
Key money is often viewed as a bribe and is illegal in many contexts.
New York
Landlords may request key money, but it must comply with local rent control laws.
Texas
Key money is less common, but landlords may still request it in competitive markets.
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
Comparison with related terms
Term
Definition
Key Differences
Security Deposit
A sum paid to cover potential damages or unpaid rent.
Key money is often an upfront payment for tenancy, while a security deposit is refundable.
Bribe
Payment made to influence a decision illegally.
Key money can be legal in some contexts but may also be considered a bribe.
Common misunderstandings
What to do if this term applies to you
If you are a tenant facing a key money request, it's important to understand your local laws. Consider negotiating the terms or seeking legal advice. If you need assistance, explore US Legal Forms for templates that can help you draft rental agreements or respond to key money requests effectively.
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