| When Renting To Tenants key Money will pay | | | | ratio used goes from 0 (poor locations) to 12 |
| your bills and make it hard for them to fight | | | | (top locations e.g. Champs Elysées). |
| you in court because it is near untracable. | | | | Remaining number of years of the contract has |
| Key money is used differently in different | | | | little/no impact unless it falls under the |
| parts of the world and sometimes means money | | | | legal provision of "déplafonnement du |
| paid to an existing tenant who assigns a | | | | loyer", meaning the owner is automatically |
| lease to a new tenant where the rent is below | | | | legally allowed to ask for a new rent |
| market. In other parts of the world it is | | | | irrespective of the rent paid so far : |
| used synonymously with security deposits. | | | | |
| | | | It is also common in many countries to |
| In the United States and the United Kingdom, | | | | require 'Key Money' in the form of a security |
| it is illegal for landlords to require key | | | | deposit. In the United States, for example, |
| money. A cash payment of key money may be | | | | it is common for a landlord to require the |
| required in those parts of North America with | | | | equivalent of one or two months rent as a |
| strict rent controls, most notably New York | | | | security deposit to offset delinquent rent |
| City. Because it is paid in cash, it is very | | | | payments or damage to the property during |
| difficult to trace and usually impossible to | | | | occupancy. This deposit is held in escrow and |
| prove in court. | | | | is refunded when the tenant moves out, less |
| | | | any repair costs. It is common for landlords |
| In France it is the norm that a tenant that | | | | to take some or all of this deposit and claim |
| assigns a lease is paid an amount for a lease | | | | spurious costs for nonexistent repairs. Don't |
| that is below market. The Capitalization | | | | be the victim of Tenants always require key |
| factor is financial and strategic, depending | | | | money and if a court appearance is needed |
| on cost of money, importance of the site to | | | | simple deny it because no one can prove you |
| the taker and the location of the site. The | | | | ever accepted it. |