Key Money

DEFINITION of 'Key Money'

A payment made to a building owner, manager or landlord by a potential tenant in an attempt to secure a desired tenancy. Key money can be considered a type of deposit on a housing unit such as an apartment unit.


Key money also refers to a security deposit paid by a lessor or a lessee for a leased property.

BREAKING DOWN 'Key Money'

Key money is paid by a prospective tenant to a property owner or manager in the hopes of securing a rental contract in a particular property. In certain circumstances, key money can be considered a bribe to ensure that a property coming up for rent is secured by the payer of the key money, and as such, the transaction is conducted in an unofficial manner.

RELATED TERMS
  1. Lessee

    The person who rents land or property from a lessor. The lessee ...
  2. Lease

    A legal document outlining the terms under which one party agrees ...
  3. Tenancy At Sufferance

    An agreement in which a property renter is permitted to live ...
  4. Lessor

    The owner of an asset that is leased under an agreement to the ...
  5. Tenancy At Will

    A tenancy agreement where a tenant occupies property with the ...
  6. Double Net Lease

    An agreement in which the tenant is responsible for both property ...
Related Articles
  1. Home & Auto

    Renters' Guide: Tenants, Landlords And Types Of Leases

    Landlord and TenantA landlord is an owner of real property who agrees to rent all or part of a property to another party, called the tenant, for some period of time. A lease establishes the relationship ...
  2. Home & Auto

    The Complete Guide To Becoming A Landlord: Landlord-Tenant Relationship

    A lease establishes the relationship of landlord and tenant and is both a conveyance of a possessory estate in real property and a contract between the parties. Through the lease, the tenant ...
  3. Economics

    Who is a Lessor?

    A lessor is the owner of an asset that is leased.
  4. Credit & Loans

    How Does a Lease Work?

    A lease is an agreement between two parties where the lessor owns property that it allows the lessee to use pursuant to terms of the agreement.
  5. Home & Auto

    Renters' Guide: The Rental Process

    Finding the ideal rental property can be time consuming. Knowing what to expect can help ensure a smooth process. View PropertiesWhile there are times when people must rent a property sight-unseen, ...
  6. Retirement

    Could Being A Landlord Pay For Your Retirement?

    If you have the money to buy them and the energy to run them – or the funds to pay a good manager – rental properties can help pay for your retirement.
  7. Home & Auto

    4 Things Landlords Aren't Allowed To Do

    Whether you're a landlord or a tenant, you need to know the rules.
  8. Budgeting

    3 Things to Consider When Renting By the Room

    Although renting by the room can increase returns on rental property, it does come with a few caveats.
  9. Home & Auto

    The Complete Guide To Becoming A Landlord: Finding Tenants

    A challenge that most landlords face is finding reliable tenants to fill their rental properties. Ideally, a tenant will be willing and able to pay his or her rent in full and on time each month, ...
  10. Home & Auto

    Nonfreehold Estates In Real Property

    If you have an interest in real estate, read on to find out which type of property you have.
RELATED FAQS
  1. What are the differences between single, double and triple-net leases?

    Learn the ins and outs of net lease agreements, including the key differences between single net, double net and triple net ... Read Answer >>
  2. What are the three "nets" of an NNN lease?

    Learn what the three "nets" are in an NNN lease and how they affect the responsibilities of both landlord and tenant in a ... Read Answer >>
  3. Do landlords set up escrow accounts for their tenants' security deposits?

    Learn when and why landlords place rental property security deposits in separate escrow accounts to make sure the money is ... Read Answer >>
  4. What kinds of real estate transactions use triple net (NNN) leases?

    Learn how a net-net-net or triple net lease works and why it is popular in commercial real estate transactions. It is also ... Read Answer >>
  5. What key requirements must be met for the IRS to classify changes or alterations ...

    Learn the requirements needed to qualify for Internal Revenue Service tax breaks under the qualified lease improvement on ... Read Answer >>
  6. How does the value of the real estate impact the value of a triple net (NNN) lease?

    Understand how the value of the real estate involved in a triple-net lease impacts the value of the lease both positively ... Read Answer >>
Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  4. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  5. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  6. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
Trading Center