Also known as: key-money · premium · key fee
Written by attorneys · grounded in primary & secondary sources — see below
A payment made by a prospective tenant to a landlord or outgoing tenant to secure a lease or rental rights, often in addition to rent and security deposits.
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Khalil Kabir sought a rent-controlled apartment from Knightbridge Bank as landlord. To obtain the lease ahead of other applicants, Kabir paid an extra sum labeled key money directly to the bank. Upon full satisfaction of the underlying obligation through this payment and regular rent, the bank issued a release clearing any encumbrance on the tenancy rights.
Kimberly Knox, a minority shareholder, received an offer from a buyer seeking majority control in a closely held firm. The buyer paid key money to Knox to secure her shares and voting rights. The transaction closed only after the full premium satisfied the purchase obligation, discharging any remaining claims between the parties.
Kaito Kato paid key money to a block of shareholders to obtain their proxies in a contested corporate vote. Once the full amount satisfied the commitment, the proxies were delivered and the underlying obligation was discharged without further recourse.
Kwame Kofi paid key money to an insurer to expedite issuance of a high-value policy. Full payment of the sum satisfied the application obligation, entitling Kofi to the policy documents and discharge of any preliminary conditions.
Kieran Kelly, a target company director, authorized payment of key money to a white knight investor to secure a competing bid. Satisfaction of the full amount discharged the defensive obligation and cleared the path for the alternative transaction.
Kyle Knight paid key money to the auctioneer to guarantee priority bidding rights on corporate assets. Upon tender of the full sum the obligation was satisfied, discharging any further claims and allowing the bidder to proceed with the purchase.
Key money secures the right to obtain the lease itself rather than protecting against future defaults. It is paid upfront to the landlord or prior tenant and is not returned at the end of the tenancy.
Refundability depends on the agreement between the parties. If the payment satisfied an obligation that later fails, the payer may seek return under general principles governing discharge of the underlying duty.
Once the key money satisfies the condition for obtaining the lease, the payment obligation is discharged. No further duties arise from the key money itself unless the parties agree otherwise.
…Benefit Guaranty Corporation (PBGC) which requires an increase in premiums must be approved by concurrent resolution;) (revised premium schedules for voluntary supplemental coverage proposed by PBGC may be disapproved by concurrent resolution). "37. Farm Credit Act Amendments of 1980, Pub. L. No. 96-592, § 508, 94 Stat.…