Short answer
Cash for keys is a voluntary deal where you pay the tenant to move out by a set date and return the keys, usually in exchange for a signed release. It is a private agreement, not a court process. It is generally a lawful alternative to eviction, but put it in writing and have a Pennsylvania attorney review it.
What it is
Cash for keys is an agreement between landlord and tenant. The landlord offers money. The tenant agrees to leave by a certain date, leaves the unit in an agreed condition and hands over the keys. Both sides skip the cost and delay of a court case.
This answer found no Pennsylvania statute or court publication that defines cash for keys by name, so treat it as a private contract governed by general contract and landlord-tenant principles.
Because it is a private deal, the details are up to the parties. That is both the advantage and the risk.
Why landlords use it
The Philadelphia Municipal Court describes the eviction path as notice, a diversion step, a filing, a hearing and possible further steps. A voluntary move-out can shorten that. For a seller, a vacant house is easier to show and appeals to more buyers.
The cost is the payment. Compare it with the rent you would lose and the legal fees you would pay over a longer process.
Think of the payment as a cost of selling. If it lets you list a vacant house a month or two sooner, it may pay for itself.
Do it in writing
A good agreement states the move-out date, the amount, when it is paid, the condition the unit must be left in, what happens to the security deposit, and that the tenant releases claims. Many landlords pay part at signing and the rest when keys are returned. The tenant should get a copy.
Do not use threats or pressure. The court states self-help by landlords is not permitted, including lock changes, utility shut-offs and removing possessions. An offer must be voluntary.
What it does not do
It does not work if the tenant refuses. It does not replace the legal process if the tenant stays. If the tenant takes the money and stays, you may still need the notice and court process, so sequence payments with the move-out.
Also consider the house is still subject to the usual duties on a sale. Pennsylvania's Seller Disclosure Law applies to one-to-four-unit homes, and the disclosure statement must be delivered before the agreement of sale is signed.
Alternatives
You can sell with the tenant in place, evict through the court or sell to a buyer who deals with the occupancy. Kaizen Home Buyers buys as-is, offers within 24 hours and charges no agent commission. Ask us whether we can take a specific occupied house. Call 267-329-0084, and talk to an attorney before you make any payment offer to a tenant.
One last point. Taxes on any payment, and how it affects your sale price or your books, are questions for a tax professional. Ask before you pay.