The Holdover Tenant Playbook: Tips for Renters and Landlords

Explore the concept of holdover tenancy, including the rights, responsibilities, and potential consequences for tenants and landlords when a lease agreement expires.

By
Nichole Stohler
|
Last Updated
October 20, 2023
The Holdover Tenant Playbook: Tips for Renters and Landlords

For landlords and tenants, few challenges are trickier than addressing holdover tenancy situations. How do you proceed fairly when a tenant won't vacate, or a landlord changes the locks prematurely?

Understanding the different aspects regarding holdover tenancy can help you navigate the situation in an informed manner so you can avoid future potential problems. This article offers valuable insights and practical advice on dealing with this issue. It aims to provide clear guidance and simplify the complexities.

So, if you want to gain a complete understanding of practical strategies surrounding this issue, read on!

What is a holdover tenant?

A holdover tenant is someone who lives in a rental property, even after their lease expires, without the landlord's agreement.

Holdover tenancy happens when the tenant stays in their rental without signing a new lease. It can cause problems, sometimes legal, between the tenant and the landlord over rent, eviction, and the rules for staying in the property.

Is tenant holdover legal?

Tenant holdover legality depends on factors like local laws, the agreement between the landlord and tenant, and whether the landlord accepts rent from the holdover tenant.

If the tenant pays rent, it generally establishes a new month-to-month lease, and the tenant is legally permitted to stay on the property. This arrangement is governed by the same regulations as any standard lease, typically requiring the landlord to give notice before starting an eviction.

Rights and responsibilities of holdover tenants

Tenants who choose to remain in a property after their lease expires can expect to face the following:

Rent payments

Tenants who occupy a property must continue to pay rent. In some cases, landlords might raise the rent or create a new rental contract.

Notice period

If the landlord wishes to start the eviction process, they should provide a written notice to the tenant. The notice should outline their intentions to terminate the lease and specify a deadline for the tenant to vacate the property.

This process establishes clear communication and a fair transition for both parties involved.

Tenancy termination

When a tenant doesn't leave after getting the proper notice, the landlord may use legal action to remove them from the property. The exact steps and time depend on the specific local laws.

Landlords may also offer a lease renewal to holdover tenants, allowing both parties to negotiate new terms or conditions.

Repairs and maintenance

Holdover tenants are still responsible for maintaining the rental property by keeping it clean and livable. Landlords should promptly address any required repairs or maintenance issues for proper upkeep of the unit.

Liability and damages

Tenants who stay in a property may be held accountable for any damages they cause. This could include expenses for repairs or cleaning, which might be deducted from their security deposit.

To assure compliance and protect their rights during a holdover tenancy, tenants and landlords should become familiar with local laws and seek guidance from legal professionals.

Consequences for holdover tenants

If a holdover tenant does not vacate the property, the consequences include the following:

  • Legal action: If the tenant fails to leave the property and stays after the lease ends, the landlord can take legal action, leading to eviction or a lawsuit.
  • Increased rent: Landlords may raise the rent for tenants who stay after the lease has expired. The increase might be due to the current rental rates in the market or governed by local regulations.
  • Loss of rights and protections: Tenants residing in a property beyond their lease term may no longer have the same rights and protections stated in their original lease agreement. Examples include the ability to renew the lease or certain tenant rights defined by local laws.
  • Damages and penalties: Tenants who continue to stay in a property may be responsible for any damages caused during their occupancy. As mentioned in the lease agreement or local laws, they might also face extra penalties or fees.
  • Difficulty finding future housing: A history as a holdover tenant can make finding a new rental challenging and disqualify you from renting from other landlords.

A landlord's options for dealing with holdover tenants

Some common options for recourse that landlords can consider when dealing with holdover tenants include:

Lease renewal: Landlords can extend a lease to a holdover tenant, providing the tenant an opportunity to keep renting the property with updated terms. This allows the landlord to maintain the tenancy under their terms.

Negotiate new rental agreement: Landlords can negotiate a new rental agreement with holdover tenants instead of renewing their lease. A landlord may choose to adjust the rent, change the terms from yearly to a month-to-month lease, or make changes to address any concerns the tenant had during their previous rental term. This approach allows both parties to find common ground and reach a mutually beneficial agreement.

Require higher rent: Landlords might increase the rent for a holdover tenant who wants to stay in the unit. Increasing rent encourages the tenant to vacate the property or sign a new lease agreement.

Notice of termination: When a landlord doesn't want to keep renting to a holdover tenant, they can give them a notice of termination. Follow local rules, and give the tenant a deadline to leave the property.

Legal action/eviction: Landlords can take legal action for eviction when a holdover tenant refuses to leave after being notified of termination. Exercise the correct legal eviction process to remove the tenant from the property.

Tips for holdover tenants

Tenants who are overstaying can utilize methods to handle their situation better, including:

  • Discuss the situation and share your intention in order to build understanding and negotiate new lease terms with your landlord. Engaging in dialogue can lead to understanding the landlord's expectations and potentially result in a mutually beneficial agreement.
  • Review the terms of your lease. Know when the full rental contract starts and ends to help prevent overstaying. Be proactive and plan your move about 60 days before your tenancy expires to avoid becoming a holdover tenant.

These are general tips and may not apply to all situations -- seek legal advice when dealing with tenancy issues.

Holdover tenancy, in summary

Tenants should know their rights, responsibilities, and the possible outcomes of being a holdover tenant. Learn the applicable laws, maintain open lines of communication, and make wise decisions.

Likewise, landlords should understand their duties and available options, ensuring a seamless transition or resolution. By taking the appropriate actions, both parties can mitigate risk and work towards reaching an outcome that everyone's happy with.

Holdover tenant FAQs

How long does it take to evict a holdover tenant?

The time it takes to evict a holdover tenant can vary based on local laws and the case's specific situation. This process usually involves legal proceedings, which may last several weeks or months.

Can a landlord refuse to accept rent payments from a holdover tenant?

If a landlord wants to end a tenancy, they usually have the right to decline further rent payments from a holdover tenant. Follow the correct legal process and give written notice of non-acceptance.

Nichole Stohler

Nichole co-founded Gateway Private Equity Group, with a history of investments in single-family and multi-family properties, and now a specialization in hotel real estate investments. She is also the creator of NicsGuide.com, a blog dedicated to real estate investing.

A hand illustration holding a house with flowers coming out of the roofA logo spelling dont miss out, the rental rundown
Whether you're a property owner, renter, property manager, or real estate agent, gain valuable insights, advice, and updates by joining our blog newsletter.
Subscriber Identity
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
A green hill illustration with houses