What If My Tenant Won’t Leave At The End Of the Lease?

Most tenancies have set expiration dates, however, there may be instances where you have a tenant who refuses to leave after the end of the lease. This can be a difficult situation to navigate; fortunately, there are several steps you can take to resolve the situation, including renewing the lease at a higher rental price or evicting the tenant. Here’s what you should know about holdover tenants and your options for resolution. 

Please note that this is for informational purposes only and is not intended as legal advice. Laws may vary depending on your location. 

What’s a Holdover Tenant?

A holdover tenant is a tenant who continues living at a rental property after the lease expired without the landlord’s permission. If you choose to accept rent payments from a holdover tenant, they’re legally allowed to remain in your property, and the duration of their new rental term will be determined by federal and state laws. In some cases, the original lease may automatically convert into a month-to-month tenancy.

However, there may be situations where you may not want the tenant to stay. In this case, it’s important not to accept any further rent payments. According to Investopedia, if the landlord refuses to accept additional rent, the tenant is considered to be trespassing. If the tenant doesn’t promptly move out, it may be necessary to start the eviction process. 

Holdover tenants occur when a lease expires and the landlord doesn’t sign a new one with the tenant. Your state laws may dictate that the lease rolls over to a month-to-month tenancy, but that doesn’t means that you continue to have the same protections for your property. 

Some tenants take advantage of the holdover period because they can continue to live at the property without making a long-term commitment, but it’s best to have them sign a new lease agreement whenever possible to prevent issues that could be difficult to resolve without an active lease—such as bringing unauthorized pets to the property or not paying rent by the previously established due date. 

Is Your Tenant Actually a Holdover Tenant?

Holdover tenants are fairly common—and in most cases, it’s fairly obvious when you’re dealing with one. However, holdover tenants are often confused with periodic tenancies and tenancy at will. You may see these terms used interchangeably, but they have legal differences. For example, a periodic tenancy is a type of tenancy that doesn’t have a set end date. The lease stays in effect for as long as both parties agree to it. This usually occurs after the initial lease has ended. 

Tenancy at will is a rental agreement where the landlord agrees to let a tenant continue living at the property after the lease has ended. In this case, the agreement can be ended any time either party wishes to do so. 

The main difference between these two tenancies and a holdover tenant is that the landlord and tenant have agreed upon the terms of the tenancy, whereas a holdover tenant continues to live at the property without the landlord’s permission. 

Holdover Tenants: Exploring Your Options

If you’ve determined your tenant is a holdover tenant, it can be difficult to know what action to take. Understanding all the options available can help you resolve the situation sooner—and prevent more complex issues from arising. 

The first step to take once the agreement ends is to reach out to your tenant to determine their plans. Ask them whether they plan to move or are interested in renewing the lease. If they don’t respond or have an answer about when they’ll vacate the property, you have three options:

1.) Let the Tenant Stay

If your tenant continues to pay rent after the lease has ended, and you accept it, you’re essentially agreeing to let them continue living at the property. Depending on the terms of your lease and local laws, the tenancy may have converted to month-to-month, since there was no official agreement with a set end date. If your original lease doesn’t include a specific provision for this situation, it may be best to have the tenant sign a new lease agreement. 

It’s important to understand that once you’ve accepted rent from a holdover tenant, you won’t be able to evict them for staying past the lease period. Make sure not to accept any rent payments unless you want the tenant to continue staying at your property. 

2.) Terminate the Lease Agreement

In situations where a tenant overstays the lease but there are provisions in the lease agreement or local laws that allow for a holdover period, it’s important to formally terminate the lease by providing notice to the tenant. Usually, the notice is required to be equal to the rent payment period. A notice of termination will typically include:

  • The reason for the termination
  • The date the renter must move
  • The consequences if the tenant doesn’t comply (usually eviction)

The requirements vary from state to state, so make sure you’re aware of your state’s laws or seek out legal advice. 

Once the tenant receives the notice, they’re typically given a specified period of time to vacate the property. If the tenant doesn’t leave after the lease has been officially terminated, you’ll need to start the eviction process to regain control of your property. 

3.) Eviction 

If you want the tenant to leave the property, but they refuse, don’t accept any rent from them because it can complicate the eviction process. Send them a formal notice to vacate, citing either non-payment of rent or violation of lease terms due to overstaying the tenancy.

After serving the notice to vacate, the next step is to initiate the eviction process in accordance with the rules and regulations of your local court system. In some cases, simply providing the termination notice may prompt the tenant to take action and vacate the premises. 

However, if the tenant doesn’t comply and they haven’t paid rent, you may need to seek legal assistance or contact your local eviction court to gather more information about initiating court proceedings. Once a court date is established, the formal eviction proceedings can commence. Keep in mind that the eviction process can be expensive, and costs can vary depending on the jurisdiction and legal representation involved. 

Although you may want the tenant to leave your property immediately, you’re not allowed to take any action to evict them beyond what’s outlined in your state and local laws. Holdover tenants have rights, so self-eviction is never advisable—or legal. 

As you can see, you have several options when it comes to how to handle a holdover tenant. Before making a decision, it’s important to weigh your options carefully to ensure you’re making the best decision for your business and rental property. 

In most jurisdictions, you won’t be able to change your mind once you’ve made a decision. For example, if you accept rent from your tenant during the holdover period, you won’t be able to file for eviction right away. Take time to consider all the factors before taking action. 

Steps to Avoid a Holdover Tenant

When it comes to holdover tenants, it’s best to be proactive. Here are some steps to take before and after the lease is signed. 

Before the Lease is Signed 

  • Clearly state what happens when the original lease expires. Many landlords allow long-term tenancies to become month-to-month if a new lease hasn’t been signed before the original agreement ends. 
  • Make a point to highlight how much notice is required if the tenant wants to renew their lease or if they choose not to renew their lease. It’s important to make sure you’re complying with the local laws and regulations, as many states require renters to provide 90-120 days’ notice before the lease ends.
  • If allowed by local landlord-tenant laws, outline the consequences of failing to provide notice to renew or terminate the lease. 

If your existing lease doesn’t include this information, consider adding an addendum to the agreement. A lease addendum serves as an additional document that modifies or supplements the original lease agreement, allowing you to incorporate the necessary details regarding lease renewal, notice periods, and consequences for failing to provide proper notice.

When creating or updating the lease agreement and any addendums, it is recommended to consult with a legal professional who specializes in landlord-tenant law to ensure compliance with local regulations and to address any specific requirements or considerations for your jurisdiction.

After the Lease Has Been Signed

  • Reach out to your tenant at key intervals (for example 90, 60, and 30 days) before their decision date and remind them of the requirement to let you know whether they plan to renew the lease or move out. Make sure to provide clear instructions on your preferred method of communication; it’s advisable to request their notice in writing rather than over the phone or in person so you have the proper documentation in case it’s needed for eviction court or any other legal purposes.
  • Once you’ve been informed of their decision, take the appropriate action. If they choose to move out, set a date to inspect the property for the move-out process. If they want to renew the lease, send them an updated agreement and have them sign it. If the tenant informs you of their decision well in advance, make a note to follow up with them two to three weeks before their move-out or lease start date to ensure the decision still stands and go over any necessary arrangements. 

By reaching out to your tenants proactively, providing clear instructions, and documenting their decisions in writing, you can streamline the lease renewal or termination process and ensure all necessary steps are taken in a timely manner.

Dealing with holdover tenants can be a source of stress and anxiety, but there are proactive steps you can take to ensure a smoother experience. By carefully preparing your lease agreement, either before it is signed or through the addition of an addendum, and maintaining regular communication with your tenant as the rental agreement approaches its end, you can set the stage for a more seamless process. 

If the tenant refuses to vacate, you have options available. You can choose to pursue eviction proceedings to regain possession of your property, or alternatively, consider converting the existing arrangement to a month-to-month agreement if permitted by local laws. These strategies allow you to navigate holdover situations with greater control and work toward a resolution that best suits your needs.

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