Property managers know that dealing with tenants can be a delicate practice.
This is especially true for tenants who stay in the rental properties after the lease agreement expires.
These tenants are called holdover tenants, and although it sounds like they're doing something wrong, they are typically doing nothing illegal.
For those that don't know much about how to handle a holdover tenant or want to learn more about, we are here for you.
In this guide, we will be explaining exactly what a holdover tenant is (and is not) and how to deal with them in your rental property.
To begin, let's briefly explain what a holdover tenant is defined by.
What Is A Holdover Tenant?
A holdover tenant is any tenant that continues to live in a rental property after the lease expires with the tenant's permission.
It is important to note that holdover tenants stay in the property while still making rent payments and usually form a month-to-month lease instead. Also note that a holdover tenancy can only occur if the landlord accepts the extended stay.
When the landlord does not give permission for the tenant to stay on the property and the tenant refuses to leave, that becomes a trespasser, and an eviction process will most likely follow.
But, before we get into how to deal with the holdover tenants, let's talk a little bit about how a regular tenant turns into a holdover tenant.
Why Do Tenants Stay On The Property?
Although every tenant is different, there are typically a few common reasons why a tenant would stay in a property after the lease agreement has expired. Below, we have described some of these most common reasons.
Tenant Needs More Time
One of the reasons why tenants will stay in the rental property after the lease agreement expires is because they simply need more time.
This could mean that they are trying to find a place where they can live or they don't have enough money to move out in that moment. In these cases, it may be beneficial to talk to the tenant and try to figure out an agreement where both parties are satisfied.
However, if the tenant had been troublesome and generally a low quality tenant, this step could generally be skipped.
Tenant Refuses To Leave After Eviction Notice
In some rare cases, the tenant may refuse to leave the property even after being served an eviction notice. When this happens, the landlord is typically forced to contact authorities to have the tenants forcibly removed from the property.
This is done by stating your case at a court hearing. If the judge grants you the writ of possession, the sheriff's department will handle the removal of the tenant from the property.
Tenant Is Fighting Eviction
Sometimes, the tenant truly believes that they are being wrongfully evicted and they challenge the eviction process.
When this happens, the best first step is to speak to the tenant to find out what it is that they are arguing and figure out if there is some sort of agreement that can be made between both parties.
However, if this doesn't work, and the situation escalates, it may be better to work things out in court.
In these situations, it is always a good idea to know about the tenant's rights before doing anything. So, in the next section, we will be going over what rights holdover tenants have in this situations.
What Rights Do Holdover Tenants Have?
Just like for regular tenants, holdover tenants also have a set of rights and it is extremely important that they be considered.
When a tenant legally stays in the rental property after the expiration of the lease without explicit disapproval of the landlord, this is called tenancy at sufferance. This is the opposite of a tenancy at will, which is when the tenant occupies a rental property with the consent of the owner but not necessarily with a written agreement.
Notice Of Termination
For landlords, there is a long process involved to evict a holdover tenant. A lot of the steps are similar to a regular eviction process, like serving a notice of termination.
Some situations in which a landlord can typically serve a notice of termination is when:
- Rent is being accepted without any lease agreement
- The landlord wants to evict the tenant even before the lease term expires
- There is specific language in the lease
- The property is Section 8 or regulated rent housing
Other than these situations, there are not many other situations where a landlord may give a notice of termination to the tenant.
So, now that we know about some of the holdover tenant's rights, let's go over some of the general proceedings when dealing with one.
How To Deal With A Holdover Tenant
When handling a holdover tenant, there are a few things that can be done. Each option has its own advantages and disadvantages and it really depends on each specific situation.
Below, we will be going over some of the most common things that landlords do when handling handover tenants.
Letting The Tenant Stay
If the tenant continues to pay rent, has not caused any problems throughout the tenancy, and has been an overall positive experience, the easiest and most beneficial thing to do in many cases is to let the tenant stay.
If the original lease agreement does not contain any specifications about holdover tenants, then a new lease will typically be drafted. But, instead of a yearly lease, this new lease will be a month to month lease or considered periodic tenancy.
Also, it is important that if the landlord continues to accept rent payments without any agreement, they are agreeing to the tenant staying on the property. And, once the holdover begins paying rent, the landlord will no longer be able to evict a holdover tenant on the grounds of overstaying their lease period.
If you really do not want the tenant in the property and the tenant refuses to leave, it may be time to begin the eviction proceedings. In this case, the tenant is treated like a trespasser .
The first step to remember is that you should not accept further rent payments from the tenant. Accepting rent payments at this point will only cause problems during the eviction and is not worth it.
Instead, landlords should serve the tenant with an eviction notice. That notice will contain all of the language about why the tenant is being evicted as well as how long they have to move out.
From there, the landlord can move on to the local court system. Once they get a successful eviction judgement, the tenants may be removed from the property.
Terminating The Lease Agreement
Some state laws allow for a tenant to overstay their lease period for some time. In these cases, the landlord must formally terminate the lease agreement. This can be done by giving the tenant a 30-day notice of the termination.
After this is done, the tenant will receive a notice of termination with a time period under which they must leave the property. If they refuse to leave after this time period, you can pursue an eviction to regain control of the property.
Dealing with a holdover tenant situation is a very delicate practice and can go either very well or very wrong. This is why it is so important to be cautious about your state's laws and make sure that everything you do is done under cleanly and legally.