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Owning rental property comes with various benefits, but one drawback may be a holdover tenant. Having someone overstay their lease can be a complicated problem. Depending on your local eviction laws, it may be a costly process to have the tenant removed from your property.

A holdover tenant may prevent you from cleaning the unit, leave you in an awkward business position, and stop you from raising rents to match current market conditions. Avoiding holdover tenants is the best option but is not always easy in practice. And once you have a holdover tenant, properly evicting them is paramount.

Eviction laws vary from state to state, county to county, and even city to city. Ensure you comply with all legal requirements for removing a renter from your property to avoid costly lawsuits or fines.

To stop holdover tenancy before it becomes an issue, you must be proactive as a landlord. Review your lease agreements to check that the end of tenancy and renewal provisions are clear. Plus, clear communication about expectations and rules can go a long way towards preventing information from being lost in translation.

Holdover tenants can interrupt your rental income cash flow, so do what you can now to prevent future issues.

What Is a Holdover Tenant?

A holdover tenant occupies a property without an updated or current lease or the permission of the landlord. People with little real estate experience may consider a holdover tenant as squatters, but that is not precisely correct.

Unlike squatters, the holdover tenant first moved into an apartment under a valid lease agreement. However, when the lease period ended, the renter failed to move out. Therefore, they are ‘holding over’ in a unit they have no legal right to occupy. The holdover may last until the renter moves out on their own or you, as the landlord, take action to evict them from the unit.

Still, holdover tenants may be benign. Some renters may simply believe that by staying (and paying rent), their lease is renewed. Others may be under the impression that once a defined term lease ended, they became month-to-month tenants.

On the other hand, some holdover tenants are purposefully operating outside of standard renting practices. Some may be hoping to avoid a rent increase and continue to pay their old rental amount every week or month. Others may cease paying rent and rely on your hesitancy to post an eviction notice as an excuse for continued occupation.

Read more: Month-to-Month vs Fixed-Term lease

Difference Between Holdover, At-Will, and Periodic Tenancy

Three types of tenancy can often be confused with each other: holdover, at-will, and periodic tenancy. However, there are crucial differences between all three. It is essential to understand the type of tenancy you are dealing with before pursuing remedial options.

As mentioned above, a holdover tenancy occurs when a tenant stays after the expiration of a lease without the landlord’s permission. Contrast that with a periodic tenancy where the renter and landlord agree there is no set end date on a lease. Typically, a periodic tenancy is created by the terms of a lease agreement that just ended. Vitally, the landlord is openly permitting the tenant to remain on the premises.

Conversely, an at-will tenancy allows either the landlord or the tenant to end a lease at any time (usually with a required notice period). So long as they follow the lease terms, a renter with an at-will tenancy can end the arrangement whenever they want. However, the landlord has agreed to give the tenant this freedom and also has the right to terminate the tenancy with proper notice.

Types of Tenancy
Holdover At-Will Periodic
Landlord Permission? No Yes Yes
Eviction Required to End the Arrangement? Yes No No
Rent Still Required? Yes, but it may not be paid. Yes Yes
End Date? When the holdover tenant is evicted or leaves. Can be ended with notice from either landlord or tenant at any time. Ends when both parties agree to terminate the lease agreement.

How to Deal with Holdover Tenants?

You have a few options once you have verified that your tenant is a holdover and not at-will or periodic. Determining whether you want to keep renting to the tenant or would rather they leave is essential. Sometimes, an accidental holdover tenancy can quickly be remedied with a new lease.

New Lease Agreement

If you have a good tenant and believe the monthly rent is fair, you can simply offer them a new lease agreement. Once the tenant agrees to the terms, both parties are again governed by the contractual lease relationship.

You may even be able to raise the rent amount when offering a new lease agreement. Be careful to follow local laws on providing notice of a rent increase. Additionally, be prepared for the next steps if the tenant rejects your new rent price.

Holdover Tenant Month-to-Month

Depending on the terms of your original lease agreement, you can allow a holdover tenancy to become a periodic tenancy or a month-to-month rental agreement. But local laws may require you to be explicit about how you want to move forward with the tenant.

To avoid being stuck in legal limbo, you may want to request the tenant sign a new lease agreement, even if it is only for a month-to-month tenancy.

Eviction Process

If you want to remove the tenant from your property, you will legally need to evict them. Be warned, if you continue to accept rent from a holdover tenant, the law may offer them more protection. For example, if you cash a rent check, you may not be able to begin the eviction process until the paid month ends.

Eviction varies from state to state and can take weeks or months, depending on your location. If you know you will evict, begin the process by posting a proper eviction notice as soon as possible.

Holdover Tenants Rights

Just because the tenant is holding over in a property without your permission does not mean they do not have rights. Based on their location, you likely cannot shut off utilities to the unit. Self-help eviction steps such as denying water or electricity are generally illegal.

Finally, holdover tenants still usually have the right to proper notice. So, if you accept rent, the clock for posting a notice to vacate resets. Similarly, you must abide by your local laws to post an eviction notice and allow the tenant to cure any deficiencies before formal eviction proceedings.

The simplest way to avoid holdover tenancy is through a well-crafted, individually tailored lease agreement. Use our step-by-step contract maker tool to create binding legal leases that are drafted to your exact specifications!

Create a Lease Agreement Now

Owning rental property comes with various benefits, but one drawback may be a holdover tenant. Having someone overstay their lease can be a complicated problem. Depending on your local eviction laws, it may be a costly process to have the tenant removed from your property.

A holdover tenant may prevent you from cleaning the unit, leave you in an awkward business position, and stop you from raising rents to match current market conditions. Avoiding holdover tenants is the best option but is not always easy in practice. And once you have a holdover tenant, properly evicting them is paramount.

Eviction laws vary from state to state, county to county, and even city to city. Ensure you comply with all legal requirements for removing a renter from your property to avoid costly lawsuits or fines.

To stop holdover tenancy before it becomes an issue, you must be proactive as a landlord. Review your lease agreements to check that the end of tenancy and renewal provisions are clear. Plus, clear communication about expectations and rules can go a long way towards preventing information from being lost in translation.

Holdover tenants can interrupt your rental income cash flow, so do what you can now to prevent future issues.

What Is a Holdover Tenant?

A holdover tenant occupies a property without an updated or current lease or the permission of the landlord. People with little real estate experience may consider a holdover tenant as squatters, but that is not precisely correct.

Unlike squatters, the holdover tenant first moved into an apartment under a valid lease agreement. However, when the lease period ended, the renter failed to move out. Therefore, they are ‘holding over’ in a unit they have no legal right to occupy. The holdover may last until the renter moves out on their own or you, as the landlord, take action to evict them from the unit.

Still, holdover tenants may be benign. Some renters may simply believe that by staying (and paying rent), their lease is renewed. Others may be under the impression that once a defined term lease ended, they became month-to-month tenants.

On the other hand, some holdover tenants are purposefully operating outside of standard renting practices. Some may be hoping to avoid a rent increase and continue to pay their old rental amount every week or month. Others may cease paying rent and rely on your hesitancy to post an eviction notice as an excuse for continued occupation.

Read more: Month-to-Month vs Fixed-Term lease

Difference Between Holdover, At-Will, and Periodic Tenancy

Three types of tenancy can often be confused with each other: holdover, at-will, and periodic tenancy. However, there are crucial differences between all three. It is essential to understand the type of tenancy you are dealing with before pursuing remedial options.

As mentioned above, a holdover tenancy occurs when a tenant stays after the expiration of a lease without the landlord’s permission. Contrast that with a periodic tenancy where the renter and landlord agree there is no set end date on a lease. Typically, a periodic tenancy is created by the terms of a lease agreement that just ended. Vitally, the landlord is openly permitting the tenant to remain on the premises.

Conversely, an at-will tenancy allows either the landlord or the tenant to end a lease at any time (usually with a required notice period). So long as they follow the lease terms, a renter with an at-will tenancy can end the arrangement whenever they want. However, the landlord has agreed to give the tenant this freedom and also has the right to terminate the tenancy with proper notice.

Types of Tenancy
Holdover At-Will Periodic
Landlord Permission? No Yes Yes
Eviction Required to End the Arrangement? Yes No No
Rent Still Required? Yes, but it may not be paid. Yes Yes
End Date? When the holdover tenant is evicted or leaves. Can be ended with notice from either landlord or tenant at any time. Ends when both parties agree to terminate the lease agreement.

How to Deal with Holdover Tenants?

You have a few options once you have verified that your tenant is a holdover and not at-will or periodic. Determining whether you want to keep renting to the tenant or would rather they leave is essential. Sometimes, an accidental holdover tenancy can quickly be remedied with a new lease.

New Lease Agreement

If you have a good tenant and believe the monthly rent is fair, you can simply offer them a new lease agreement. Once the tenant agrees to the terms, both parties are again governed by the contractual lease relationship.

You may even be able to raise the rent amount when offering a new lease agreement. Be careful to follow local laws on providing notice of a rent increase. Additionally, be prepared for the next steps if the tenant rejects your new rent price.

Holdover Tenant Month-to-Month

Depending on the terms of your original lease agreement, you can allow a holdover tenancy to become a periodic tenancy or a month-to-month rental agreement. But local laws may require you to be explicit about how you want to move forward with the tenant.

To avoid being stuck in legal limbo, you may want to request the tenant sign a new lease agreement, even if it is only for a month-to-month tenancy.

Eviction Process

If you want to remove the tenant from your property, you will legally need to evict them. Be warned, if you continue to accept rent from a holdover tenant, the law may offer them more protection. For example, if you cash a rent check, you may not be able to begin the eviction process until the paid month ends.

Eviction varies from state to state and can take weeks or months, depending on your location. If you know you will evict, begin the process by posting a proper eviction notice as soon as possible.

Holdover Tenants Rights

Just because the tenant is holding over in a property without your permission does not mean they do not have rights. Based on their location, you likely cannot shut off utilities to the unit. Self-help eviction steps such as denying water or electricity are generally illegal.

Finally, holdover tenants still usually have the right to proper notice. So, if you accept rent, the clock for posting a notice to vacate resets. Similarly, you must abide by your local laws to post an eviction notice and allow the tenant to cure any deficiencies before formal eviction proceedings.

The simplest way to avoid holdover tenancy is through a well-crafted, individually tailored lease agreement. Use our step-by-step contract maker tool to create binding legal leases that are drafted to your exact specifications!

Create a Lease Agreement Now