A holdover tenant is a tenant who stays on your property after the lease has expired. Holdover tenants do not have the landlord’s express permission to stay on the property, but that does not mean they cannot be welcome.
Holdover tenancy is also known as a “tenancy at sufferance.” Contrary to the phrasing, you are not necessarily suffering through the tenancy. Sufferance means that you have not said your tenant cannot live in your property; however, you also have not said that your tenant can.
Your tenancy is a tenancy at sufferance during the time in limbo before the landlord decides to collect rent or evict but after the tenant has overstayed their lease.
What to Do About a Holdover Tenant
You have two options in the case of a holdover tenancy. The first is to kick the tenant out of the unit. There are multiple ways to do that. One is to treat the tenant as a trespasser and evict them. You can either evict the tenant for not paying rent or for criminal activity (i.e. trespassing). The other option is to give your tenant notice to leave. The notice must last at least one payment period. So, if you want your tenant to leave and they pay month to month, you need to give them one month to move out.
The second option is to treat business as usual. Continue to collect rent from month to month – or at whatever interval you and the tenant arranged. Should you ever want the tenant to leave, you can give your tenant notice and terminate the tenancy. However, if you do choose this tenant, you cannot evict a tenant because of holdover.
If you do choose to collect money from a tenancy at sufferance, that tenancy will be considered payment period to payment period. You can end it at any time with prior notice of one payment period.
In some locations, accepting payment resets the lease term. In other locations, accepting payment creates a payment period to payment period tenancy.
Let’s say your lease ends on August 17. Your tenant is supposed to leave the unit on August 17, but does not. On September 17, your tenant still has not left and you are attempting to evict them. Yes, the tenant occupied your unit for an additional month and, thus, they should be paying you for your unit; however, to evict your tenant for holdover you cannot charge the tenant for that additional month’s rent. You are either evicting the tenant as a trespasser (trespassers do not pay rent) or for nonpayment of rent (if they pay you rent, you cannot evict them for nonpayment).
If you’re evicting the tenant for holdover, you will need to begin holdover proceedings, which is the same process you would go through to evict a squatter, tenants who are a public nuisance or tenants who repeatedly refuse to let you into the property.
Consult with a lawyer about how to proceed with a holdover case in your state.