A tenant who continues to pay rent after a the lease has expired is allowed to stay in the property indefinitely. However, the landlord is within their rights to stop accepting rental payments and begin the eviction process.
What is a Holdover Tenant?
A tenant that stays on the premises after the lease expires is a holdover tenant. The law has some gray area about what rights a holdover tenant has, but generally, a tenant can remain until the landlord decides to do something about it.
This type of tenant has what’s known as “tenancy at sufferance” which means that they do not have either outright objection nor genuine approval to remain in the property. Generally, as long as the renter continues to pay, they can legally remain in the property. However, state law can dictate how much the tenant needs to pay. For example, Delaware allows for landlords to charge up to double the amount of rent the tenant paid under the now-expired lease agreement.
Landlord Options With Holdover Tenants
There are essentially two options that a landlord has with holdover tenants:
- Keep the Tenant – This means drafting a new lease agreement and having both parties sign it. If the landlord would like to keep the tenant on the premises, they can offer to prepare a new lease agreement on either a month-to-month basis or a longer lease term.
- Evict the Tenant – First, the landlord must stop accepting rent payments from the holdover tenant. Then, landlords can begin the process of legally evicting them from the property. In some cases, the landlord may be able to seek damages in court. Eviction (or convincing the tenant to leave without legal action) is the more common outcome as landlords will often have a new lease starting with a tenant that they’ve already screened and had sign a contract. Be sure to follow all proper eviction procedures, as for example a landlord cannot engage in self-help evictions (e.g., changing the locks) even with holdover tenants.
Landlords should contact attorneys to review individual cases with holdover tenants because the laws can be different than they would be for a regular tenant still governed by a lease agreement.
How to Deter Holdover Tenants
Landlords with a planned strategy can avoid most holdover tenants with proper lease language and sending a reminder notice of the lease’s expiration.
Address Holdover Tenants in the Lease Agreement
To deter holdover tenants, landlords should include language in the lease agreement that specifies how these situations will be handled. The contract should state that tenants staying past their lease expiration will trigger an immediate start of the eviction process. No rent payments will be accepted after the lease expiration date.
If state laws allows for financial penalties, be sure to include those specifics in the contract as well. For example, landlords may be able to charge up to 200% of the previous rental amount. This amount will effectively deter almost all holdover tenants. However, the contract should specify that this amount should be paid upon leaving the property (or taken out of the security deposit), as the landlord’s acceptance of the money can be considered permission for the applicant to stay in the property.
Send a Notice of the Lease’s Expiration
Beginning at least 60 days in advance, landlords should send notices to remind tenants that their lease is going to expire. In most cases, it is not required by law to send a notice to remind tenants as the lease agreement already specifies the end date. However, it’s still an effective way to avoid accidental holdover tenants.
In this notice, landlords should remind the tenants of the ramifications of staying past the end of the lease date, especially reminding them of the financial penalties. Landlords should mention that they have new tenants taking over the rental property, so the current tenants will need to vacate immediately.
However, some tenants will ask to stay in the unit a few days lease expiration until their next residence is available. In this case, landlords and tenants can often come to an agreement where a few days are spent in the property at either the normal rental rate or the increased rate reserved for holdover tenants.