What To Do About a Holdover Tenant in Your Rental Property

No matter how well you screened your tenants prior to signing the lease, things can change when that lease is up. Sometimes tenants just don't want to leave. And that's when you, as the landlord, have to step in.

Most of your renters won't cause problems when it's time to move out. But when someone who's supposed to leave doesn't, you've got yourself a holdover tenant.

Although there are different ways to deal with a holdover tenant, what's most important is taking back control of your property so it can continue to serve as an investment.

A lease can make all the difference

There are a few tenancy terms to know when it comes to a holdover tenant:

• Tenancy at will is when a tenant lives in a property with no lease but has permission from the landlord
• Tenancy at sufferance is when a tenant lives in a property with no lease and no permission

Whether or not they continue to pay rent, the common denominator among all holdover tenants is they're living in your property without a proper lease. No matter what term you call them, you're either left with tenants not paying rent, so essentially squatting in your house, or tenants who continue to pay by don't have a lease dictating how much longer they'll stay. Either way, you've got to act. Whether that means starting the process of eviction or requiring they sign a new lease. Even if it's month-to-month, you need to keep everything legal.

The best way to avoid ending up with a holdover tenant is to refuse to add a clause in the lease that mentions a holdover period. Some leases will have them, but they're not required.

You also should not accept any rent payments after a lease ends, unless the money is past due from the legal rental period. Once you accept rent, it's easy to argue you've agreed to a month-to-month rental whether you want to let the tenant continue living there or not.

When it's time for a holdover tenant to go

For whatever reason, should you decide your holdover tenant needs to leave your property, and they make no effort to move out, eviction is the best legal remedy. Make sure to check both state and local laws to ensure you're doing everything right. You may need to send a notice giving them the opportunity to resolve the issue without legal proceedings. If they fail to respond to that notice, the next step is to serve them an eviction notice.

The eviction process is multi-stepped, starting with the formal notice to the tenant. The next step is to prepare for court. You must:

• File an unlawful detainer summons to get a court appearance
• Collect relevant documents
• File a writ of possession which lets you pursue legal action, with the help of local law enforcement, to remove your tenants

During the eviction process, you cannot accept any rent. So, the longer the process takes, the more money you lose by not having a paying tenant on your property. Because of this, you should always try to get your holdover tenant to move out on their own before you have to file with the courts.

Keep tenant rights in mind

Although holdover tenants don't always pay rent and can leave you wondering how to get rid of squatters, they still have certain rights. Ensuring these rights get met means you don't have to worry about a wrongful eviction.

For holdover tenants, rights include that:

• The dwelling continues to be safe and habitable
• You must still give notice before entering the property
• Utilities are still available and in working order

Holdover tenants also retain the right to file a complaint about a health or safety violation even if they're no longer paying rent.

Letting a holdover tenant stay

Even if you've had a few days of confusion regarding the lease and your tenant's plans, if they want to stay, and can continue to pay rent, it's OK to let them. You should get a new lease written and signed as soon as possible, though.

Work with your tenants to establish new lease terms and get a well-defined agreement signed right away to protect everyone. If you're comfortable with it, you can even put your tenant on a month-to-month lease. This gives them greater flexibility to move out when they're ready. They'll only need to give you 30 to 60 days' notice rather than having to break a year-long lease.

Back to that lease

Letting holdover tenants stay without signing a new lease creates a huge liability for you. Without defined terms, there's no guarantee your tenants will pay the full amount of rent you want. You also won't be able to raise the rent even if they stay for an extended period of time.

No lease also means no rules, opening up the door to damaging your property without consequences. The tenant could also bring in pets even if you have a clear no-pet policy or not maintain the exterior according to your rules. Living there essentially becomes a free-for-all.

Your lease sets the terms for everything in regards to your property. This includes how it's cared for and how you get compensated for renting it. You don't want to forgo this control, so if you're allowing your holdover tenants to stay, by continuing to accept rent, make sure a new lease is in place.

Stop holdover tenants before they start

As a landlord, when it's time for your tenants to move out, you hope for a speedy and seamless process. Unfortunately, that doesn't always happen. To give yourself better odds, make sure you go over the specific terms of the lease at the start of occupancy. Then, send your tenants a reminder at least 30 days before their lease expires.

With clear communication of lease start and end dates, move in and move out times and what will happen after the lease expires, you should have less to worry about when it's a tenant's time to leave, and less chance of encountering a holdover tenant.

If you are experiencing issues with a holdover tenant, you should consult with an attorney regarding your options, as the laws applying to these situations can vary by state and local jurisdiction.

The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.