Holdover tenants can be a major headache for landlords. They are a nuisance and a major burden for landlords as they can negatively impact their rental business.
By following the legal process, landlords can regain control of their property and minimize the negative impacts of holdover tenants.
It’s always better to be proactive and prevent holdover tenants from becoming a problem in the first place. Be sure to implement proper screening and lease agreements, and maintain open communication with tenants.
In this article, we will explore the concept of holdover tenants, why they are terrible to keep, and the legal actions landlords can take to get rid of them.
What are Holdover Tenants?
A holdover tenant is a tenant who continues to occupy a rental property after their lease has expired. This can occur for several reasons, such as disputes over the lease agreement, lack of alternative housing options, or a refusal to vacate the property. Holdover tenants are not protected by the lease agreement and can be evicted without proper cause.
Can Tenants Continue to Reside in the Property After their Lease Ends?
When a rental lease agreement is not renewed or a new lease is not signed, tenants may still reside in the property if the landlord allows it. In such cases, there are two possible types of tenancy the tenant can enter into:
Tenancy at Will
This occurs when the tenant continues to pay rent with the consent of the landlord until either party decides to end the agreement. It is important to note that tenancy at will is not the same as a month-to-month lease, as it is not binding.
Tenancy at Sufferance
This occurs when a landlord has not given the tenant permission to remain in the property but has also not evicted them. In such cases, it is crucial to be aware of local landlord-tenant laws, as they may vary in terms of how long a tenant can stay in the property after the lease expiration date. Before taking any action, it is wise to understand the laws in your area.
The Negative Impacts of Holdover Tenants
Holdover tenants can cause significant financial loss for landlords as they are not paying rent for the additional time they occupy the property.
Because there’s no binding lease anymore, having holdover tenants can reduce the landlord’s control over the property and consistent rental income is not guaranteed. It may also delay updates, maintenance, and renovations.
It can also lead to further legal problems, as landlords may have to take legal action to get the holdover tenant to vacate the property, which is both costly and time-consuming.
Legal Actions Landlords can take to Get Rid of Holdover Tenants
The first step in getting rid of a holdover tenant is to serve a notice to vacate, informing the tenant that their lease has ended and they must leave. If the tenant fails to do so, the landlord can file an eviction lawsuit. Laws and procedures surrounding eviction vary from state to state in the United States, so the landlord must act accordingly.
Other Non-Eviction Options
There are several practical ways that landlords can deal with holdover tenants, besides eviction.
Negotiating a new lease agreement
Landlords can try to reach a new lease agreement with the holdover tenant. This can be a good option if the tenant has been a good tenant in the past and is willing to negotiate the terms of a new lease.
Offer a cash settlement
In some cases, the holdover tenant may be willing to vacate the property in exchange for a cash settlement. This can be a quicker and less costly solution than eviction.
Convert the tenancy to a month-to-month tenancy
If the holdover tenant is unwilling to sign a new lease agreement, the landlord can convert the tenancy to a month-to-month tenancy. This allows the landlord to give the tenant a 30-day notice to vacate the property.
Prevention Strategies for Landlords
One of the best ways to prevent holdover tenants from becoming a problem is to properly screen potential tenants before entering into a lease agreement.
After publishing a listing on Padleads and receiving several rental applications, never take shortcuts in the screening process. Make sure to perform background checks and determine their capacity and behavior as tenants.
Also have a detailed lease agreement to avoid disputes and misunderstandings between landlords and tenants. Regular communication with tenants can also help prevent holdover tenants, as it can keep the landlord informed of any issues and help resolve them before they escalate.
The agreement should make it clear what the rules and expectations are when the tenancy ends.
In conclusion, holdover tenants are a major concern for landlords in America. They can cause financial damage, legal problems, and harm the landlord’s reputation. However, landlords must take quick action to regain control of their property.