Are you considering renting out your property? Becoming a landlord can be a great way to generate income, but it’s important to understand the legal implications. One of the biggest issues is if a tenant wants to stay after their lease expiration.
In this blog, we’ll tell you how to handle a tenant who wants to stay beyond the agreed lease period. We’ll also share some helpful tips on how to deal with holdover tenants.
What Is a Holdover Tenant?
A holdover tenant is a tenant who stays in the rental property beyond the end of the lease agreement. Potential reasons for a tenant's overstay can include financial constraints or a lack of housing options. However, sometimes tenants are simply unaware that their lease has expired and, other times they want more time to move.
How Long Can a Tenant Stay After a Lease Expiration?
The exact answer to how long your tenants can stay after a lease expiration depends on the state's law. Most states will give a tenant a grace period of up to 30 days before they are considered a holdover tenant.
During that period, the tenant is required to pay rent at the same amount that was due under the expired lease. Once the grace period ends and the tenant chooses not to extend the lease, the tenant is considered a holdover tenant and will be subject to different rules and regulations.
If your tenant stays without giving you notice or due rent after their lease term, they become an "unlawful occupant". Technically, there is no longer a contract between landlord and tenant. In this case, you can begin to take legal action against them and look for new quality tenants.
That said, you don’t have to immediately take legal action, you can also try to work out an arrangement with the tenant. For instance, you can allow them to stay on a month-to-month basis with a rent increase.
You can also offer to waive late fees or give them a grace period for any back rent they owe. Be sure to check with a local attorney to make sure you are obliging by all laws.
Is Asking for Rent Past the Lease Date Legal?
Yes. It is legal for landlords to ask for rent past the lease date.However, it is important to understand that past-due rent is still subject to state and local laws. Depending on where you live, there may be specific laws that protect tenants from eviction. Most states protect tenants who are unable to pay rent due to financial hardship.
How Should I Handle Holdover Tenants?
Every landlord-tenant situation is unique, so it's important to tailor your approach to the individual tenant. While this can be a tricky situation to handle, there are a few things you can do:
Talk to the Tenant
The first thing you should do is talk to the tenant and find out why they want to stay. Discuss options with them and try to reach an agreement. You can offer a month-to-month rental agreement, or a new lease agreement if the tenant is willing to commit to a longer stay.
Send a Notice of Termination
If the tenant does not agree to a new lease or month-to-month agreement, then you should send a notice of termination. The notice informs the tenant that they must vacate the property by a certain date.
Tenant Dispute Resolution Services
Sometimes you need a mitigator to help both parties come to an agreement. In situations like this, you can look into tenant dispute resolution services. These services provide an impartial third party to mediate between the tenant and the landlord. The mediator can help you and the tenant find a mutually agreeable solution.
Take Legal Action
If the tenant does not leave by the date specified in the notice of termination, then you should take legal action. Legal action involves filing an eviction notice with the court system, this is the only way to legally remove a tenant from your property. Be sure to check your local laws for specific instructions on how to proceed with the eviction.
Take Preventative Measures
To prevent this from happening in the future, make sure you have a strong lease agreement in place. Have the tenant sign the agreement and make sure they understand the terms. Make sure you have a policy in place that clearly states what happens when a tenant stays beyond the end of the lease to avoid squatters and holdover tenants.
How Can I Evict a Holdover Tenant?
If you want to evict a renter who doesn't leave after their lease expires, there are several steps involved with this process:
Serve them with a notice to inform them of the upcoming eviction proceedings
- File an eviction complaint with the court
- Serve copies of all documents related to this case to all parties named in the complaint
- Hold a hearing at which both parties present evidence about why the eviction should or shouldn't happen
- Issue a notice based on the outcome of the hearing
Summary
Having a holdover tenant can be stressful, especially if they aren't paying. You lose potential rental income every day. In order to maintain a positive landlord-tenant relationship, it's best to negotiate a mutually beneficial agreement with your tenant and try to avoid a court hearing.
If, however, the court is the only option, make sure to be prepared. If you ever find yourself with a holdover tenant who won’t leave, consult a professional.
No matter the decision you make about a holdover tenant, don’t go it alone! Contact Windermere Property Management for assistance in all your property management needs. Our team is equipped with all the necessary knowledge to help you succeed with your investment property.