When a lease expires, you might automatically assume the tenants will move out. However, occasionally, tenants might plan to stay beyond the lease. Now that brings up a lot of questions like: Will you get rent? Will you have to legally evict them? How do you negotiate a deal?
Holdover tenancy is a common occurrence in the rental business. Despite that, a lot of landlords don’t know how to handle holdover tenants. In this blog, the experts at Rent Easy will share tips on how to deal with these tenants.
Who Is a Holdover Tenant?
A holdover tenant is also known as a tenant at will. That's because there is no formal lease agreement between the landlord and the tenant. The tenant will continue to stay at the rental property after the lease has expired.
Holdover tenancy can be an awkward and difficult situation as there are legal implications to consider. In the US, laws and regulations regarding holdover tenants vary from state to state. Generally speaking, a landlord can evict a holdover tenant with or without notice. In fact, you may also be able to charge additional rent.
Reasons Tenants Stay Beyond the Lease
Before we tell you how you handle a holdover tenant, let's understand why it happens. There can be a lot of reasons your tenant chose to stay beyond the lease.
Unable to Pay
Tenants may choose to stay beyond their lease if they are facing financial difficulties.Occasionally, these difficulties may mean they are late on rental payments. No matter the reason, in order to keep tenants happy, try to work out a payment plan that works for both parties.
Forgotten Lease Agreement
Tenants may also inadvertently stay beyond their lease if they forget the terms of the agreement. It often happens if the lease agreement wasn't clear, or even due to a misunderstanding or confusion of the rules within the lease. In these cases, you can ask tenants for additional rent or evict them.
Can’t Find Another Home
Tenants who are unable to find another home may also want to stay on after their lease ends. If the tenant is willing to sign a month-to-month agreement, you can work out a new arrangement with them.
How Long Can a Renter Stay after the Lease Expires?
Typically, a tenant can stay after the lease expires for up to 30 days, provided the landlord agrees. After 30 days, the landlord can begin the process of evicting the tenant. However, it is important to note that laws vary by state, and landlords should always consult legal advice before proceeding.
In some cases, a landlord may choose to allow the tenant to stay on a month-to-month basis after the lease has expired. You can ask the tenant to pay a higher monthly rate.
How to Handle a Holdover Tenant
Here are our tips and tricks to make sure you are in the best position possible when it comes to dealing with a holdover tenant.
Understand the Situation
It is important to understand the situation of the holdover tenant. What is the tenant's reason for staying past the lease agreement? Are they trying to negotiate a new lease? Having an understanding of the situation will help you determine the best course of action.
Draft a Letter
Draft a letter to the tenant notifying them of their holdover status and the consequences of not leaving the property in a timely manner. Make sure the letter is written in a friendly tone and is compassionate of the tenant's situation.
If the tenant is unable to leave the property due to financial or other extenuating circumstances, you can offer to re-rent to the tenant. However, you should consider a renewal screening. It is important to be flexible and considerate of the tenant's need for more time.
You can suggest a lease renewal, or a month-to-month tenancy, but be sure to get all agreements in writing so that nothing is misunderstood.
Negotiate a Settlement
If you and the tenant cannot come to an agreement, you may need to negotiate a settlement. This may include offering a discounted rate for the time the tenant has stayed past the lease agreement or waiving any late fees.
Take Legal Action
As a last resort, if the tenant refuses to leave or pay the settlement, you may need to take legal action. Seek the advice of a lawyer and prepare to go to court if necessary.
Remember that although legal action may seem like the most effective solution, it will take time and money. It's best to exhaust all other possibilities before proceeding with court action. Additionally, it is wise to contact a property manager to help with the eviction.
It is important to approach the situation with a professional attitude while remaining firm in the enforcement of the lease terms. You can use negotiation skills and open communication to resolve the situation.
When handling a holdover tenant, take the time to draft a warning letter. Follow up with a meeting to discuss the situation and potential solutions. If the tenant does not respond to the warning letter, then you should start the eviction process.
Eviction should be a last resort, so it is important to try to come to an agreement before proceeding with the eviction.
A property management company can be a great asset in this situation. Rent Easy can help you resolve any tenant-dispute situation you are in. We have a secure and transparent resolution process. We also provide document management services to help you manage all the paperwork associated with the dispute.
Contact us to learn more about how we can help you solve your tenant issues.