What to Do About Holdover Tenants

As a landlord, dealing with tenants who refuse to leave is extremely frustrating. Your tenant’s lease has come to an end, and you may already have someone new eager to move into that unit, but when the day comes, the old tenant has yet to move out. To start the process of eviction may seem daunting, and there are a lot of legalities that should be considered before you take any kind of action. Here are the things to know about holdover tenants and how to get rid of them.

What are Holdover Tenants?

Holdover tenants are former tenants who remain in your property past their lease term. Try your hardest not to accept any rental payment from people who refuse to leave, because doing so may seriously complicate the legal process of eviction if it must come to that. However, if you do accept payment from that tenant, their occupancy falls into one of two categories:

1. Tenancy at will

In this type of tenancy, there is no formal lease agreement in place, but both the tenant and the landlord consent to the tenant residing in the property. It is subject to change, however- at any time, the tenant can choose to stop paying rent and move out, or the landlord can decide to stop accepting payment and ask the tenant to leave.

2. Tenancy at sufferance

Tenancy at sufferance is how it sounds- the landlord suffers. Essentially, the tenant in this situation is a holdover tenant, because they are not there with permission, as a tenant in a tenancy at will situation is. The tenant in tenancy at sufferance occupies and pays for a property without a lease in place, but the landlord does not consent to them living there. The landlord can accept their rental payments, but keep in mind that accepting any kind of payment may complicate the eviction process.

Make sure you are extremely clear about your agreement in this situation. Either continue an existing lease, create a new one, or refuse the money and evict the tenant.

How Do You Get Rid of a Holdover Tenant?

1. Eviction

Eviction is an expensive and time-consuming process. However, if you do not accept any additional payments from a holdover tenant, you don’t have to provide a notice in some states and can immediately file an eviction. However, if you did accept payment, you will need to provide a 3-day, 7-day and 30-day notice. Make sure you double-check with your state’s laws since these rules vary.

Either way, you must go through the typical eviction process. You will file the lawsuit with the court, attend a hearing, and abide by whatever ruling the judge decides. If you did not accept any payment, the case should be decided quickly and in your favor.

2. Cash for Keys

This method of getting rid of a tenant who has overstayed their welcome is often seen as distasteful to a landlord, but it is effective. Cash for keys is an agreement that the landlord will pay the tenant, sometimes in the form of their security deposit, upon their move out. If you choose to take this route, start small. Offer only 10% of their deposit, or 15%. And absolutely do not give them the money until their keys are in your hand.

What Not to Do

Changing the locks, turning off the power, or throwing out your holdover tenant’s belongings is all illegal behavior, known as a “self-help” eviction. Any sort of harassment to the tenant will only hurt your case in the long run, since the judge presiding over your eviction hearing will most likely require you to show the court any correspondence between you and the tenant. Remain consistently clear and professional to increase your chances of winning your case.

Final Thoughts

Dealing with a holdover tenant is not fun, so it’s best to explore ways of preventing this situation in hopes that you never have to face the consequences of having one.

Always be overly clear with your tenants. Provide notices of when their lease will expire, and be readily available to answer any questions they may have about the move- out process.

Foster a positive relationship with your tenant. If your relationship is solid and respected, they have a stronger chance of seeing the agreement between you as solid and respectable as well.

Finally, ensure that you are rigorously screening your tenants. Tenant screening reduces your chances of dealing with many issues beyond holdover tenants, so ensure that you continue to develop this practice for the betterment of your real estate business generally.