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Holdover Tenant

Updated on January 5, 2024
Article byShrestha Ghosal
Edited byAshish Kumar Srivastav
Reviewed byDheeraj Vaidya, CFA, FRM

What Is A Holdover Tenant?

A holdover tenant is a tenant who continues to stay in the rental property after the initial agreement has ended. They may not have the landlord’s permission to remain in the rental space, but they continue to do so, which makes them a trespasser on the property. The landlord can take legal action against such tenants.

Holdover Tenant

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Some tenants may continue to pay the rent as per the initial lease, while others refuse to. If the landlord accepts the payment, tenants who continue to pay the rent get significant protection in the eviction proceedings.

Key Takeaways

  • A holdover tenant is a tenant who continues living in the rental space after the rental lease gets terminated. They continue living on the property without receiving the property owner’s explicit permission to do so.
  • The tenants may continue paying the rent or stop paying it despite living in the rental unit.
  • The owner may stop accepting the rent, which would mark the tenants as trespassers.
  • The landlord can take legal action against such trespassers. They may sue the tenants for money or legally evict them from the rental property.

Holdover Tenant Explained

A holdover tenant is a tenant who refuses to vacate the rental space after the rental lease gets terminated. They may not receive explicit consent from the landlords to stay in the property, but they continue doing so without the property owner’s approval. Some tenants may continue paying the rent while others don’t. The tenants are considered trespassers to the rental unit if the property owner stops accepting the rent from such tenants. As a result, the owners can file a legal complaint against these tenants.

There are several measures that a property owner can take in such scenarios, which are as follows:

  • The owner may sue the tenants for money. The tenants may require to pay the owner additional money as a penalty for revoking the terms mentioned in the initial rental lease.
  • The owner can permit the tenants to stay in the property by renewing the lease.
  • The owner can evict the tenants by following the proper legal procedure for eviction.
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Rights

The holdover tenant rights are as follows:

  • These tenants have the right to clean, safe, and habitable living spaces. The property owner must maintain the rental unit’s safety and hygiene, irrespective of the holdover status.
  • The tenants have a right to continued utility services. It means the rental unit owner cannot withhold the tenant’s utility services to make him vacate the premises.
  • These tenants have the right to receive a formal notice before the owner enters the property. The landlords must issue a prior notice to the tenants before entering the rental property.
  • The tenants possess the right to receive a legal eviction notice from the property owner.
  • The holdover tenant rights make the tenant eligible to file a legal complaint against the rental unit owner if the landlord violates the tenant’s lawful rights.

Examples

Let us understand the holdover tenant concept with the following examples:

Example #1

Suppose Rose owns a property she rented to Mr. David and his family in March 2021. They signed an agreement that specified it would be valid for one year. In March 2022, Rose asked David to sign a new agreement to increase the rent amount by 10%. David refused to sign the agreement and continued staying in the property without paying rent. In May 2022, Rose sent David a legal eviction notice in which she mentioned that she would take legal action against David if he did not vacate the rental unit within thirty days. This is an example of a holdover tenant.

Example #2

On March 2, 2023, a New York State Appellate Court ruled that Albany’s “Good Cause Eviction” law unlawfully infringed upon the State law. After the Good Cause Eviction protection ended in Albany, about thirty percent of property owners went to court for tenants with holdovers which is a significant rise compared to the usual going to court at a twenty percent rate. In addition, rental owners had permission to increase the rent by only 5% under Good Cause Eviction protection. This is an example of a holdover tenant.

How To Evict?

The process of evicting a holdover tenant is as follows:

  • The property owner can initiate the eviction process by informing the tenant about the decision to evict. At this stage, the tenants may clear all the dues and vacate the premises.
  • The landlord must stop accepting payments if the tenant refuses to leave the rental unit. That will make the tenant a trespasser on the property, making the owner eligible to take suitable legal actions against them.
  • Then the property owner must send the tenants a legal notice for eviction. Usually, the eviction notice provides the tenant thirty days to find a new place and move out from the old premises.
  • The property owner can file a written complaint in the district court if the tenants do not move out after receiving the legal eviction notice.
  • Finally, the court will summon the owner and the tenants, marking the proceedings’ initiation. The court will ask the tenants to move out of the property within a specified date if the trial goes in the landlord’s favor. The property owner can contact the legal authorities if the tenants refuse to vacate the rental unit even after the court-specified date.

Advantages

The advantages for a holdover tenant are as follows:

  • The tenant will not pay an increased rent amount, as increasing the rent will require a new agreement.
  • The tenants will get considerable protection against eviction charges if the landlord keeps accepting the rent even after the lease has expired.
  • The landlord can only make changes to the lease with the tenant’s approval.
  • The landlord will not require to draft any paperwork if they do not renew the agreement.
  • The tenants must continue to pay the rent despite the lease expiry, which will benefit the landlord.
  • The landlord will only require to pay for the repair of the property if there is a functioning rent agreement.

Holdover Tenant vs Tenant At Sufferance

The differences are as follows:

  • Holdover Tenant: This tenant continues to live in a property after the expiration of the initial agreement and without signing a new one. This tenant can continue to legally stay in the property if the tenant keeps paying the rent and the landlord keeps accepting the payment.
  • Tenant At Sufferance: The property owner permits this tenant to continue living in the rental property even after the lease has expired. They must vacate the premises after the landlord demands them to leave the property. A tenant at sufferance must continue to meet the original lease conditions, which include the rent payment.

Frequently Asked Questions (FAQs)

1. How long does it take to evict a holdover tenant?

Evicting a holdover tenant can last anywhere between two weeks to a few months, depending on various circumstances. The eviction process depends on the following factors:
– When the property owner issued an official notice to the tenant.
– How long the tenant takes to respond to an official complaint?
– Whether the tenant responds to the complaint or not.
– The trial’s period.

2. What is a lawsuit that removes an unlawful holdover tenant?

A lawsuit removing a holdover tenant is an unlawful detainer action. According to this lawsuit, these tenants must return the rental unit to its owner after a three or thirty-day notice expires.

3. Is a holdover tenant a trespasser?

Yes, a tenant who does not vacate the space after their lease expiry is considered a trespasser. In addition, legal actions can be taken against a holdover tenant who remains in the property without paying rent.

4. Which type of lease involves a holdover tenant?

Usually, a commercial lease comes with a holdover tenant clause. According to the holdover tenant clause, if the tenant does not leave the rental unit after the specified termination date, they must pay a specific amount as additional rent. A holdover rent penalty generally exceeds two to three times the last rent.

This article has been a guide to what is Holdover Tenant. We explain their rights, comparison with tenant at suffernace, how to evict them, advantages, & examples. You may also find some useful articles here –

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