Holdover: Commercial Lease

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What is a Holdover?

"Holdover" is a legal term that refers to the tenant continuing to occupy the premises after the lease has expired.  After the lease has expired, the tenant is technically a trespasser.  However, in some states the law protects the holdover residential tenant, permitting her or him to hold over into a month-to-month tenancy.  During a month-to-month tenancy, rent may be raised only in accordance with local rent controls if any, and a 30-day notice to quit can be submitted by any party. 

However, there are no such guarantees in commercial landlord / tenant law.  A commercial lease is all-powerful and the contract between the parties usually specifies whether holding over will be allowed, and at what increase in rent.  It is not unusual in commercial leases for the landlord to charge 1.5 or 2 times as much rent during the holdover period. In the absence of contractual agreement, some states may recognize a year-to-year tenancy, similar to the month-to-month tenancy a residential tenant may find themselves in.

In any case, a commercial tenant (a business) is liable for rent during the holdover period. 

What Happens If the Landlord Uses Self-Help Eviction Methods?

“Self-help” eviction refers to a landlord attempting to expel a tenant on his or her own rather than using the proper legal process. Such “self-help” evictions are illegal in most states and may actually hinder the eviction. A tenant facing a landlord using “self-help” eviction should ask the landlord to stop or hire an attorney. Examples of such “self-help” evictions include:

What Happens If The Commercial Tenant Moves Out But Retains Landlord Property, Such as Keys?

Even if commercial tenants merely keep a set of keys, landlords can argue that the tenants are holding over because they possess the premises in a way that interferes with the landlord's right to occupy and find new renters. 

However, businesses can argue that the landlord can change the locks to gain full control.  Courts have generally designated items left behind such as TV satellite dishes, the continuing maintenance of the building, and the retaining of keys as insufficient evidence of holding over. 

In most commercial cases, whether the tenant is holding over is clear.  The terms of the lease will then dictate the penalties to be assessed to the holdover commercial tenant. 

Do I Need an Attorney For My Commercial Holdover Lease Case?

Commercial leases are very complex and are often difficult to understand. An experienced real property lawyer can help landlords evict or tenants to renegotiate their contract.

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Last Modified: 05-10-2012 12:12 PM PDT

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