Hold-over Tenants: A Landlord’s Legal Remedies

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 What Is a Hold-over Tenant?

A hold-over tenant is a tenant whose lease has expired but who continues to occupy the leased premises. This situation is also known as tenancy at sufferance. This can occur at the end of a tenancy for a term of years or any other kind of periodic tenancy. 

Holdover tenants may end up owing their landlord money for any damage they cause. At the least, they owe holdover rent for the period of time for which they stay in the rental property. They could also owe damages for other harm caused. For example, a landlord may have  entered into a lease with another tenant for the property being held. The holdover tenant could owe damages to the landlord for any money they lose because they cannot deliver the property to the new tenant.

What Can a Landlord Do about a Hold-over Tenant?

A landlord has two options when it comes to dealing with a hold-over tenant:

  • Continue the Tenancy: Continue to accept rent from the holdover tenant;
  • Holdover Tenant Eviction: Treat the hold-over tenant as a trespasser, sue to evict and recover damages for any harm they suffer.

If the landlord does continue to accept rent payments, the hold-over tenant can continue to legally occupy the property. In this situation, the hold-over tenant is legally entitled to occupy the property as long as the landlord does not move to evict them. 

If the tenant pays rent on a monthly basis, then a month-to-month tenancy is created. Of course, the landlord can still evict the tenant by giving a 30-day notice to terminate the month-to-month lease and then proceeding with eviction. Or, the landlord may have other cause to evict the tenant, if the tenant is violating the terms of their lease.

If the landlord does not accept further rent payments, the tenant is considered to be trespassing.

If they do not promptly move out, an eviction is possible.

Creating a New Lease Term

A landlord may choose to hold a tenant to a new lease. Again, If the landlord accepts a rent check after the expiration of the lease, this may automatically renew the lease for a new term. If the rent is paid monthly, then the tenancy would be month-to-month tenancy, depending on local law. The decision to hold the tenant to a new term must be made within a reasonable time or the right is lost.

The right to treat the holdover as creating a new lease is waived by the landlord if:

  • The landlord tells the tenant that no new lease will be established;
  • The landlord accepts payment for the use of the property but it is not reasonable as compared to the rent paid previously; 
  • The landlord immediately chooses to treat the hold-over tenant as a trespasser and seeks eviction.  

Some states have statutes that prevent a landlord from holding a tenant to a new full lease term in the event of a holdover. In these states, a landlord who does not seek eviction of a hold-over tenant and continues to accept monthly rent checks is, in effect, agreeing only to an extension of the lease on a month-to-month basis. The fact remains, however, that any lease can ultimately be terminated, although, in some states, this can only be done for cause as defined in state or local law or according to the terms of the lease.

Of course, parties can voluntarily agree to a resolution of a holdover situation; that could include agreeing to a new lease of whatever duration the parties agree it should have.

Treat the Hold-over Tenant as a Trespasser

A landlord can always elect to treat the hold-over tenant as a trespasser. To do this, the landlord must consistently treat the tenant as a wrongful possessor of the property. Then, in order for a landlord to remove a hold-over tenant from the property, again, they would have to go through the legal eviction process. Of course, the tenant may always choose to leave the premises voluntarily.

Typically, landlords are required to go through the judicial process by bringing an action for unlawful detainer, i.e. eviction, as described below. In some jurisdictions, however, the tenant can avoid the eviction even up to the moment the sheriff arrives at the front door by paying all rent, court costs and fees owed according to the judgment.

How Long Does It Take to Evict a Holdover Tenant?

In order to evict a hold-over tenant, a landlord must first serve the tenant with a notice of termination of the lease.

Unlawful detainer actions are governed by state law, so state law prescribes when and how notice of termination of a lease must be given. The exact procedures vary from state to state, but generally, a notice of termination can be served in the following circumstances:

  • The tenant has not signed a lease, but pays rent monthly;
  • The landlord wants to evict the tenant even though the lease has not expired;
  • The rental at issue is rent-regulated housing;
  • The lease has expired, but the landowner has since accepted rent from the tenant;
  • The tenant has a Section 8 subsidy;
  • The terms of the lease agreement require it.

If the tenant does not vacate the property after the expiration of the notice period, the next step is to file a lawsuit in court for unlawful detainer. Filing a suit requires the landlord, or their attorney, to draft a complaint informing the court of the facts of the case. Each of the tenant defendants who reside in the rental must be served with the complaint

The length of time it takes to complete the unlawful detainer process depends on several factors. One factor is the efficiency of the local court system in which the landlord files their complaint. Another is how the tenant responds, whether they answer the complaint and force the case to go to trial, or whether they fail to answer and the landlord can obtain a default judgment.  

In most states, the tenant has 5 days to answer a complaint for unlawful detainer. If the tenant does not file an answer, the landlord can proceed to obtain a default judgment against the tenant. A default judgement is simply a judgment that a person can obtain if the person whom they sue does not respond to the complaint within the time allowed by law.

If the tenant files a response, the landlord will have to attend all court hearings and then proceed as indicated by the results in court. In order to win the case, a landlord must show that the rent was not paid. In many jurisdictions, a landlord must also show that they have a rental license for the property if that is required by local law. 

If the landlord wins, the court will enter a judgment against the tenant. However, in some locations, the tenant might win a non-payment of rent case if they have already paid the rent. Or, a tenant can avoid eviction by paying the rent the landlord claims is due. The tenant can even bring the rent with  them to court, along with any late fees and court costs that may be due, and offer to pay in full, and the landlord can be required by law to accept the payment. In some jurisdictions, the tenant can avoid the eviction even up to the moment the sheriff arrives at the front door by paying all rent, court costs and fees owed according to the judgment.

The tenant might also avoid eviction in some jurisdiction, if they prove that there are problems in the rental property that are a danger to the tenant’s  life, health or safety, that the landlord knew about the conditions for a reasonable period of time but did nothing about them. The tenant must then prove they followed local legal requirements for raising a rent escrow defense. 

With a default judgment or judgment in the landlord’s favor after a trial, the landlord can obtain a final order from a judge granting permission to take possession of the property. In some states or cities, the court may enter a judgment against the tenant but the tenant might still be able to stop the eviction by paying the judgement plus any court costs that are due before the actual eviction takes place.. 

Only if the tenant has more than one judgment against them for unpaid rent, e.g. three or four, can the landlord proceed with the eviction even after the tenant offers to pay the rent owed. A tenant may be able to pay the judgement up until the time the sheriff arrives at the rental to evict the tenant. The landlord does not have to stop the eviction, if the tenant makes only a partial payment of the amount owing in the judgment. 

Another easier alternative to eviction is for the landlord to offer tenants refusing to leave so-called “cash for keys.” Cash-for-keys is when a landlord just offers to pay the holdover tenant to move out. This might be the lowest cost option in the long run. 

A cautious landlord might want to consult an experienced landlord-tenant lawyer about how to structure a cash-for-keys deal, e.g. making sure not to hand over the cash until the tenant has vacated the rental premises. The payment might be placed in an escrow account to convince the tenant of the landlord’s good faith. Of course, the landlord wants to make it clear to the tenant that the property must be turned over in good condition and there will be an inspection before the money will be released to the tenant from the escrow account.

Should I Consult a Landlord-Tenant Lawyer?

An experienced landlord tenant attorney can help you decide whether to treat a hold-over tenant as a trespasser or hold them to a new lease. This is a decision that should be made only after the law on this issue in your state and locality has been consulted. 

If you should choose to evict the hold-over tenant, your attorney can help guide you through the process of filing an unlawful detainer action for eviction. If you choose to hold the tenant to a new lease, your attorney can help you enforce your decision and ensure the hold-over tenant fulfills the terms of the new lease.

Or, if you are a hold-over tenant and you want to know what your rights are, you should consult an experienced local landlord-tenant lawyer who can explain your options per the law in your state and locality.

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