How Long Can a Tenant Stay After the Lease Expires?
Tenancy that's not enforced by a formal lease agreement is known as tenancy-at-will. Sometimes it’s referred to as month-to-month tenancy. While this sort of tenancy prevents vacancy, it deprives the landlord of the legal protections and peace of mind that come with a formal lease agreement.
Here’s everything you need to know.
If a tenant stays beyond the terms of their lease, they’re known as a “holdover tenant.” How such tenants are treated varies from state to state, so make sure you know which laws you need to follow. If you want to avoid holdover tenants, check in on whether they wish to renew their lease around 60 days before their lease term expires. Checking in is also part of easy rental turnover management. By knowing in advance, you can reduce vacancy.
Evicting Holdover Tenants
You don’t want to resort to eviction to get rid of a holdover tenant. Some states are more landlord-friendly, which means evictions are easier, but that’s not the case everywhere. To reduce the likelihood of evictions, have a thorough screening process that includes an eviction history check.
Keep in mind, being evicted doesn’t mean someone is necessarily a bad tenant. Plenty of great tenants end up being evicted, just as there are reasons for early lease termination that have nothing to do with violating the lease terms (life emergencies, domestic abuse, military deployment, etc.).
Overall, you have two general options: evict them for trespassing, or let them stay month-to-month. If they’re a reliable tenant, then letting them stay month-to-month may be a good idea. You can try having them sign an extension or new lease. But if they’re unreliable or often late with the rent, it’s best to get them out of the rental unit. Do not collect or try to collect rent from them because you’ll no longer be able to evict them for trespassing.
Holdover tenants are treated like month-to-month tenants in most states. If you intend to evict them, you must serve them a notice in advance. A 30-day notice is standard in most places. The best way to avoid surprising liabilities is to outline what the policy is for holdover tenancy in your lease agreement.
Letting your tenant know in writing that their lease will expire in 30 days and that their choices are either to move out or renew the lease will help you avoid holdover tenants. Although, if they choose not to move, you’ll still be in the position of having to decide your response.
Gestures that show tenant appreciation and encourage lease renewals can help cultivate the sort of tenant-landlord relationship where the tenant will consider the landlord’s position enough to communicate their decision.
Period tenancy is a less commonly used term. It refers to leases with no fixed term or end date. The lease agreement remains binding until either the landlord or tenant gives notice that the tenancy is over. So long as the rent keeps coming, the lease remains in effect. Periodic leases are either weekly or monthly.
Your tenancy becomes period if you accept rental payments from a holdover tenant. Preventing vacancy is a significant positive, but you lack the stability and legal protection of a binding lease agreement. If you live in a state where you can raise the rent for a periodic tenancy with enough notice, then you could use the possibility of a rent increase as leverage to get them to resign their lease.
Otherwise, your tenant will have to either agree to pay the new rental price or vacate by the date on the notice.
Tenancy at Sufferance
Tenancy at sufferance occurs when the tenant occupies the rental unit and pays rent without a formal rental agreement without the landlord’s consent. Rent can be accepted while still wanting the tenant to leave. In some states, this makes the eviction process harder since the tenant is no longer thought to be committing trespassing.
Cash for Keys
One option for getting an unwanted holdover tenant to leave is cash for keys. That’s when you pay a tenant to vacate. The advantage of this method is that, if it works, it requires minimal effort.
Start the negotiation with a minimal amount, say 10% of the monthly rent or an additional portion of their security deposit. Whatever you do, don’t give them the money until you’ve got their keys and they’ve fully moved themselves and their belongings out. Use the threat of eviction as leverage if need be.
What You Cannot Do to Get a Tenant to Leave
- Change the locks
- Shut off utilities
- Harass a tenant
- Remove personal property
- Threaten to or use force
Holdover Tenant References
If you’re asked for a landlord reference for a tenant who was once a holdover tenant, remember that you are not obligated to provide one. However, doing so can be a positive contribution to the real estate investor community.
You can just confirm that you had the person in question as a tenant. If they were evicted, then the eviction would turn up on their eviction history check. No need to open yourself up to any legal liability by saying too much.
Speedy Rental Turnover
As soon as your holdover tenant is out, you should begin the property turnover process. Have your team in to clean, put up a great rental listing, and start doing showings. Consider self-showings to get a tenant in even faster.
Once you have a tenant who’s passed the screening process, let them know that they have 24 hours to sign the lease agreement, and that it’s first come, first served. Most property management companies keep approved applications on file for 30 days.
A tenant who doesn’t want to leave once a lease has ended isn’t necessarily bad, and you should try to avoid eviction if you don’t want them there. Going the route of cash for keys or a rent increase may be all the leverage you need to free up your rental unit. The security of a formal lease agreement is simply too much to compromise on.