What is a Holdover Tenant? Definition & Holdover Tenant Legal Rights

What Exactly Is A Holdover Tenant?

A holdover tenant refers to a renter who stays in a property even after the lease has expired. As long as the landlord keeps accepting rent payments, the holdover tenant has the legal right to remain in the property. The duration of the holdover tenant's new rental term is determined by state laws and court decisions. However, if the landlord refuses to accept any more rent payments, the tenant is considered to be trespassing. In such cases, if the tenant doesn't vacate the property promptly, an eviction may be required.

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KEY TAKEAWAYS

• A holdover tenant is a tenant that keeps paying rent even after their lease has ended. It’s important to note that their continued occupancy depends on the landlord's agreement to this arrangement.
• Holdover tenancy falls into a legal gray area, as the official lease agreement terms have ended and so it lies between a full rental contract and trespassing. It is advisable to establish a rolling month-to-month contract once the long-term lease agreement expires in order to protect all parties involved.
• You can include a month-to-month rental clause in most tenancy agreements so that once the lease ends the tenant is automatically moved onto month to month agreement. This helps address and resolve most issues.

Understanding Holdover Tenants

To prevent the occurrence of holdover tenants, landlords should always include a clause in the original lease that clarifies what happens at the end of the lease term. This step is crucial for protecting their property and interests. For instance, a year-long apartment rental lease could specify that upon lease expiration, it automatically converts to a month-to-month lease.

The implications of accepting rent from a holdover tenant vary depending on state and local laws. In some situations, accepting payment resets the lease term. For example, if the original lease was for a year, a new year-long lease begins when the landlord accepts rent after the initial lease has expired. In other cases, accepting payment from a holdover tenant triggers a month-to-month lease.

When it becomes necessary to remove a tenant from a property, the landlord must initiate a holdover proceeding, which is essentially an eviction case unrelated to missed rent payments. This process is typically handled in eviction or small claims courts.

If a landlord wishes for a holdover tenant to vacate the property, they must not accept rent from the tenant and treat them as a trespasser.

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Holdover Tenant Legal Rights

Holdover tenants are considered to have a tenancy at sufferance, where their occupancy lacks genuine approval from the landlord. Unlike a tenancy-at-will, which typically lacks a written contract or lease, a tenancy at sufferance refers to holdover tenants whose lease has expired, and they no longer have the landlord's permission to stay but have not yet been evicted.

When a landlord intends to evict a holdover tenant, they generally need to serve a notice of termination. However, the specific regulations surrounding this process vary from state to state. In New York State, for example, a notice of termination must be served under various circumstances, including:

• when the lease has ended but the landlord has accepted rent, 
• when there is no written lease but monthly rent is paid, 
• when the landlord wants to evict before the lease ends, 
• when the tenant resides in rent-regulated housing or has a Section 8 subsidy, 
• or when the lease specifically requires it.

The notice of termination must state the reason for termination, the deadline to vacate the property, and the landlord's intention to initiate legal action if the tenant fails to comply. Reasons for termination can include lease expiration, tenant misconduct (such as excessive noise or unapproved pets), unauthorized subletting, squatting, unreasonably denying access to the landlord, or making unapproved physical changes to the premises.

However, if a lease has expired and the tenant remains in the property without paying rent, the landlord may initiate a holdover proceeding without providing notice of termination.

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