Tenant Didn’t Move Out at the End of the Lease: What Happens Now?

by | Feb 7, 2011 | Rental Property Management Tips

While many landlords fear that a tenant will leave before the lease expires, it is also common for the tenant to remain in the rental beyond the term of the lease.  This “hold-over” tenancy can present a number of disadvantages for a landlord:

Eviction and other disputes may be governed under special  hold-over tenancy rules rather than the tenancy agreement.

The landlord may lose control of when the tenant moves out and creates a vacancy, which could be at a time when it is difficult to get a new tenant in.

Scheduled maintenance, which is easier to perform in a vacant unit, may have to be postponed.

Restrictions may prevent the landlord from raising the rent during the period of the hold-over, or for a longer time in some cases.

WORST CASE SCENARIO:  The landlord has promised the rental property to someone else, but the existing tenant was not planning to move out.  The landlord could be liable to the new tenant for the costs of housing and storage while waiting for the rental to become available. 

The laws governing hold-over tenancies vary, but in most cases the tenancy becomes a month-to-month arrangement, and subject to those rules.  For instance, the landlord may have to offer 30-days notice to terminate or change the lease terms, and a tenant can give a 30-day notice and move out.  By accepting rent from the tenant after the lease has expired, the landlord may be consenting to a hold-over tenancy.

LANDLORD TIP:  The best course of action is to contact the existing tenant about 60 days before the end of the lease and find out their intentions. 

Having that statement in writing helps if the landlord ends up in a legal dispute with a new tenant over possession of the rental property. 

If the landlord does not like the existing tenant and wants to end the tenancy at the lease term, the landlord may have to take legal steps to re-gain possession, so it’s good to know well in advance what they may be facing.  

On the other hand, if the landlord likes the existing tenant, it may be beneficial to negotiate a new full-term lease or renewal so the landlord is not left to guess when the tenant may decide to give notice and move out.

Another option to consider is having your legal adviser review your standard lease agreeement and if necessary add in any available options for hold-overs.  For instance, are you allowed to increase the rent once the tenancy goes month-to-month?  Can you opt to have the lease renewed for a new term, for instance one year, rather than go month-to-month?

Staying in control is the key to keeping tenancies profitable for the landlord. 

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

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Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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