Holdover tenant is a term that you should be familiar with whether you are a landlord, commercial real estate agent or a tenant, because well, information never harms.
And you never know when you’ll need it. Keep reading to know more!
The legal dictionary defines the term holdover tenant as a situation when a tenant continues to occupy the premises without the owner’s agreement after the original lease or rental agreement between the owner (landlord) and the tenant has expired.
We all know that every landlord has to and should prepare a tenancy agreement when letting it out. But then what happens when the agreement has expired and the tenant continues to live on.
The legal dictionary further explains that the tenant is responsible for payment of the monthly rental at the existing rate and terms which the landlord may accept without admitting the legality of the occupancy. A tenant in this situation is subject to a quit notice, if he/she does not leave, and subject to a lawsuit for unlawful detainment.
Now that you know how law defines it, it is time to move on to the larger picture and the nitty gritties of this aspect that has a lot of grey area.
I say grey area, because if a tenant continues to stay in a house or an apartment even after the expiry of the tenancy agreement, it is considered illegal occupancy. This accounts as a criminal case in a court of law because the tenant in such a case has violated the agreement and hence should be prosecuted. However, a tenant and a landlord should find a mid path.
Picture this situation: You are a tenant who has been living in an apartment for a year and you continue to stay even after the expiration of the lease. Your landlord says you can stay on and there is no need to renew the lease but you both agree on a monthly rent.
Is this legal? No, because if the law takes its course then the landlord in this situation may run into trouble. So in a nutshell, holdover tenants must pay for a new lease and insist on getting a new lease done if they wish to continue staying in the same premises. That’s the law.
In another situation, when getting the tenancy agreement done, you can ask the landlord to clearly indicate in the lease that at the end of the very first year of the expiration of the agreement, you would like to switch to a monthly tenancy.
It is against the law for a landlord to continue collecting the rents even after the expiry of the lease. A landlord should renew the lease if he/she wants you as a tenant to continue or the holdover tenancy clause should be mentioned in the initial agreement.
So what are your rights as a holdover tenant?
It may be difficult to evict a holdover tenant in a court of law if the tenant has been paying his dues. This is because in this situation it is the landlord who is at fault as he has violated the tenancy agreement that was duly signed by both the parties by converting the stay to a monthly one.
Even though you are a holdover tenant who is paying monthly rents there are some rights you are entitled to. The landlord can evict you only after serving you a quit notice of 30 days.
Note: This notice can vary from state to state and you should check with a legal practitioner on your state regulation. In New York, the quit notice should be served in the following cases:
- The lease has ended but the landowner has been collecting rents
- There is no written lease but you pay rent every month
- The landowner wants to evict the tenant before the expiry of the lease
- It is a rent-regulated housing
- Lease stipulates it
What should the eviction notice include?
- Reason for eviction
- The date on which tenant must move out
- A clause that the landlord will initiate legal action if the deadline is not complied with.
- Expiration of lease
- Unruly behavior as a tenant (being too noisy, having an unapproved pet, etc)
- Being a subtenant without the tenant’s knowledge
- Unreasonably refusing landlord access to the property
- Unapproved physical changes to the property
A key takeaway is that a holdover tenant is not entitled to receive a notice of eviction if the lease has expired and is not paying rent. In such a situation the landlord can very well begin a holdover proceeding without notice.
Be it a landlord or a tenant it is always advisable to go by the law when entering into an agreement. Negligence from either side could cost both damage.