Holdover Tenant
One of the most challenging aspects of being a landlord is dealing with a holdover tenant—or a tenant who refuses to leave the property once their lease agreement ends. Their presence can be disruptive, and it can create problems that might disrupt your long-term plan for the property.
As a landlord, it's essential that you understand how to handle such situations quickly, while still upholding legality, fairness, and respectability. If you’re looking for advice on the best way to do that, don’t worry; we’ve got you covered! In this article, we’ll explore various options, including legal measures, for dealing with a holdover tenant.
What Does “Holdover Tenant” Mean?
A holdover tenant is a renter who stays in a rental property without the landlord’s permission after their lease expires. In some cases, a holdover tenancy may be intentional. In others, it may occur due to a misunderstanding or miscommunication between the tenant and the landlord.
While a holdover tenant may legally remain in the rental property after the lease expires and the landlord takes action to remove them, they are considered a “tenant at sufferance.” This means the tenant is only staying in the property because the landlord tolerates their presence. The landlord may choose to end the tenancy and evict the holdover tenant at any time.
The Hidden Dangers of Holdover Tenancy
Holdover tenants can create several issues that could harm a landlord’s business. For that reason, it’s essential to understand what those issues are and learn how to deal with them. Here are some of the hidden dangers of holdover tenancy:
Legal Headaches
Holdover tenants can complicate the
eviction process. Even though the tenant has no right to stay in the unit, legally removing them can still take time and money.
Property Damage
A holdover tenant may cause damage to the rental unit, be it accidentally or intentionally. Rental property repairs can be costly and may cause the unit to remain vacant or uninhabitable.
Liability Risks
Holdover tenants may still be legally responsible for accidents or injuries, even if their lease agreement has expired.
Difficulties Showing the Unit
Holdover tenants make it difficult for the landlord to try and welcome new renters. This can result in a longer vacancy period, which would mean additional financial losses for the landlord.
Legal Complications
Laws regarding the eviction process and landlord-tenant disputes often differ for holdover tenants. Check Illinois state laws to ensure you comply with local jurisdiction.
How to Manage Holdover Tenants
When dealing with a holdover tenant, there are two options available to you as a landlord:
Allow the Tenant to Stay
If you decide to let the tenant stay, you’ll need to continue collecting rent payments from them monthly. However, if you allow them to remain in the unit, holdover rights may prevent you from evicting the tenant later.
Pursue an Eviction
If you want to remove the tenant from the rental unit, you can pursue an eviction process. This may involve serving the tenant with a notice of removal, typically requiring a 30-day notice period or whatever Illinois’ laws require. Reasons for eviction may include non-payment of rent or criminal activity such as drug use or domestic violence.
How to Avoid Holdover Tenants?
It's essential to take proactive steps before the lease term expires to avoid a holdover tenancy. Here are some tips:
Conduct Tenant Screening
As a landlord, you should always conduct an
effective tenant screening before welcoming anyone into your rental property. This could reduce the odds of renting to problematic tenants.
Communicate with Your Tenants
Maintain open communication with your tenants. Inform them well before the lease term expiration date what your intentions are regarding the lease
renewal or termination.
Renew the Lease
If you want the tenant to stay, offer them a lease renewal before it expires. This will give them time to consider the offer and make arrangements if necessary.
Offer a Month-To-Month Lease
If you need time before committing to a long-term lease, consider offering a month-to-month lease. It provides flexibility for you and the tenant, and allows you to easily terminate the lease with proper notice.
Include Holdover Clauses in the Lease
Be sure to include holdover clauses in the
rental agreement. They should detail the tenancy terms if the renter stays beyond the lease term.
Be Proactive about Enforcing the Lease Terms
If you notice a tenant is approaching the end of their lease term and has yet to communicate with you about their intentions, reach out to them and remind them of the lease expiration date.
Periodic Tenancy and Holdover: What You Need to Know
A periodic tenancy is a type of rental agreement with no fixed lease term or end date. It automatically renews at the end of each period, which could be weekly, monthly, or yearly.
This type of tenancy offers flexibility to both parties, allowing the tenant to pay rent payments for a short-term period without worrying about renewing the lease frequently and assuring the landlord of a long-term income stream.
Without proper notice, the tenancy will continue to roll over. The length of the notice period required for ending the tenancy will depend on the jurisdiction and the lease agreement terms.
Bottom Line
Holdover tenants are a common landlord-tenant issue. Landlords must stay on top of lease agreements and communicate with their tenants to avoid these situations. Landlords should also understand Illinois laws regarding eviction notices, tenant rights, and holdovers to protect themselves and take appropriate steps.
If you need help handling holdover tenants, contact
MTD Property Management. We have the experience and expertise to guide you through this situation. Get in touch today!
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