What Are Holdover Tenants?
Holdover Tenants Defined
Holdover tenants are renters who do not renew their lease and do not move out when their lease expires but continue to pay their rent. If a landlord accepts rent payments after the expiration of a tenant’s lease, the tenant remains a legal occupant of the property—for how long depends on the laws of the state and any applicable court rulings.
However, if the landlord does not accept any rent payments after expiration of a tenant’s lease, the tenant is not a holdover tenant, but rather a trespasser in the eyes of the law.
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Potential Impact of Holdover Tenants
In some states, payment of rent after a tenant’s lease expires is tantamount to a lease renewal, and the lease term resets to what it was when the lease was originally signed. In other states, a landlord’s acceptance of rent payments after lease expiration converts the lease to a month-to-month lease. For both cases, the holdover tenant remains a legal occupant of the rental property, with all the rights attached to legal occupancy.
Rights of Holdover Tenants
The legal status of a holdover tenant who occupies a property with the consent of the landlord after expiration of a lease is called tenancy at will. In most states, acceptance of rent payments is tacit consent.
If the landlord has not accepted lease payments after the lease expired but has not done anything to protest the presence of a trespasser, the holdover tenant’s status may be that of a tenancy at sufferance. Tenancy at sufferance means that the tenant does not have genuine approval to remain in the rental property, but there has been no official objection in the form of an attempt to evict.
In many states, once the landlord has accepted even one rent payment from a holdover tenant, the only way to remove that tenant from the property is to initiate a holdover hearing. A holdover hearing is essentially an eviction hearing that does not claim that the tenant is behind in rent payments.
In most states, including South Carolina, if the landlord has not accepted any rent payments after the lease expiration date, the legal process for removing a holdover tenant is to treat the tenant as a trespasser and file for eviction.
The Eviction Process
Every state has its own legal requirements, and process for evicting holdover tenants as trespassers. This is what the process looks like in South Carolina:
- 1 The landlord serves the tenant with a 30-Day Notice to Quit.
- 2 The landlord files an ejectment action with the appropriate court, providing details as to why the holdover tenant should be evicted.
- 3 The court holds a hearing and issues a judgment.
- 4 If the judgment is in favor of the landlord, a writ of ejectment is issued, giving the holdover tenant 24 hours to vacate the property.
- 5 Possession of the property is returned to the landlord.
The entire process can take four to nine weeks, or even longer. And during that time, no rent is being collected and the unit can’t be rented to another tenant. Additionally, tenants who are evicted rather than vacating a rental unit voluntarily can become vindictive and take out their frustration by damaging the property before they do leave. And, of course, there are legal fees and court costs with any eviction process. When the court rules in favor of the landlord, the tenant typically is required to reimburse the landlord for any such expenses, but collecting the funds can take a good while.
How to Prevent Holdover Tenants
It’s far easier to prevent holdover tenants than it is to remove them after the fact. The best prevention is a lease that is very clear about what happens at the end of the lease period. Most often this means including a statement specifying the following end-of-lease options:
- – Renewing the lease for another year (or other term) at a higher rent, or
- – Converting the lease to a month-to-month rental agreement.
Landlords who engage in the services of a property management firm can get some practical advice on preventing and remediating holdover tenancy situations. For example, if a lease renewal has been offered but the tenant has not responded, what is the reason for not renewing? Is it something that can be negotiated? If for some reason the landlord has not offered renewal terms, is there some compromise that would allow the tenant to renew the lease? These are discussions that might result in a win-win situation.
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