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.
{ 22 comments… read them below or add one }
Why give useless advise? Even if you get a notice in writting that the current resident will be moving out 30 or 60 days later, and then they don’t move out … nothing has changed; you are in the same predicament.
Hi Thomas,
The advantage of getting a notice from the existing tenant regarding their move-out will come up when the landlord has a new tenant expecting to move in. That way the landlord can prove it was reasonable to believe the rental would be vacant. It will also give you extra time for an eviction notice if it comes to that — the important thing is to see what the tenant has in mind before the end of the lease. Thanks for reading. Chris
If I am willing to permit a tenant to stay beyond the initial lease period (and I almost always permit that), I don’t renew the lease – they just go month-to-month. This gives both of us some flexibility and there is less paperwork.
I believe under the “Rental Tenancy Act” (in B.C.) once the lease has finished the rental agreement reverts to month to month. I do the same as Rich but I don’t think I am allowed to extend the one year lease agreement into a second year under the Act.
Hi Steve,
If you have a fixed term lease with a tenant and it is set to expire, it will revert to a month to month tenancy automaticaly,,,,,, if you do nothing. But you do have the option to renew another fixed term depending on how it was spelled out in the original agreement. You can check this out in the Residential Tenancy Act, part 2, section 13
I mean this as nicely as I can, but are all of you guys lazy? Why would just let leases expire and depend on some contrived government act to determine what your lease agreement is with your tenant?
Send out your lease renewals with a stamped envelope and require their response by a time that gives you time to find a replacement. If you don’t get a response then send out a notice that their lease will not be renewed and will terminate on the ending date. If they want to stay they will find you with a lease renewal form, if not then they have been given notice.
Make sure your tenants know what their lease is by writing one out and having them sign a copy. Not by say “so and so act permits your lease to become ______ after it has expired”, that is just lazy and begging for a tenant to say that they misunderstood you.
Another consideration, banks often prefer annual leases over month-to-month leases. If you foresee obtaining future credit lending, I’d strongly suggest staying on top of your annual lease agreements. It will be worth your effort.
I am an Ontario investor…
When I have that conversation with the tenant I always bring an N11 form with me so they can sign to ensure they will be moving out.
I always bring another lease with me as well. Of course good tenants will be upfront and let you know that they only want a 6 or 8 month lease for whatever reason and so I sign them up for that period of time and revisit 70 days before end of lease again with same documentation. Well of course we don’t do this, we just ensure our PM companies do.
I have given my tenants a 30 day notice to terminate tenancy and it was signed by one of the tenants (wife). Her husband wan’t home but both are on the lease. The lease expired June 1st , 2011 I didn’t have them sign a new lease, therefore they are on month to month.If the refuse to leave by the date given to them, what is my next step. Do go to the court house with the Notice they sign and file with the court? Then will there be a court date that we have to attend or can the Judge sign a eviction notice and have a Sheriff delivere this to them allowing them so many days to vacate?
Tenants were notified 9/5/2011 that their lease (6-month) would not be renewed. Owners need the dwelling for themselves. They (tenants) have not paid rent for October and refuse to leave. They were served with a 7-day notice to vacate. They just don’t think they should have to leave.
what do I need to do now and do to ensure the tenant leaves the property (House) when the lease comes to an end?
I have a question: if a tenant doesn’t want to renew the lease for the following year, how long time notice has to give me , so that I can start looking for a new tenant?
Thank you!
My friend’s lease expired July 1, 2012. Back in March, the homeowner expressed a desire for my friend to continue to live there after the lease expired. She was ten days late with July’s rent (this is now past the expiration of the lease) and the owner has indicated that if my friend is going to be late with the rent, then she will just evict her. I thought that there was some leeway for the tenant in rental payments, say 15 days. Also, I was under the impression that since a new lease has not been signed, then the lease reverts to a month to month. If that’s the case 1. How much time does the owner have to give for the tenant to vacate the premises? Also, can the homeowner threaten the tenant with eviction like that without going through court?
My tenant usually pay the rent on first or second day maybe the third day of the month.
I’m afraid the tenant not paying the rent once I give them 30 days notice of not renewing the lease.
What if I wait until got the rent then send the tenant a certified letter telling them leaee will not be renewed but give 5 extra days staying in the apt free to meet 30 days notice in advance.
I’d appreciated it if you could let me know the answer.
Hi Eugene,
As far as the 30-day notice goes, sorry, can’t give a definitive answer on that. It depends on where your property is. In some cases, if the 30-days rolls over the first of the month you have to provide more notice — so you’ll have to read the regulations in your area or consult with an attorney. Regarding your difficulty in collecting rent, one suggestion is to sign up to Report Tenant Pay Habits at http://www.tenantverification.com/report-pay-habits. This gives the tenant incentive to pay the rent by the 3rd day, or they will be reported to a credit reporting agency for late payments. This will affect their ability to secure another rental in the future. Alternatively, if they do pay rent on time, they receive a Certificate of Satisfactory Tenancy showing they are good renters. That way, you won’t need to feel you have to coax tenants into meeting their legal responsibilities under the lease.
I am the “new tenant” in the above WORST CASE SCENARIO. I am stuck in a hotel while another tenant won’t leave the apartment I was promised. Is anyone liable for the hotel/storage costs I’ve incurred during this period?
How can someone think that there is leeway in paying rent? We do not have leeway when paying the mortgage for the property. You aren’t living with your parents – it is a business in best cases – in other cases when people can’t sell their house and have to rent it – it is a necessity and we can’t afford for people to stop paying rent when they feel like it
Regarding Chris and Eugene,
Why, while having a tenant living in your building, would you report them to a credit agency showing that they do not pay their rent on time?? This will prevent them from securing another place to live and will force them to stay living in your property. If you want to keep record of all delinquencies and report them AFTER they move out (according to state law), that would be a smarter move in my opinion. There is no incentive to get tenants to pay on time, other than offering a discount for paying early or on time, or implementing a late fee on the 5th or after (according to state law.)
I don’t think anyone answered the question here. When the fixed term lease ends and the landlord doesn’t want the tenant to continue, does the landlord have the right to kick out the tenant. The tenant is arguing that it automatically goes to month-to-month but I believe that is if the landlord and tenant agree. If they don’t agree, can the landlord tell the tenant to vacate the premises when the term expires. Thank you.
In ILL-inois, and many other states, landlords are SCUM! The court treats them like EVIL RICH animals. I had a one year lease with a nice looking couple, who claimed to be earning 106k, yet as soon as they got in, the rent stopped coming, and the complaints began, as a reason to not pay. The court threw out the case twice, and meanwhile the couple ran away. SURE, I may get a judgement from the court, but that’s only IF they have an above the table job, rather than working for cash everywhere. Even then, it turnes out that putting a “brick on their check” for payments has SO MANY exclusions, you end up waiting YEARS and go back to court numerous times. But, I later found out that they had lied on the application, and had indeed done this to other landlords MANY times. Google up “judgement proof” for a laugh. I’m on the hook for the property taxes, gas, and electricity for SIX months!
what if my tenant don’t want to live after 90 days notice and a legal letter !! should i call the police? and i have prufe of late rent please help me thanks
Hi David,
Sounds like you will need to file for dispute resolution/eviction — probably best to call an attorney to help you out. Sorry to hear you are having problems with your tenant. Chris/TVS