Hold over tenant

From CEOpedia | Management online

Hold over tenant is a tenant, who continues being in rented flat, after the tenancy agreement terminates. Hold over tenancy is also known under the term tenancy at sufferance. When the tenancy expires, the tenant is obligated to give up the premises without any proclamation from the landlord. In case, the tenant does not vacate, the property owner is allowed to dislodge the tenant. It is also possible, that the landlord decides no to dislodge the tenant. In that case, the right of the tenant holding over is determined by the lease provisions, common law principles and statutory provisions[1]. The tenancy at sufferance happens when[2]:

  • the renter persists in the property after the expiration of rental agreement,
  • the property owner declines to obtain further payments from the tenant.

Courts decisions

The courts commonly hold, that a holding over tenant is allowed to remain in the property for the period equal to the original lease, as long as the term of rent is one year long or less. In most cases, the courts decisions ruled that a holdover tenancy cannot persist longer than one year. In relation to that, if the rental agreement was contained for half year, and holdover tenancy occurred, the court may consider a holdover tenancy for an equal period of time, which is in this case - half a year. Nonetheless, if a rental agreement was contained for two years, the holdover tenancy would not be able to exceed one year[3].

Difference between hold over tenant and month-to-month tenant

As said before, the hold over tenant is a tenant who remains in possession of the property after expiration of the rental agreement without acquiescence of the landlord. Mostly it is a malevolent occupancy, as the renter refuses to leave to property after termination of the rental period. On the other side stands month-to-month tenancy, which happens, when a resident is in ownership of the property without any defined before termination date and the renter pays the rent on a monthly basis[4].

Examples of Hold over tenant

  • A tenant holds over when they remain in the property after their lease term expires and continues to pay rent. The landlord has the right to either evict the tenant or to allow them to stay. If he allows the tenant to stay, then the tenant will be subject to the same terms and conditions as previously agreed upon in the original lease.
  • Another example of a hold over tenant is when a tenant sublets a property from the original tenant. The original tenant is still responsible for the payment of the rent, even though they are not occupying the property. The subtenant is then responsible to the original tenant and not to the landlord. The landlord may take action to evict the subtenant if they fail to pay the rent.
  • A third example of a hold over tenant is when a tenant has a lease that ends on a certain date and fails to vacate the property by that time. In this case, the landlord may choose to either evict the tenant or to allow them to stay. If the landlord allows the tenant to stay, then the tenant will be responsible for paying the same rent and abiding by other terms and conditions as stated in the original lease.

Advantages of Hold over tenant

Hold over tenant has several advantages. Firstly, it can provide the tenant with security to remain in the property, as the landlord cannot terminate the tenancy without due cause. Secondly, it also provides the landlord with the benefit of having a tenant with a known history. Thirdly, the landlord may be able to increase the rent for the tenant who is holding over, since the rent does not have to be set at the same level as when the tenancy agreement was signed. Fourthly, the landlord may be able to avoid the costs of advertising and tenant selection process, since the tenant is already in possession. Lastly, the landlord may be able to maintain a good relationship with the tenant, as they can communicate and negotiate directly.

Limitations of Hold over tenant

  • The landlord is usually entitled to claim double rent from the tenant, who is holding over.
  • The holdover tenant can be evicted by the landlord, if he decides to do so.
  • The landlord is allowed to deny renewing the tenancy agreement, and has the right to terminate it.
  • The landlord has a right to receive the rent in a timely manner and can impose a late fee penalty when the tenant fails to do so.
  • The tenant is usually responsible for damages that he caused to the property and is obligated to return the premises in the same condition as it was at the beginning of the tenancy.
  • The tenant has no right to sublet the property or assign the tenancy agreement to another person.
  • The tenant can be held liable for the landlord’s costs of litigation, in case the landlord decides to take him to court.

Other approaches related to Hold over tenant

A Hold over tenant is subject to different approaches depending on the circumstances. These approaches include:

  • The tenant is liable for the payment of rent, on a month-to-month basis. The rent amount is normally the same as the one specified in the original lease.
  • The landlord may choose to accept the hold over tenant and enter into a new lease agreement. This is often done if the tenant has been a good tenant and the landlord is satisfied with their performance.
  • The landlord may choose to terminate the hold over tenancy by providing the tenant with a notice to quit. This requires the tenant to vacate the premises within a specified period of time.
  • The landlord may seek to take legal action against the tenant. This could include an eviction lawsuit or a breach of contract lawsuit.

In summary, a hold over tenant is a tenant who remains in possession of the property after the end of a tenancy agreement. Different approaches can be taken by the landlord, such as entering into a new lease agreement, giving a notice to quit, or taking legal action.

Footnotes

  1. ↑ Rose J. G. (1973), p. 21.
  2. ↑ Crane F. (2007), p. 304
  3. ↑ Nance C. P. (2003), p. 491
  4. ↑ Lank E., Deickler J., Lippman W. J. (2001), p. 111.


Hold over tenant — recommended articles
Tenancy at Will — Statute barred debt — Executory consideration — Absolute assignment — Discharge of contract — Vesting order — Executed consideration — Periodic tenancy — Tenancy At Sufferance

References

Author: Michał Sznurkowski

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